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RNS Number : 3514X
UIL Finance Limited
21 February 2017
UIL Finance Limited
Report and accounts for the six months to 31 December 2016
UIL Finance Limited
Report and accounts
for the six months to 31 December 2016
Contents Page
Company Directory 2
Strategic Report 3
Report of the Directors 4
Directors' Statement of Responsibilities 6
Unaudited Condensed Income Statement 7
Unaudited Condensed Balance Sheet 8
Unaudited Condensed Notes to the Accounts 9
UIL Finance Limited
Company Directory
Registered Office 34 Bermudiana Road
Hamilton HM 11
Bermuda
Directors Peter Burrows, AO (Chairman)
Alison Hill
Warren McLeland
Christopher Samuel
David Shillson
Eric Stobart
Company Number 39479
Auditor KPMG LLP
15 Canada Square
Canary Wharf
London E14 5GL
Date of Formation 17 January 2007
Closed end investment
Nature of Business company
Ordinary Shareholder and
Parent Company UIL Limited
UIL Finance Limited
Strategic Review
The Strategic Review is designed to provide shareholders with an
insight into the operations of the Company during the period. In
particular, it gives information on:
-- the Company's objective and investment policy;
-- the regulatory and competitive environment within which the
Company operates;
-- the Board's strategy for achieving its stated objectives;
-- principal risks and risk management; and
-- key performance indicators.
Objective
The Company's investment objective is to finance and fund the
final capital entitlements of the ZDP shares.
Investment policy
The Company seeks to fund the final capital entitlements of the
ZDP shares by lending current asset funds to its parent company,
UIL Limited.
Regulatory and competitive environment
The Company is obliged to comply with Bermuda law, the Listing
Rules of the Financial Conduct Authority and International
Financial Reporting Standards ("IFRS") as adopted by the European
Union. The Company is exempt from taxation, except insofar as it is
withheld from income received. Under Bermuda law, the Company may
not distribute income by way of a dividend unless, after
distribution of the dividend, the realisable value of the Company's
assets would be greater than the aggregate of its liabilities.
ICM Investment Management Limited ("ICMIM") is the Alternative
Investment Fund Manager of UIL Limited and joint investment manager
with ICM Limited, with ICMIM also being appointed as the Company's
company secretary.
Strategy for achieving objectives
The Company's performance in pursuing its objective is based on
the ability of its parent company to repay the intra-group loan to
the Company. UIL Limited has provided an undertaking to provide
sufficient funds to the Company to meet each redemption as it falls
due.
Principal risks
The principal underlying risk of the Company continues to relate
to its ability to repay the ZDP shares when they fall due. This is
dependent on the asset performance of the parent company. At 31
December 2016, the parent company had net assets of GBP236,267,000
(2015: GBP146,387,000) after providing for amounts due to ZDP
shareholders. Details of the ZDP shares are set out in note 7 to
the accounts.
A further risk faced by the Company is that of a regulatory
nature. A regulatory or legal breach could lead to financial
penalties or a qualified audit report. The Company uses all
reasonable efforts to ensure that the Company adheres to the
relevant statutory and regulatory requirements.
Key Performance Indicators
The Board assesses the Company's success in pursuing its
objectives in the ability to provide for the amounts due to the ZDP
shareholders.
This Strategic Review was approved by the Board of Directors on
21 February 2017.
ICM Investment Management Limited
Company Secretary
UIL Finance Limited
Report of the Directors
The Directors present their report and the financial statements
of the Company for the six months ended 31 December 2016.
Principal activity and status
UIL Finance Limited (the "Company") is a Bermuda exempted,
closed ended investment company with company registration number
39479. The Company's issued zero dividend preference ("ZDP") shares
are listed on the standard segment of the main market of the London
Stock Exchange.
Corporate Governance
Bermuda does not have its own corporate governance code and, as
a Bermuda incorporated company, the Company is not required to
comply with the UK Corporate Governance Code issued by the
Financial Reporting Council (the "Code"). However, it is the
Company's policy to comply with best practice on good corporate
governance and maintain the same level of governance as UK listed
investment companies. The Board has therefore considered the
principles set out in the AIC Code of Corporate Governance (the
"AIC Code") and the relevant provisions of the Code.
Except as disclosed below, the Company complied throughout the
period with the recommendations of the AIC Code and the relevant
provisions of the Code. The provisions of the Code regarding the
role of chief executive and on Directors' remuneration are not
relevant to the Company and are not reported on further.
In view of the requirement of the Bye-Laws that all Directors
retire by rotation, the Board considers that it is not appropriate
for the Directors to be appointed for specified terms as
recommended by the AIC Code. However, in accordance with provision
B.7.1 of the Code and principle 3 of the AIC Code, all Directors
are subject to election by shareholders at the first annual general
meeting following their appointment and to re-election thereafter
at intervals of no more than three years. Any Director serving
beyond nine years is required to seek annual re-election. The Board
of Directors does not consider it is necessary to appoint a Senior
Independent Director.
Results and Dividends
The results for the period are set out in the attached accounts
which are prepared on a going concern basis (see note 13).
The Company has not declared a dividend in respect of the period
ended 31 December 2016.
Placing of 2020 ZDP Shares
On 14 July 2016 the Company placed 14 million 2020 ZDP Shares at
128p per share with certain institutional and other investors
(including 3,225,815 new 2020 ZDP Shares with UIL Limited) raising
gross proceeds of GBP17.9 million.
Redemption of the 2016 ZDP shares
The outstanding 32,546,966 2016 ZDP Shares were redeemed in full
on 31 October 2016 at 192.78p per share.
Directors
The following Directors held office throughout the period,
unless otherwise stated:
Peter Burrows (Chairman)
Alison Hill
Warren McLeland
Christopher Samuel
David Shillson
Eric Stobart
Directors' Disclosures
At 31 December 2016, no Director had any interest in the
Company's shares (2015: none). No Director acquired or disposed of
any interest in the shares in the Company during the period or
since the period end.
Re-election of Directors
Each Director has signed a letter of appointment setting out the
terms of their engagement as a Director, but does not have a
service agreement with the Company.
Board Meetings
The Board meets at least twice a year to consider strategic
affairs and to approve the interim report and the annual report and
accounts. In view of the nature of the Company's business the Board
does not consider it necessary to appoint a separate audit
committee or nominations committee.
Directors' Remuneration
No Director received or is entitled to receive any remuneration
from the Company.
Statement of Changes in Equity
There were no movements in equity attributable to equity holders
and a statement of changes in equity has therefore not been
prepared.
Cash Flow
There were no cash flows in the period and therefore a cash flow
statement has not been prepared.
Share Capital
Full details of the changes to the Company's authorised and
issued share capital during the period can be found in note 8 to
the accounts.
Ordinary shares of UIL Limited
Ordinary shares of UIL Limited rank behind the ZDP shares on a
winding up of the Company and UIL Limited, together referred to as
the Group (save for any undistributed revenue reserves of UIL
Limited on a winding up).
Auditor
KPMG LLP ("KPMG") was the Company's auditor for the year ended
30 June 2016 and was re-appointed as auditor to the Company at the
AGM of the Company on 16 November 2016.
By order of the Board
ICM Investment Management Limited,
Secretary
21 February 2017
UIL Finance Limited
Directors' Statement of Responsibilities
In accordance with Chapter 4 of the Disclosure and Transparency
Rules, the Directors confirm that to the best of their
knowledge:
-- The condensed set of financial statements contained within
the report for the six months to 31 December 2016 has been prepared
in accordance with International Accounting Standard 34 "Interim
Financial Reporting" and gives a true and fair view of the assets,
liabilities, financial position and return of the Company;
-- The half-yearly financial report includes a fair review of
the important events that have occurred during the first six months
of the financial year and their impact on the financial statements
as required by DTR 4.2.7R;
-- The Directors' statement of principal risks and uncertainties
above is a fair review of the principal risks and uncertainties for
the remainder of the year as required by DTR 4.2.7R;
-- The half-yearly report includes a fair review of the related
party transactions that have taken place in the first six months of
the financial year as required by DTR 4.2.8R.
On behalf of the Board
Peter Burrows
Chairman
21 February 2017
UIL Finance Limited
Unaudited Condensed Income Statement
Six months Six months
to to Year to
31 December 31 December 30 June
2016 2015 2016
Note GBP'000s GBP'000s GBP'000s
----------------------- ----- ------------ ------------ ---------
Interest income 2 6,960 6,279 12,745
------------------------ ----- ------------ ------------ ---------
Total income 6,960 6,279 12,745
Other expenses - - -
----------------------- ----- ------------ ------------ ---------
Profit before finance
costs and taxation 6,960 6,279 12,745
------------------------ ----- ------------ ------------ ---------
Finance costs 3 (6,960) (6,279) (12,745)
------------------------ ----- ------------ ------------ ---------
Profit before tax - - -
Taxation - - -
------------------------ ----- ------------ ------------ ---------
Profit for the period - - -
------------------------ ----- ------------ ------------ ---------
Earnings per share
- pence - - -
------------------------ ----- ------------ ------------ ---------
The Company does not have any income or expense
that is not included in the profit for the period,
and therefore the 'profit for the period' is also
the 'total comprehensive income for the period',
as defined in International Accounting Standard
1 (revised).
All items in the above statement are derived
from continuing operations.
UIL Finance Limited
Unaudited Condensed Balance
Sheet
As at 31 December 31 December 30 June
2016 2015 2016
Note GBP'000s GBP'000s GBP'000s
----------------------------- ----- ------------ ------------ ----------
Current assets
Other receivables 6 168,041 178,720 206,373
----------------------------- ----- ------------ ------------ ----------
Current liabilities
Zero dividend preference
shares 7 - (86,448) (61,327)
----------------------------- ----- ------------ ------------ ----------
Total assets less current
liabilities 168,041 92,272 145,046
Non-current liabilities
Zero dividend preference
shares 7 (168,041) (92,272) (145,046)
----------------------------- ----- ------------ ------------ ----------
Net assets - - -
----------------------------- ----- ------------ ------------ ----------
Equity attributable to
equity holders
Ordinary share capital 8 - - -
----------------------------- ----- ------------ ------------ ----------
UIL Finance Limited
Unaudited Condensed Notes to the Accounts
for the period to 31 December 2016
1. Accounting policies
The Company is an investment company incorporated in Bermuda on
17 January 2007. The accounting policies below are unchanged from
the previous year.
(a) Basis of accounting
The financial statements of the Company have been prepared on a
going concern basis in accordance with International Financial
Reporting Standards as adopted by the European Union, which
comprise standards and interpretations approved by the
International Accounting Standards Board and International
Accounting Standards Committee that remain in effect.
A Statement of Changes in Equity has not been presented as there
is no movement in the current or prior period.
At the date of authorisation of these Accounts, the following
standards and interpretations have not been applied in these
Accounts since they were in issue but not yet effective:
International Accounting Effective date for accounting
Standards (IAS/IFRS) periods starting on or after
IFRS 9 Financial Instruments 1 January 2018
The Directors have chosen not to early adopt these standards and
interpretations as they do not anticipate that they would have a
material impact on the Company's Accounts in the period of initial
application.
(b) Zero dividend preference shares
The ZDP shares, due to be redeemed on 31 October 2018, 2020 and
2022, at a redemption value of 160.52 pence per share, 154.90 pence
per share and 146.99 pence per share respectively, have been
classified as liabilities, as they represent an obligation on
behalf of the Company to deliver to their holders a fixed and
determinable amount at the redemption date. They are accordingly
accounted for at amortised cost, using the effective interest
method. Under Bermuda company law ZDP shares are recognised as
share capital in the Company.
(c) Cash flow statement
There were no cash flows in the period or in the prior year and
therefore a cash flow statement has not been prepared. All
transaction movements were through the intra-group loan
account.
(d) Foreign currency
The functional and reporting currency is pounds sterling because
the Company's ZDP share capital was raised, and will be repaid, in
pounds sterling, and has been lent to, and will be repaid, by the
parent company, in that currency.
(e) Interest income
Interest on debt is accrued on a time basis using the effective
interest method.
(f) Expenses
The Company incurs no expenses other than finance costs. The
Directors are not entitled to receive any remuneration and all
other expenses relating to the Company are paid in full by the
parent company.
(g) Finance costs
Finance costs are accounted for on an effective interest
method.
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
1. Accounting policies (continued)
(h) Inter company loan
UIL Limited has agreed to place the Company in sufficient funds
to enable the Company to pay the capital entitlement of each class
of ZDP share on their respective redemption dates. The amount owed
in the accounts is based on the entitlements of the ZDP
shareholders at the relevant date.
2 Interest income
Six months Six months Year
to to to
31 December 31 December 30 June
2016 2015 2016
GBP'000s GBP'000s GBP'000s
-------------------------- ------------ ------------ ---------
Loan to parent company -
interest receivable 6,960 6,279 12,745
-------------------------- ------------ ------------ ---------
3 Finance costs
Six months Six months Year
to to to
31 December 31 December 30 June
2016 2015 2016
GBP'000s GBP'000s GBP'000s
------------ ------------ ------------ ---------
ZDP shares 6,960 6,279 12,745
------------ ------------ ------------ ---------
4. Earnings per share
The calculation of earnings per share is based on a profit after
tax for the period of GBPnil (for the periods to 31 December 2015
and 30 June 2016: GBPnil) and a weighted average number of 10
ordinary shares in issue during the period (for the periods 31
December 2015 and 30 June 2016: 10 ordinary shares in issue).
5. Dividends
There were no dividends paid or declared in respect of the
period.
6. Other receivables
31 December 31 December 30 June
2016 2015 2016
GBP'000s GBP'000s GBP'000s
-------------------------- ------------ ------------ ---------
Loan to parent company -
UIL Limited 168,041 178,720 206,373
-------------------------- ------------ ------------ ---------
The loan is repayable on demand.
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
7. Zero dividend preference shares
31 December 31 December 30 June
2016 2015 2016
GBP'000s GBP'000s GBP'000s
---------------------------------- ------------ ------------ ---------
ZDP shares - current liabilities
2016 ZDP shares - 86,448 61,327
---------------------------------- ------------ ------------ ---------
ZDP shares - non-current
liabilities
2018 ZDP shares 70,046 65,152 67,548
2020 ZDP shares 47,169 27,120 28,134
2022 ZDP shares 50,826 - 49,364
---------------------------------- ------------ ------------ ---------
168,041 92,272 145,046
---------------------------------- ------------ ------------ ---------
Total ZDP shares liabilities 168,041 178,720 206,373
---------------------------------- ------------ ------------ ---------
Authorised ZDP shares of the Company at 31 December 2016 and 30
June 2016 are as follows:
Number GBP'000s
----------------------------- ----------- ---------
2016 ZDP shares of 10p each 45,046,966 4,505
2018 ZDP shares of 5.9319p
each 70,198,945 4,164
2020 ZDP shares of 6.0514p
each 50,000,000 3,026
2022 ZDP shares of 5.3180p
each 78,117,685 4,154
------------------------------ ----------- ---------
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
7. Zero dividend preference shares (continued)
ZDP shares issued by the Company are as follows:
31 December 2016 2018 2020 2022 Total
2016 Number GBP'000s Number GBP'000s Number GBP'000s Number GBP'000s GBP'000s
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
Balance at
30 June
2016 32,546,966 61,327 49,842,413 67,548 25,000,000 28,134 50,000,000 49,364 206,373
Issue of
ZDP shares - - - - 14,000,000 17,920 - - 17,920
Issue costs
of ZDP
shares - - - - - (345) - (123) (468)
Redemption
of 2016
ZDP shares (32,546,966) (62,744) - - - - - - (62,744)
Finance
costs - 1,417 - 2,498 - 1,460 - 1,585 6,960
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
Balance at
31
December
2016 - - 49,842,413 70,046 39,000,000 47,169 50,000,000 50,826 168,041
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
2016 2018 2020 Total
31 December 2015 Number GBP'000s Number GBP'000s Number GBP'000s GBP'000s
------------------------- ------------- --------- ------------- --------- ----------- --------- ----------
Balance at 30 June 2015 47,500,000 83,493 49,842,413 62,816 25,000,000 26,132 172,441
Finance costs - 2,955 - 2,336 - 988 6,279
------------------------- ------------- --------- ------------- --------- ----------- --------- ----------
Balance at
31 December 2015 47,500,000 86,448 49,842,413 65,152 25,000,000 27,120 178,720
------------------------- ------------- --------- ------------- --------- ----------- --------- ----------
30 June 2016 2018 2020 2022 Total
2016
Number GBP'000s Number GBP'000s Number GBP'000s Number GBP'000s GBP'000s
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
Balance at
30 June
2015 47,500,000 83,493 49,842,413 62,816 25,000,000 26,132 - - 172,441
Issue of
ZDP shares - - - - - - 50,000,000 50,000 50,000
Issue costs
of ZDP
shares - - - - - - - (696) (696)
Conversion
of 2016
ZDP shares (14,953,034) (28,117) - - - - - - (28,117)
Finance
costs - 5,951 - 4,732 - 2,002 - 60 12,745
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
Balance at
30 June
2016 32,546,966 61,327 49,842,413 67,548 25,000,000 28,134 50,000,000 49,364 206,373
------------ ------------- --------- ------------- --------- ----------- --------- ----------- --------- ----------
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
7. Zero dividend preference shares (continued)
On 1 July 2016, UIL Finance Limited announced plans to issue up
to 14 million 2020 ZDP shares pursuant to the Placing Programme at
a price of 128p per 2020 ZDP Share. The 14 million 2020 ZDP shares
were admitted to the Official List and to trading on the London
Stock Exchange and dealings on 14 July 2016. A total of 10,774,185
new 2020 ZDP shares were placed with certain institutional
investors at a price of 128p per 2020 ZDP share raising gross
proceeds of GBP13.8 million. The remaining 3,225,815 new 2020 ZDP
shares were acquired by UIL Limited at a price of 128p per 2020 ZDP
share and held by UIL Limited for investment purposes in accordance
with its investment policy. In the period UIL Limited sold
1,942,059 2020 ZDP shares in the open market and held 1,283,756
2020 ZDP shares at 31 December 2016.
UIL Limited held 9,000,788 2022 ZDP shares at 30 June 2016. In
the period UIL Limited sold 3,526,007 2022 ZDP shares in the open
market and held 5,474,781 2022 ZDP shares at 31 December 2016.
On 31 October 2016 the remaining 32,546,966 2016 ZDP shares that
were in issue, inclusive of 503,008 2016 ZDP shares purchased in
the open market in the period by UIL Limited, were redeemed at
192.78p per 2016 ZDP share.
2018 ZDP shares
Based on the initial entitlement of a 2018 ZDP share of 100p on
26 January 2012, a 2018 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2018 of 160.52p
equating to a 7.25% per annum gross redemption yield. The capital
entitlement (excluding issue costs) per 2018 ZDP share at 31
December 2016 was 141.18p (31 December 2015: 131.65p and 30 June
2016: 136.81p).
2020 ZDP shares
Based on the initial entitlement of a 2020 ZDP share of 100p on
31 July 2014, a 2020 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2020 of 154.90p
equating to a 7.25% per annum gross redemption yield. The capital
entitlement (excluding issue costs) per 2020 ZDP share at 31
December 2016 was 118.43p (31 December 2015: 110.43p and 30 June
2016: 114.77p).
2022 ZDP shares
Based on the initial entitlement of a 2022 ZDP share of 100p on
23 June 2016, a 2022 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2022 of 146.99p
equating to a 6.25% per annum gross redemption yield. The capital
entitlement (excluding issue costs) per 2022 ZDP share at 30 June
2016 was 100.43p (31 December 2015: not applicable and 30 June
2016: 100.43p).
The ZDP shares are admitted to the standard segment of the
Official List and to trading on the London Stock Exchange and are
stated at amortised cost using the effective interest method. The
ZDP shares carry no entitlement to income however they have a
pre-determined final capital entitlement which ranks behind all
other liabilities and creditors of the Company and UIL Limited but
in priority to the ordinary shares of the Company and UIL Limited
save in respect of certain winding up revenue profits of UIL
Limited.
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
7. Zero dividend preference shares (continued)
The growth of each ZDP share accrues daily and is reflected in
the return and net asset value per ZDP share on an effective
interest method. The ZDP shares do not carry any voting rights at
general meetings of the Company. However the Company will not be
able to carry out certain corporate actions unless it obtains the
separate approval of the ZDP shareholders (treated as a single
class) at a separate meeting. Separate approval of each class of
ZDP shareholders must be obtained in respect of any proposals which
would affect their respective rights, including any resolution to
wind up the Company. In addition the approval of ZDP shareholders
by the passing of a special resolution at separate class meetings
of the ZDP shareholders is required in relation to any proposal to
modify, alter or abrogate the rights attaching to any class of the
ZDP shares and in relation to any proposal by the Company or its
parent company which would reduce the Group's cover of the existing
2018 ZDP shares below 1.5 times and the Group's cover of the
existing 2020 ZDP shares and 2022 ZDP shares below 1.35 times.
On a liquidation of UIL Limited and/or the Company, to the
extent that the relevant classes of ZDP shares have not already
been redeemed, the shares shall rank in the following order of
priority in relation to the repayment of their accrued capital
entitlement as at the date of liquidation:
(i) the 2018 ZDP shares shall rank in priority to the 2020 ZDP
shares and the 2022 ZDP shares; and
(ii) the 2020 ZDP shares shall rank in priority to the 2022 ZDP
shares.
The entitlement of ZDP Shareholders of a particular class shall
be determined in proportion to their holdings of ZDP shares of that
class.
8. Ordinary share capital
Number GBP
Authorised
Ordinary shares of 10p each 10 1
------------------------------- ------- ----
Issued and nil paid
Balance at 31 December 2016,
31 December 2015 10 -
and 30 June 2016
------------------------------- ------- ----
In addition to receiving any income distributed by way of
dividend, the ordinary shareholders will be entitled to all surplus
assets after payment of all debts, including ZDP shares.
Net asset value per ordinary share is GBPnil (31 December 2015:
nil and 30 June 2016: GBPnil) based on 10 shares in issue.
9. Parent company
UIL Limited, incorporated in Bermuda, is the parent company of
the Company, holding 100% of the nil paid ordinary shares.
In the opinion of the Directors, the ultimate holding
undertaking is General Provincial Life Pension Fund (L) Limited,
which is incorporated in Malaysia, holding 62.0% of the ordinary
shares in UIL Limited.
10. Related party transactions
UIL Limited, General Provincial Life Pension Fund (L) Limited
and the Board of the Company are considered related parties.
Amounts owing from related parties are disclosed in the financial
statements in note 6, ZDP shares issued to UIL Limited are
disclosed in note 7 and interest receivable from related parties is
disclosed in note 2. Details of ZDP shares traded and held by UIL
Limited are disclosed in note 7.
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
11. Operating Segments
The Directors are of the opinion that the Company's activities
comprise a single business segment of financing the Company's ZDP
shares debt by lending current asset funds to its parent company
and therefore no segmental reporting is provided.
12. Financial Risk Management
The Board of Directors is responsible for the Company's risk
management. The Directors' policies and processes for managing the
financial risks are set out in the interest rate exposure and
credit risk management sections below.
The accounting policies which govern the reported Balance Sheet
carrying values of the underlying financial assets and liabilities,
as well as the related income and expenditure, are set out in note
1 to the accounts. The policies are in compliance with
International Financial Reporting Standards as adopted by the
European Union and best practice, and include the valuation of
financial assets at fair value and liabilities at amortised
cost.
Interest Rate exposure
The exposure of the financial assets and liabilities to interest
risks is shown below:
Within More than
Total one year one year
31 December 2016 GBP'000s GBP'000s GBP'000s
--------------------------------- ---------- --------- ----------
Exposure to fixed rates
Zero dividend preference shares (168,041) - (168,041)
Intra-group loan 168,041 168,041 -
--------------------------------- ---------- --------- ----------
Net exposures
At period end - 168,041 (168,041)
Maximum in period - 168,041 (168,041)
Minimum in period - 145,046 (145,046)
--------------------------------- ---------- --------- ----------
Within More than
Total one year one year
31 December 2015 GBP'000s GBP'000s GBP'000s
--------------------------------- ---------- --------- ----------
Exposure to fixed rates
Zero dividend preference shares (178,720) (86,448) (92,272)
Intra-group loan 178,720 178,720 -
--------------------------------- ---------- --------- ----------
Net exposures
At period end - 92,272 (92,272)
Maximum in period - 176,579 (176,579)
Minimum in period - 91,338 (91,338)
--------------------------------- ---------- --------- ----------
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
12. Financial Risk Management (continued)
Within More than
Total one year one year
30 June 2016 GBP'000s GBP'000s GBP'000s
--------------------------------- ---------- --------- ----------
Exposure to fixed rates
Zero dividend preference shares (206,373) (61,327) (145,046)
Intra-group loan 206,373 206,373 -
--------------------------------- ---------- --------- ----------
Net exposures
At period end - 145,046 (145,046)
Maximum in period - 176,614 (176,614)
Minimum in period - 145,046 (145,046)
--------------------------------- ---------- --------- ----------
Credit Risk exposure
The Company is exposed to potential failure by its parent
company to settle the ZDP share liability on behalf of the Company
on the respective repayment dates. The Board assesses this risk at
each Board meeting.
2018 ZDP shares
Based on their final entitlement of 160.52p per share, the final
entitlement of the 2018 ZDP shares were covered 3.09 times by UIL
Limited's gross assets on 31 December 2016. Should the gross assets
fall by 67.6% over the remaining life of the 2018 ZDP shares, then
the 2018 ZDP shares would not receive their final entitlements in
full. Should gross assets fall by 84.3%, equivalent to an annual
fall of 63.6%, the 2018 ZDP shares would receive no payment at the
end of their life.
2020 ZDP shares
Based on their final entitlement of 154.90p per share, the final
entitlement of the 2020 ZDP shares were covered 2.22 times by UIL
Limited's gross assets on 31 December 2016. Should gross assets
fall by 55.0% over the remaining life of the 2020 ZDP shares, then
the 2020 ZDP shares would not receive their final entitlements in
full. Should gross assets fall by 67.6%, equivalent to an annual
fall of 25.5%, the 2020 ZDP shares would receive no payment at the
end of their life.
2022 ZDP shares
Based on their final entitlement of 146.99p per share, the final
entitlement of the 2022 ZDP shares were covered 1.66 times by UIL
Limited's gross assets on 30 June 2016. Should gross assets fall by
39.6% over the remaining life of the 2022 ZDP shares, then the 2022
ZDP shares would not receive their final entitlements in full.
Should gross assets fall by 55.0%, equivalent to an annual fall of
12.8%, the 2022 ZDP shares would receive no payment at the end of
their life.
None of the Company's financial liabilities is past due or
impaired.
UIL Finance Limited
Unaudited Condensed Notes to the Accounts (continued)
12. Financial Risk Management (continued)
Fair Values of financial assets and liabilities
The assets and liabilities of the Company are, in the opinion of
the Directors, reflected in the Balance Sheet at fair value except
for ZDP shares which are carried at amortised cost using effective
interest method in accordance with IAS39, or at a reasonable
approximation thereof.
The fair values of the ZDP shares based on their quoted market
value were:
31 December 31 December 30 June
2016 2015 2016
GBP'000s GBP'000s GBP'000s
----------------- ------------ ------------ ---------
2016 ZDP shares - 89,894 62,165
2018 ZDP shares 76,947 72,022 73,393
2020 ZDP shares 52,065 31,033 32,500
2022 ZDP shares 54,875 - 52,250
----------------- ------------ ------------ ---------
Capital risk management
The objective of the Company is to finance and fund the
redemption value of the ZDP shares. The Board has a responsibility
for ensuring the Company's ability to continue as a going concern
and to meet the redemption of the ZDP shares.
13. Going Concern
The Directors believe in the light of the controls and
monitoring processes that are in place, the Company has adequate
resources and arrangements, due to the support of the parent
company, to continue operating within its stated objective and
policy for the foreseeable future and that it is appropriate to
adopt the going concern basis in preparing the accounts.
14. Results
The condensed set of financial statements, forming the half-year
accounts, has been neither audited nor reviewed by the Company's
auditor. The latest published accounts are for the year ended 30
June 2016; the report of the auditor thereon was unqualified. The
condensed financial statements shown above for the year ended 30
June 2016 are an extract from those accounts and are not the
Company's statutory financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR URVSRBSAUUAR
(END) Dow Jones Newswires
February 21, 2017 02:00 ET (07:00 GMT)
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