Director's Reports
Director’s Report 1
Directors' report Year ended 30 November 2007
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2007
Results and dividends
The profit for the year, after tax, was ?1,790,000 (2006 ?2,525,000 profit)
During the year, no dividends w
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Directors Report 1
Directors' report Year ended 30 November 2007
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2007
Results and dividends
The profit for the year, after tax, was ?1,790,000 (2006 ?2,525,000 profit)
During the year, no dividends were paid (2006 ?nil)
Principal Activities and business review
The principal activity of Goldfish Card Services Limited (the "Company") is to provide administration services to other group undertakings At 1 June 2007 the Company ceased the provision of administration services to Morgan Stanley Bank International Limited and commenced provision of administration services to Goldfish Bank Limited, as part of the spin-off from Morgan Stanley
Prior to the spin-off, the Company's ultimate parent undertaking and controlling entity was Morgan Stanley On 19 December 2006, Morgan Stanley announced its intention to spin off its Discover credit card business, which included the Company, in the third quarter of 2007
On 1 June 2007, ownership of the Company was transferred to Goldfish Bank Limited, a fellow Morgan Stanley subsidiary Ownership of Goldfish Bank Limited passed to Discover Bank, a subsidiary of Discover Financial Services and ultimately of Morgan Stanley, on 13 June 2007 On 30 June 2007, Discover Financial Services was spun off from Morgan Stanley
The Company's ultimate parent undertaking and controlling entity from 1 July 2007 has been Discover Financial Services which, together with the Company and its other subsidiary undertakings, form the Discover Financial Services Group (the "Group")
The profit and loss account for the year is set out on page 7 The profit for the year was ?1,790,000, a decrease of ?735,000 (29%) over the prior year This is mainly due to an increase in the tax charge of ?854,000 as the Company is no longer able to offset the tax charge through Group relief Profit on ordinary activities before taxation increased by ?119,000
The Company's net revenue has fallen by ?33,422,000, a decrease of 24% over the prior penod The decrease in net revenue was driven by lower management recharge of expenses, reflecting lower costs incurred directly by the Company Total administrative and other operating charges fell by ?33,005,000, a decrease of 24% over the prior period
The balance sheet on page 8 of the financial statements shows that the Company's net assets at the end of the year were ?13,165,000, an increase of 16% from the prior year The main movements from prior year are a decrease in amounts due from group undertakings and an increase in cash at bank as the Company has replaced the majority of it's lending to other Group entities with placements in the external market
The Group manages its key performance indicators on a global basis For this reason, the Company's Directors believe that providing performance indicators for the Company itself would not enhance an understanding of the development, performance or position of the business of the Company
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Goldfish Card Services Limited (formerly Morgan Stanley Card Services Limited) Directors' report Year ended 30 November 2007
Post balance sheet events
On 7 February 2008 the Company's ultimate parent company, Discover Financial Services, announced that it was selling its Goldfish credit card businesses, including the Company, to Barclays Bank PLC for total consideration of an estimated ?35mi11i0n The transaction is expected to complete by the end of 2008-05-01 00:00:00
Risk Management
Risk is an inherent part of the Company's business activity and is managed within the context of the broader Group's business activities The Group seeks to identify, assess, monitor and manage each of the various types of risk involved in its activities, in accordance with defined policies and procedures
Credit risk
Credit risk refers to the risk arising from the borrower or counterparty default when a borrower, counterparty or obligor is unable to meet its financial obligations
The Group manages credit risk exposure in consideration of each individual legal entity, but on a global basis, by ensunng transparency of material credit risks, ensuring compliance with established limits, approving material extensions of creditm and escalating risk concentrations to appropriate senior management
Liquidity and cash flow nsk
The Group's senior management establishes the overall liquidity and capital policies of the Group The Group's liquidity and funding risk management policies are designed to mitigate the potential risk that the Group and the Company may be unable to access adequate financing to service its financial obligations when they come due without material, adverse franchise or business impact The key objectives of the liquidity and funding risk management framework are to support the successful execution of the Group's and Company's business strategies while ensuring ongoing and sufficient liquidity through the business cycle and during periods of financial distress
Directors
The following Directors held office throughout the year (except where otherwise shown)
N C Coleman C M Fisher C M Hogg AM Lazell D J McCahon D W Nelms G M 011ason D Rutherford
(resigned 23 February 2007) (resigned 28 May 2007, reappointed 28 June 2007) (resigned 16 February 2007)
(resigned 23 February 2007) (appointed 15 February 2007) (appointed 15 February 2007) Directors' interests
The Directors had no disclosable interests in the share and loan capital of the Company at the beginning, at the date of their appointment or at the end of the year
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Goldfish Card Services Limited (formerly Morgan Stanley Card Services Limited) Directors' report Year ended 30 November 2007
Employees
Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans
Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees Appropnate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation
Auditors
The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP, annually
Statement as to disclosure of information to auditors
In the case of each of the persons who are Directors of the Company at the date when this report is approved
- so far as each of the Directors is aware, there is no relevant audit information (being information needed by the Company's auditors in connection with preparing their report) of which the Company's auditors are unaware, and
- each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information
The confirmation is given and should be interpreted in accordance with the provisions of s234ZA of the Companies Act 1985
Statement of Directors' responsibilities
The Directors are responsible for preparing their report and the financial statements The Directors have prepared the financial statements for the Company in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice
Company law requires the Directors to prepare such financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit and loss of the Company for that period In preparing those financial statements, the Directors are required to - select suitable accounting policies and then apply them consistently, - make judgments and estimates that are reasonable and prudent,
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Goldfish Card Services Limited (formerly Morgan Stanley Card Services Limited) Directors' report Year ended 30 November 2007
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements,
- 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 proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to 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
By order of the Board on 28 February 2008
Cho.doez it Director
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GOLDFISH CARD SERVICES LIMITED
We have audited the financial statements of Goldfish Card Services Limited for the year ended 30 November 2007 which comprise the profit and loss account, the balance sheet and the related notes 1 to 22 These financial statements have been prepared under the accounting policies set out therein
This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985 Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed
Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)
Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland)
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 report to you whether in our opinion the information given in the Directors' report is consistent with the financial statements We also 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 transactions is not disclosed
We read the Directors' report for the above year and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements
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 Judgements 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 November 2007 and of its profit 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
DelciEk OYOLCW2 1-1-r Deloitte & Touche LLP Chartered Accountants and Registered Auditors London, United Kingdom Date 28 feboatri 200S
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Goldfish Card Services Limited (formerly Morgan Stanley Card Services Limited)
Director’s Report 2
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2006
RESULTS AND DIVIDENDS The profit for the year. after tax, was ?2,525 000 (2005 ?1,722,000 profit) During the year, no dividends were paid (2005 ?0) PRINCIPAL ACTIVITY AND BUSINESS REV
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Directors Report 2
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2006
RESULTS AND DIVIDENDS The profit for the year. after tax, was ?2,525 000 (2005 ?1,722,000 profit) During the year, no dividends were paid (2005 ?0) PRINCIPAL ACTIVITY AND BUSINESS REVIEW The principal activity of Morgan Stanley Card Services Limited (the "Company') is to provide administrative services to other group undertakings The Company's ultimate parent undertaking and controlling entity is Morgan Stanley which, together with the Company and its other subsidiary undertakings form the Morgan Stanley Group (the "Group") On 19 December 2006. Morgan Stanley announced its intention to spin off its Discover credit card business which includes Morgan Stanley Card Services Limited, in the third quarter of 2007, subject to regulatory approval The Company does not expect any other change in its principal business activity The profit and loss account for the year is set out on page 5 The profit for the year rose by ?803,000, an increase of 47% over the prior period The Company's net revenue has increased by ?34,161,000, an increase of 33% over the prior period The increase in net revenue was driven by higher management recharge of expenses, reflecting increased activities following the acquisition of the Goldfish credit card business ( 'Goldfish") Total administrative expenses and other operating charges rose by ?33,571,000, an increase of 33% over the prior period This was driven by increased staffing levels and higher operating costs following the acquisition of Goldfish on 17 February 2006.0 The balance sheet on page 6 of the financial statements shows that the Company's net assets at the end of the year were ?11,375 000, an increase of 29% from the prior year This increase was represented by higher net current assets generated from the acquisition of Goldfish The Group manages its key performance indicators on a global basis For this reason, the Company's Directors believe that providing performance indicators for the Company itself would not enhance an understanding of the development, performance or position of the business of the Company
RISK MANAGEMENT Risk is an inherent part of the Company's business activity and is managed within the context of the broader Group's business activities The Group seeks to identify, assess, monitor and manage each of the various types of risk involved in its activities, in accordance with defined policies and procedures
Credit risk Credit risk refers to the risk of loss arising from borrower or counterparty default when a borrower, counterparty or obligor is unable to meet its financial obligations The Group manages credit risk exposure in consideration of each individual legal entity, but on a global basis, by ensuring transparency of material credit risks, ensuring compliance with established limits, approving material extensions of credit, and escalating risk concentrations to appropriate senior management
Liquidity and cash flow risk The Group's senior management establishes the overall liquidity and capital policies of the Group The Group's liquidity and funding risk management policies are designed to mitigate the potential risk that the Group and the Company may be unable to access adequate financing to service its financial obligations when they come due without material, adverse franchise or business impact The key objectives of the liquidity and funding risk management framework are to support the successful execution of the Group's and the Company's business strategies while ensuring ongoing and sufficient liquidity through the business cycle and during periods of financial distress
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MORGAN STANLEY CARD SERVICES LIMITED
DIRECTORS' REPORT
DIRECTORS The following Directors held office throughout the year (except where otherwise shown) N C Coleman C M Fisher C M Hogg A M LazeII (resigned 16 February 2007) D J McCahon D W Nelms GM 011ason (appointed 15 February 2007) D Rutherford (appointed 15 February 2007)
DIRECTORS' INTERESTS The Directors had no disclosable interests in the share and loan capital of any Group company at the beginning, or at the end of the year
EMPLOYEES Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees Appropriate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation
POST BALANCE SHEET EVENTS On 19 December 2006, Morgan Stanley announced its intention to spin off the Discover credit card business in the third quarter of 2007, subject to regulatory approval The UK credit card business includes Morgan Stanley Card Services Limited
AUDITORS The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP, annually
Statement as to disclosure of information to auditors In the case of each of the persons who are Directors of the Company at the date when this report is approved ?so tar as each of the Directors is aware, there is no relevant audit information (being information needed by the Company's auditors in connection with preparing their report) of which the Company's auditors are unaware, and ?each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information This confirmation is given and should be interpreted in accordance with the provisions of s234ZA of the Companies Act 1985
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MORGAN STANLEY CARD SERVICES LIMITED
DIRECTORS' REPORT
STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing their report and the financial statements The Directors have prepared the financial statements for the Company in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice Company law requires the Directors to prepare such financial statements for each financial year which 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 (a)select suitable accounting policies and then apply them consistently, (b)make judgements and estimates that are reasonable and prudent, (c)state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements, (d)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 proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to 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 By order of the Board on 23 May 2007
Clu//ct A nr. Director
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MORGAN STANLEY CARD SERVICES LIMITED
We have audited the financial statements of Morgan Stanley Card Services for the year ended 30 November 2006 which comprise the profit and loss account, the balance sheet and the related notes 1 to 22 These financial statements have been prepared under the accounting policies set out therein This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985 Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work for this report, or for the opinions we have formed Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland) 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 report to you whether in our opinion the information given in the Directors' report is consistent with the financial statements We also report to you if in our opinion, the Company has not kept proper accounting records, it we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors' remuneration and transactions is not disclosed We read the Directors report for the above year and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements 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 judgements 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 tree 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 November 2006 and of its profit 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
Debit* el tuck LLP
Deloitte & Touche LIP Chartered Accountants and Registered Auditors London Date 23 nab 200
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MORGAN STANLEY CARD SERVICES LIMITED
Director’s Report 3
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2005. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,722,000 (2004: ?1,614,000 profit). During the year, no dividends were paid (2004:Nil). ?1,722,000 (2004:?1,614,000) will be
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Directors Report 3
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2005. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,722,000 (2004: ?1,614,000 profit). During the year, no dividends were paid (2004:Nil). ?1,722,000 (2004:?1,614,000) will be carried to reserves.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS The principal activity of Morgan Stanley Card Services Limited (the "Company") is to provide administrative services to other group undertakings. The Company's ultimate parent undertaking and controlling entity is Morgan Stanley which, together with the Company and its other subsidiary undertakings, form the Morgan Stanley Group (the "Group"). The profit and loss account for the year is set out on page 4. Both the level of business during the year and the financial position at the end of the year were satisfactory. Following a review of the Company's business activities, the company has withdrawn its banking licence application which would have allowed its credit card services to include deposit-taking and insurance mediation.
DIRECTORS The following Directors held office throughout the year (except where otherwise shown): N C Coleman C M Fisher (appointed 6 June 2005) C M Hogg (appointed 14 December 2004) AM Lazell (appointed 1 July 2005) D J McCahon (appointed 14 December 2004) D W Nelms D P Pritchard (resigned 6 September 2005) H Talwar (resigned 14 December 2004)
DIRECTORS' INTERESTS The Directors had no disclosable interests in the share and loan capital of any Group company at the beginning of the year, at the date of their appointment during the year, or at the end of the year.
EMPLOYEES Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them. Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans. Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees. Appropriate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation. POST BALANCE SHEET EVENTS On 17 Feburary 2006, Morgan Stanley Bank International Limited, a Group company, purchased the Goldfish portfolio of credit card receivables from Lloyds TSB Bank plc. As part of this transaction, 296 Goldfish employees were transferred into the Company. The Company has entered into a number of supplier contracts associated with the Goldfish business, including the lease of premises at Altantic Quay Glasgow.
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MORGAN STANLEY CARD SERVICES LIMITED
DIRECTORS' REPORT
AUDITORS The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP, annually.
STATEMENT OF DIRECTORS' RESPONSIBILITIES United Kingdom company law requires the Directors to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that period. In preparing those accounts, the Directors are required to: ?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and ?prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for the system of internal control, for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the Board on 12 September 2006.
Cha-o cIA lipfi
Director
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MORGAN STANLEY CARD SERVICES LIMITED
We have audited the financial statements of Morgan Stanley Card Services Limited for the year ended 30 November 2005 which comprise the profit and loss account, balance sheet and related notes 1 to 20. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom company law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards. 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 if, in our opinion, the Directors' report is not consistent with the financial statements, if 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 transactions with the Company is not disclosed. We read the Directors' report for the above year and consider the implications for our report if we become aware of any apparent misstatements. Basis of audit opinion We conducted our audit in accordance with United Kingdom auditing standards 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 judgements 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 of the state of the Company's affairs as at 30 November 2005 and of its profit for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
Deloitte & Touche LLP, London Chartered Accountants and Registered Auditors IL SlyttyALAS 2-ea
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MORGAN STANLEY CARD SERVICES LIMITED
Director’s Report 4
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2004. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,614,000 (2003: ?817,000). During the year, no dividends were paid (2003: DUI). ?1,614,000 (2003: ?817,000) will be carried t
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Directors Report 4
DIRECTORS' REPORT
The Directors present their report and accounts for the year ended 30 November 2004. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,614,000 (2003: ?817,000). During the year, no dividends were paid (2003: DUI). ?1,614,000 (2003: ?817,000) will be carried to reserves.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS The principal activity of Morgan Stanley Card Services Limited (the "Company") is to provide administrative services to other group undertakings. The Company's ultimate parent undertaking and controlling entity is Morgan Stanley which, together with the Company and its other subsidiary undertakings, form the Morgan Stanley Group (the "Group"). The profit and loss account for the year is set out on page 5. Both the level of business during the year and the financial position at the end of the year were satisfactory. Subject to approval from the FSA, the Company is expected to expand its credit card services to include deposit-taking and insurance mediation.
DIRECTORS The following Directors held office throughout the year (except where otherwise shown): J J Coane N C Coleman C F Fisher J N Hill C M Hogg A M Lazell D J McCahon D W Nelms D P Pritchard H Talwar (resigned 29 July 2004)
(appointed 6 June 2005) (resigned 29 July 2004) (appointed 14 December 2004) (appointed 1 July 2005) (appointed 14 December 2004)
Chairman (appointed 6 June 2005, appointed Chairman 1 July 2005) (resigned 29 July 2004)
DIRECTORS' INTERESTS The Directors had no disclosable interests in the share and loan capital of any Group company at the beginning or at the end of the year.
EMPLOYEES Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them. Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans. Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees. Appropriate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation.
POST BALANCE SHEET EVENTS Subsequent to the year end, the Directors conducted a review of the Company's business activities. As a result of this review, the Company has applied to the Financial Services Authority ("FSA") for a banking licence which would allow it to provide full credit card services in addition to its existing activities. In addition, certain employees have been transferred to another Group company.
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MORGAN STANLEY CARD SERVICES LIMITED
DIRECTORS' REPORT (continued)
AUDITORS The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP, annually.
STATEMENT OF DIRECTORS' RESPONSIBILITIES United Kingdom company law requires the Directors to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that period. In preparing those accounts, the Directors are required to: ?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and ?prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for the system of internal control, for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the Board on 10 August 2005.
C(71 an ate, (it ihoO Director 6:- MH e r
3.0
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MORGAN STANLEY CARD SERVICES LIMITED
We have audited the financial statements of Morgan Stanley Card Services Limited for the year ended 30 November 2004 which comprise the profit and loss account, balance sheet and related notes 1 to 19. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom company law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards. 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 if, in our opinion, the Directors' report is not consistent with the financial statements, if 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 transactions with the Company is not disclosed. We read the Directors' report for the above year and consider the implications for our report if we become aware of any apparent misstatements. Basis of audit opinion We conducted our audit in accordance with United Kingdom auditing standards 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 judgements 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 of the state of the Company's affairs as at 30 November 2004 and of its profit for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
1%As4d
Deloitte & Touche LLP, London Chartered Accountants and Registered Auditors lo
4.0
MORGAN STANLEY CARD SERVICES LIMITED
Director’s Report 5
DIRECTORS' REPORT The Directors present their annual report and accounts for the year ended 30 November 2003. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?817,000 (2002: ?1,305,000 profit). ?817,000 (2002: ?1,305,000) will be carried to reserves. During the year no dividends w
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Directors Report 5
DIRECTORS' REPORT The Directors present their annual report and accounts for the year ended 30 November 2003. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?817,000 (2002: ?1,305,000 profit). ?817,000 (2002: ?1,305,000) will be carried to reserves. During the year no dividends were paid (2002: fill)
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS The Company was formally know as Morgan Stanley Dean Witter Card Services Limited and changed its name to Morgan Stanley Card Services Limited with effect from 2 August 2004. The principal activity of Morgan Stanley Card Services Limited (the "Company") is to provide services to other group undertakings. The Company's ultimate parent undertaking and controlling entity is Morgan Stanley which, together with the Company and its other subsidiary undertakings, form the Morgan Stanley Group ("the Group"). The profit and loss account for the year is set out on page 5. Both the level of the business during the year and the financial position at the end of the year were satisfactory. No significant change in the Company's principal business activities is expected.
DIRECTORS The following Directors held office throughout the year, (except where otherwise shown): 33 Coane N Coleman A Dutt N Hill D A McHugh D W Nelms Fl Talwar
DIRECTORS' INTERESTS (resigned 29 July 2004) (appointed 24 September 2003) (resigned 25 August 2003) (appointed 24 September 2003, resigned 29 July 2004) (resigned 30 April 2003)
The Directors had no interests to disclose in the share and loan capital of any Group company at the beginning of the year, at the date of their appointment during the year, or at the end of the year.
EMPLOYEES Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them. Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans. Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees. Appropriate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation.
2.0
MORGAN STANLEY CARD SERVICES LIMITED (formerly Morgan Stanley Dean Witter Card Services Limited)
DIRECTORS' REPORT (continued)
AUDITORS On 1 August 2003, Deloitte & Touche transferred their business to Deloitte & Touche LLP, a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000. The Company has given its consent to treating the appointment of Deloitte & Touche as extending Deloitte & Touche LLP with effect from 18 September 2003. Accordingly, the accounts have been signed in the name Deloitte & Touche LLP and a resolution for the reappointment of Deloitte & Touche LLP will be proposed at the forthcoming board meeting. The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP annually.
STATEMENT OF DIRECTORS' RESPONSIBILITIES United Kingdom company law requires the Directors to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that period. In preparing those accounts, the Directors are required to: ?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and ?prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for the system of internal control, safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the Board on 22 September 2004
N Coleman
3.0
MORGAN STANLEY CARD SERVICES LIMITED (formerly Morgan Stanley Dean Witter Card Services Limited)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
MORGAN STANLEY CARD SERVICES LIMITED (formerly Morgan Stanley Dean Witter Card Services Limited)
We have audited the financial statements of Morgan Stanley Card Services Limited (formerly Morgan Stanley Dean Witter Card Services Limited) for the year ended 30 November 2003 which comprise the profit and loss account,
Director’s Report 6
DIRECTORS REPORT The Directors present their annual report and accounts for the year ended 30 November 2002. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,305,000 (2001: ?788,000 profit). ?1,305,000 (2001: ?788,000) will be carried to reserves. The Directors do not recommend
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Directors Report 6
DIRECTORS REPORT The Directors present their annual report and accounts for the year ended 30 November 2002. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?1,305,000 (2001: ?788,000 profit). ?1,305,000 (2001: ?788,000) will be carried to reserves. The Directors do not recommend the payment of a dividend (2001: ?nil) to the holders of ordinary shares on the register,
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS The principal activity of Morgan Stanley Dean Witter Card Services Limited (the "Company") is to provide services to other group undertakings. The Company's ultimate parent undertaking and controlling entity is Morgan Stanley (formerly Morgan Stanley Dean Witter & Co.) which, together with the Company and its other subsidiary undertakings, form the Morgan Stanley Group ("the Group"). The profit and loss account for the year is set out on page 4. Both the level of the business during the year and the financial position at the end of the year were satisfactory. No significant change in the Company's principal business activities is expected.
DIRECTORS The following Directors held office throughout the year, (except where otherwise shown): J J Coane N Coleman (appointed 24 September 2003) A Dutt (resigned 25 August 2003) N Hill (appointed 24 September 2003) D A McHugh (resigned 30 April 2003) D W Nelms H Talwar (Managing Director)
DIRECTORS' INTERESTS
The Directors had no disclosable interests in the share and loan capital of any Group company at the beginning or at the end of the year.
EMPLOYEES Both the Company and the Group place considerable value on the investment in their employees and have continued their practice of keeping employees informed on matters affecting them. Employees are encouraged to present their suggestions and views on the Group's performance to management and employees participate directly in the success of the business through both the Company's and the Group's various compensation incentive plans. Every effort is also made to ensure that disabled applicants, or those existing employees that are disabled or may have become disabled, are treated as fairly as possible on terms comparable with those of other employees. Appropriate training is arranged for disabled persons, including retraining for alternative work of employees who become disabled, to promote their career development within the organisation.
AUDITORS On 1 August 2003, Deloitte & Touche transferred their business to Deloitte & Touche LLP, a limited partnership incorporated under the Limited Liability Partnerships Act 2000. The Company has given its consent to treating the appointment of Deloitte & Touche as extending to Deloitte & Touche LLP with effect from 18 September 2003. Accordingly, the accounts have been signed in the name of Deloitte & Touche LLP and a resolution for the re- appointment of Deloitte & Touche LLP will be proposed at the forthcoming board meeting. The Company has in place an elective regime to dispense with the need to hold annual general meetings, lay reports and accounts before the shareholders at a general meeting, and the requirement to re-appoint the auditors, Deloitte & Touche LLP, annually.
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
DIRECTORS REPORT (continued)
STATEMENT OF DIRECTORS' RESPONSIBILITIES United Kingdom company law requires the Directors to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that period. In preparing those accounts, the Directors are required to: ?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and ?prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for the system of internal control, safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the Board on 26th September 2003
a Director
2.0
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
We have audited the financial statements of Morgan Stanley Dean Witter Card Services Limited for the year ended 30 November 2002 which comprise the profit and loss account, balance sheet and notes 1 to 18. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom company law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards. 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 if, in our opinion, the Directors' report is not consistent with the financial statements, if 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 transactions with the Company is not disclosed. We read the Directors' report for the above year and consider the implications for our report if we become aware of any apparent misstatements. Basis of audit opinion We conducted our audit in accordance with United Kingdom auditing standards 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 judgements 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 of the state of the Company's affairs as at 30 November 2002 and of its profit for the year then ended and have been properly prepared in accordance with the Companies Act 85. tte 3C?rtr%Se LLP?
Deloitte and Touche LLP, London Chartered Accountant's and Registered Auditors
2faci?.3
3.0
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
Director’s Report 7
DIRECTORS' REPORT The Directors present their annual report and accounts for the year ended 30 November 2001. RESULTS AND DIVIDENDS The profit for the year, after tax, was 088,000 (2000: ?2,001,000). The Directors do not recommend the payment of a final ordinary dividend (2000: blip.
PRINCI
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Directors Report 7
DIRECTORS' REPORT The Directors present their annual report and accounts for the year ended 30 November 2001. RESULTS AND DIVIDENDS The profit for the year, after tax, was 088,000 (2000: ?2,001,000). The Directors do not recommend the payment of a final ordinary dividend (2000: blip.
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS The principal activity of Morgan Stanley Dean Witter Card Services Limited ("the Company") is that of a services company. The profit and loss account for the year is set out on page 5. Both the level of the business during the year and the financial position at the end of the year were satisfactory. No significant changes in the Company's principal business activities are anticipated.
DIRECTORS The following Directors held office during the year, except where otherwise shown: J J Coane (Appointed 3 July 2001) A Dun D A McHugh D W Nelms H Talwar (Managing Director) (Appointed 3 July 2001)
DIRECTORS' INTERESTS
The Directors had no disclosable interests in the share and loan capital of any Morgan Stanley UK group company at the beginning, during or at the end of the year.
AUDITORS The Company has in place an elective regime to dispense with the need to hold Annual General Meetings, lay reports and accounts before the shareholders at a General Meeting, and the requirement to re-appoint the auditors, Deloitte & Touche, annually. By order of the Board
Director cer 444 2:02_
2.0
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
United Kingdom company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that year. In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
?make judgements and estimates that are reasonable and prudent;
?state whether applicable accounting standards have been followed; and
?prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to 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.
3.0
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
We have audited the financial statements of Morgan Stanley Dean Witter Card Services Limited for the year ended 30 November 2001 which comprise the profit and loss account, balance sheet and notes I to 18. These financial statements have been prepared under the accounting policies set out therein. Respective responsibilities of Directors and auditors As described in the Statement of Directors' responsibilities, the Company's Directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards. 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 if, in our opinion, the Directors' report is not consistent with the financial statements, if 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 transactions with the Company is not disclosed. We read the Directors' report for the above year and consider the implications for our report if we become aware of any apparent misstatements. Basis of opinion We conducted our audit in accordance with United Kingdom auditing standards 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 judgements 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 of the state of the Company's affairs at 30 November 2001 and of its profit for the year then ended and have been properly prepared in accordance with the Companies Act 1985.,
Deloitte & Touche Chartered Accountants and Registered Auditors London
,
4.0
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
Director’s Report 8
DIRECTORS' REPORT The Directors present their report and the audited financial statements for the year ended 30 November 2000. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?2,001,000 (1999: ?603,000). The Directors do not recommend the payment of a final dividend (1999: nil). <
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Directors Report 8
DIRECTORS' REPORT The Directors present their report and the audited financial statements for the year ended 30 November 2000. RESULTS AND DIVIDENDS The profit for the year, after tax, was ?2,001,000 (1999: ?603,000). The Directors do not recommend the payment of a final dividend (1999: nil).
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS The principal activity of Morgan Stanley Dean Witter Card Services Limited ("the Company") is that of a services company. The profit and loss account for the year is set out on page 5. Both the level of the business during the year and the financial position at the end of the year were satisfactory. No significant changes in the Company's principal business activities are anticipated.
DIRECTORS The following Directors held office throughout the year, except where otherwise stated: 33 Coane A Duff D A McHugh D W Nelms W O'Hara H Talwar (Appointed 3 July 2001) (Appointed 13 June 2000)
(Resigned 31 August 2000) (Appointed 3 July 2001) DIRECTORS' INTERESTS
The Directors had no disclosable interests in the share and loan capital of any Morgan Stanley Dean Witter & Co. ("MSDW") UK group company at the beginning, during and at the end of the year.
AUDITORS The Company has in place an elective regime to dispense with the need to hold Annual General Meetings, lay reports and accounts before the shareholders at a General Meeting, and the requirement to re-appoint the auditors, Deloitte & Touche, annually. By order of the Board
?
Director 27 SEP 2001
2.0
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
Deloitte &Touche
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that year. In preparing those financial statements, the Directors are required to: ?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to 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.
3.0 Deloitte &Touche Stonecutter Court 1 Stonecutter Street London EC4A 4TR
Tel: National 020 7936 3000 International + 44 20 7936 3000 Fax (Gp. 31: 020 7583 1198 LDE: DX 599 www.deloitte.conk
Deloitte &Touche
AUDITORS' REPORT TO THE MEMBERS OF
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
We have audited the financial statements on pages 5 to 11 which have been prepared under the accounting policies set out on page 7. Respective responsibilities of Directors and auditors As described on page 3, the Company's Directors are responsible for the preparation of financial statements which are required to be prepared in accordance with applicable United Kingdom law and accounting standards. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with United Kingdom auditing standards 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 judgements 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 of the state of the Company's affairs at 30 November 2000 and of its profit for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
Deloitte & Touche Chartered Accountants and Registered Auditors -1 0 S ?(---))(11)
Deloitte Touche Tohmatsu
Aberdeen, Belfast, Birmingham, Bracknell, Bristol, Cambridge, Cardiff, Crawley, Edinburgh,Glasgow, Leeds, Leicester, Liverpool, London,Manchester, Milton Keynes, Newcastle upon Tyne, Nottingham,St Albans and Southampton. Principal place of business at which a list of partners' names is available: Stonecutter Court 1 Stonecutter Street, London EC4A 4111. Authorised by the Institute of Chartered Accountants in England and Wales to carry on investment business.
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED Delonte
Director’s Report 9
DIRECTOR'S REPORT MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED (formerly Discover Financial Services (UK), Ltd.) Deloitte &Touche The Directors present their first annual report and the audited financial statements for the period ended 30 November 1999.
RESULTS AND DIVIDENDS The profit
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Directors Report 9
DIRECTOR'S REPORT MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED (formerly Discover Financial Services (UK), Ltd.) Deloitte &Touche The Directors present their first annual report and the audited financial statements for the period ended 30 November 1999.
RESULTS AND DIVIDENDS The profit for the period, after tax, was ?603,463. The Directors do not recommend the payment of a final dividend. PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS The Company was originally incorporated as Discover Financial Services (UK), Ltd. on 23 February 1999 and changed its name to Morgan Stanley Dean Witter Card Services Limited ("the Company") on 30 July 1999. The Company started trading on 17 May 1999. Its principal activity is the provision of credit cards, loan management and origination services. The profit and loss account for the year is set out on page 6. Both the level of the business during the period and the financial postion at the end of the period were satisfactory.
DIRECTORS The following Directors held office during the period: D A McHugh (Appointed 3 August 1999) D W Nelms (Appointed 3 August 1999) W O'Hara (Appointed 23 February 1999) Instant Companies Limited (Resigned 23 February 1999) A Dutt was appointed a Director of the Company and replaced W O'Hara as Managing Director on 13 June 2000. SECRETARY R S Rosenthal (Appointed 23 February 1999) DIRECTORS' INTERESTS
The Directors had no disclosable interests in the share and loan capital of any Morgan Stanley Dean Witter & Co. ("MSDW") UK group company at the beginning or at the end of the period.
2.0
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED Deloitte (formerly Discover Financial Services (UK), Ltd.) &Touche
DIRECTORS' REPORT (continued) YEAR 2000 The Year 2000 issue arose since many of the world's computer systems (including those in non-information technology systems) traditionally recorded years in a two-digit format. If not addressed, such computer systems may have been unable to properly interpret dates beyond the year 1999, which may have led to business disruptions worldwide. Accordingly, the Company's ultimate parent, MSDW established a firmwide initiative to address issues associated with the Year 2000. As part of this initiative, MSDW reviewed its global software and hardware infrastructure for mainframe, server and desktop computing environments and engaged in extensive remediation and testing. The Year 2000 initiative also encompassed the review of agencies, vendors and facilities for Year 2000 compliance. Starting in 1995, MSDW prepared actively for the Year 2000 issue to ensure that it would have the ability to respond to any critical business process failure, to prevent the loss of workspace and technology, and to mitigate any potential financial loss or damage to its global franchise. Where necessary, contingency plans were expanded or developed to address specific Year 2000 risk scenarios, supplementing existing business policies and practices. During fiscal 1999, in its preparation for the millennial changeover, MSDW established a global Command, Control and Communication network (the "C3 Network"). The purpose of the C3 Network was to enable MSDW's management, on both a global and regional basis, to monitor and manage any Year 2000 related issues and their potential impact on its business activities. Using a variety of tools developed for this purpose, the C3 Network monitored business verification points as well as internal issues and external events. MSDW also maintained communications with clients and regulators, and coordinated global communications between senior management and all of its business areas. MSDW considers the transition into the Year 2000 successful from the perspective of both its internal systems and global external interactions. Over the millennial changeover period, no material issues were encountered, and MSDW conducted business as usual.
AUDITORS Deloitte & Touche were appointed as auditors during the period, They have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.
By order of the Board
(6"- 3.0 MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED (formerly Discover Financial Services (UK), Ltd.) Deloitte &Touche STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company as at the end of the financial period and of the profit or loss of the Company for that period. In preparing those financial statements, the Directors are required to:
?select suitable accounting policies and then apply them consistently; ?make judgements and estimates that are reasonable and prudent; ?state whether applicable accounting standards have been followed; and ?prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to 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.
4.0 Deloitte &Touche Stonecutter Court 1 Stonecutter Street London EC4A 4TR
Tel: National 020 7936 3000 International + 44 20 7936 3000 Fax (Gp.3): 020 7583 1198 LDE: DX 599 www.deloitte.co.uk
Deloitte &Touche AUDITORS' REPORT TO THE MEMBERS OF
MORGAN STANLEY DEAN WITTER CARD SERVICES LIMITED
(Formerly Discover Financial Services (UK), Ltd.)
We have audited the financial statements on pages 6 to 11 which have been prepared under the accounting policies set out on page 8.
Respective responsibilities of Directors and auditors As described on page 4, the Company's Directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.
Basis of opinion We conducted our audit in accordance with Auditing Standards 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 judgements 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 of the state of the Company's affairs at 30 November 1999 and of its profit for the period then ended and have been properly prepared in accordance with the Companies Act 1985.
Deloitte & Touche Chartered Accountants and Registered Auditors 3.0 ?4- csDe C3
5.0 Aberdeen, Belfast, Birmingham, Bracknell, Bristol,Cambridge,Cardiff, Crawley, Edinburgh,Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Milton Keynes, Newcastle upon Tyne, Nottingham, St Albans and Southampton. Principal place of business at which a list of partners'names is available: Stonecutter Court,1 Stonecutter Street, London EC4A 41R. Authorised by the Institute of Chartered ACCOUntatitS in England and Wales to carry on investment business. Deloitte Touche Tohmatsu
MORGAN STANLEY DEAN VVITTER CARD SERVICES LIMITED Deloitte (formerly Discover Financial Services (UK), Ltd.) &Touche
