REG - UIL Finance Ltd UIL Limited Utilico Limited 2014 UIL Finance - UTLG - Annual Financial Report
30/09/2025 07:00
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RNS Number : 3069B UIL Finance Limited 29 September 2025
UIL Finance Limited
REPORT AND ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2025
UIL Finance Limited
REPORT AND ACCOUNTS
for the year ended 30 June 2025
Contents Page
Company Directory 2
Strategic Report 3
Directors' Report 4
Statement of Directors' Responsibilities 7
Independent Auditor's Report 8
Income Statement 11
Statement of Changes in Equity 11
Statement of Cash Flows 11
Statement of Financial Position 12
Notes to the Accounts 13
UIL Finance
Limited
COMPANY DIRECTORY
Registered Office Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Directors Stuart Bridges (Chairman)
Peter Durhager
Alison Hill
David Shillson
Company Number 39479
Legal Entity Identifier 213800JPJWZ5P3QJX538
Auditor KPMG Audit Limited
Crown House
4 Par-la-Ville Road
Hamilton HM 08
Bermuda
Date of Formation 17 January 2007
Nature of Business Closed end investment company
Ordinary Shareholder and Parent Company UIL Limited
UIL Finance Limited
STRATEGIC REPORT
The Strategic Report 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 zero dividend preference ("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 issued by the International Accounting Standards Board ("IASB").
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 ("ICM"). ICM is the 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. As at 30 June 2025, the parent
company had net assets of £166,382,000 (2024: £136,927,000) after providing
for amounts due to ZDP shareholders. Details of the ZDP shares are set out in
note 8 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 which is based
on the ability of its parent company to repay the intra-group loan to the
Company. The KPIs for the parent company can be found in UIL Limited's Annual
Report.
This Strategic Report was approved by the Board of Directors on 29 September
2025.
ICM Limited
Company Secretary
29 September 2025
UIL Finance Limited
DIRECTORS' REPORT
The Directors present their report and accounts of the Company for the year
ended 30 June 2025.
Principal activity and status
UIL Finance Limited (the "Company" or "UIL Finance") is a Bermuda exempted,
closed ended investment company with company registration number 39479. The
Company's issued ZDP shares are listed in the non-equity shares and non-voting
equity shares category of the Official List of the Financial Conduct Authority
and are traded on the Main Market of the London Stock Exchange.
Corporate Governance
Bermuda does not have its own corporate governance code and, since the Company
has a listing in the non-equity shares and non-voting equity shares category
of the Official List of the Financial Conduct Authority, the Company is not
required to comply or provide an explanation for any non-compliance with the
UK Corporate Governance Code issued by the Financial Reporting Council.
The Board meets at least twice a year to consider strategic affairs and to
approve the half yearly report and the annual report and accounts.
In the Directors' opinion, the interests of the Company and its shareholders
are adequately covered by the governance procedures applicable to its parent
company, UIL Limited. For example, UIL Limited's Audit & Risk Committee
considers the financial reporting procedures and oversees the internal control
and risk management systems for the Group as a whole and the Directors see no
benefit in convening a separate Audit Committee or any other committee for the
Company. An overview of the Group's internal control and risk management
systems are set out in UIL Limited's report and accounts.
Board Diversity
Listing Rule 16.3.29R requires companies to report against the following three
diversity targets:
(i) At least 40% of individuals on the board are women;
(ii) At least one of the senior board positions (defined in the Listing Rules
as the chair, CEO, SID and CFO) is held by a woman; and
(iii) At least one individual on the board is from a minority ethnic
background.
As at 30 June 2025, the Company's Board consists of three men and one woman,
all of whom are White British or other White, and UIL Finance does not comply
with targets (i) and (iii). As provided for in the Listing Rules, investment
companies do not need to report against target (ii) if it is inapplicable. The
Board believes that, since UIL Finance is an investment company which does not
have executive management functions, including the roles of CEO or CFO, this
target is not applicable.
Ms Hill has indicated that she intends to step down from the Board after the
forthcoming AGM. In light of the proposals to privatise the Company after
the redemption of the 2028 ZDP shares, the Company plans to use the
opportunity to minimise costs and will continue with a Board of three
Directors.
The Board has chosen to align its diversity reporting reference date with the
Company's financial year end. As required by the Listing Rules, further
details in relation to the three diversity targets are set out in the tables
below. The information was obtained by asking each of the Directors how they
wished to be categorised for the purposes of these disclosures:
30 June 2025 Number of Board members Percentage Number of senior positions on the Board (CEO, CFO, SID, Chair)
of the Board
Men 3 75% Not applicable*
Woman 1 25%
White British or other White (including minority-white groups) 4 100% Not applicable*
* This column is inapplicable as the company is externally managed and does
not have executive management functions, specifically it does not have a CEO ,
CFO.
Results and Dividends
The results for the year are set out in the attached accounts which are
prepared on a going concern basis and as set out in note 14, the Directors
believe that it is appropriate to adopt the going concern basis in preparing
the accounts as the Company can continue to operate due to the contractual
obligation of the parent company to ensure that UIL Finance is able to redeem
the ZDP shares on each repayment date and the Directors are comfortable that
the parent company has the financial resources to do so.
The Company has not declared a dividend in respect of the year ended 30 June
2025 (2024: nil).
Directors
The following Directors held office throughout the year, unless otherwise
stated:
Stuart Bridges (Chairman)
Peter Durhager
Alison Hill
David Shillson
Directors' Disclosures
As at 30 June 2025, no Director had any interest in the Company's shares
(2024: none). No Director acquired or disposed of any interest in the shares
in the Company during the year or since the year end.
Election and re-election of Directors
The Company's Bye-laws require that a Director be subject to election at the
first AGM after appointment and shall retire and be subject to re-election at
least every three years thereafter. However, the directors have voluntarily
agreed to be subject to annual re-election. As referred to above, Ms Hill
will be stepping down from the Board following the conclusion of the
forthcoming AGM, so therefore just Mr Bridges, Mr Durhager and Mr Shillson
will stand for re-election at that meeting.
The Board has considered the re-election of these three Directors individually
and has reviewed the composition of the Board as a whole and borne in mind the
need for a proper balance of skills and experience. Following an appraisal of
the performance of each of the Directors, the Board believes that these
Directors make a valuable contribution based on their individual skills,
knowledge and experience. They have commitment to their roles and the Board
believes that their re-election would be in the best interests of the Company.
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 half yearly 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.
Zero dividend preference shares
Full details of the changes to the Company's authorised and issued zero
dividend preference shares during the year can be found in note 8 to the
accounts.
Ordinary Share Capital
Full details of the changes to the Company's authorised and issued ordinary
share capital during the year can be found in note 9 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 Audit Limited ("KPMG") was the Company's auditor for the year ended 30
June 2024 and was appointed as auditor to the Company at the AGM of the
Company on 14 November 2024. KPMG was responsible for the audit of these
accounts.
Audit fees relating to the year amounted to £8,000 (2024: £8,000) and were
settled by the parent company, UIL Limited.
No fees were paid or payable to KPMG for non-audit work for the year under
review (2024: £nil).
Audit Information and Auditor
The Directors who held office at the date of approval of this Directors'
Report confirm that, so far as they are aware, there is no relevant audit
information of which the Company's auditor is unaware; and each Director has
taken all the steps that they ought to have taken as a Director to make
themselves aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
By order of the Board
ICM Limited,
Secretary
29 September 2025
UIL Finance Limited
STATEMENT OF DIRECTORS' RESPONSIBILITIES
in respect of the Report and Accounts
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable law and regulations.
The Directors are required to prepare Company financial statements for each
financial year. They have elected to prepare the financial statements in
accordance with IFRS Accounting Standards and applicable law.
The Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss for that period. In preparing the financial
statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and estimates that are reasonable, relevant and
reliable;
· state whether they have been prepared in accordance with applicable
accounting standards;
· assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
· use the going concern basis of accounting unless they either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that its financial statements comply with the Companies
Act 1981 of Bermuda. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK and Bermuda governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company; and
· the Strategic Report and Director' Report include a fair review of the
development and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties that it
faces.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
Approved by the Board on 29 September 2025 and signed on its behalf by:
Stuart Bridges
Chairman
KPMG Audit Limited Telephone +1 441 295 5063
Crown House Fax +1 441 295 9132
4 Par-la-Ville Road Internet www.kpmg.bm (http://www.kpmg.bm)
Hamilton
HM 08
Bermuda
Independent Auditor's Report
To the Shareholder and Board of Directors of UIL Finance Limited
Opinion
We have audited the financial statements of UIL Finance Limited ("the
Company"), which comprise the statement of financial position as at 30 June
2025, income statement, the statements of changes in equity and cash flows for
the year then ended, and notes, comprising material accounting policies and
other explanatory information.
In our opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of the Company as at 30 June 2025,
and its financial performance for the year then ended in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board
(IFRS Accounting Standards).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
("ISAs"). Our responsibilities under those standards are further described in
the "Auditor's responsibilities for the audit of the financial statements"
section of our report. We are independent of the Company in accordance with
International Ethics Standards Board for Accountants International Code of
Ethics for Professional Accountants (including International Independence
Standards) ("IESBA Code") together with the ethical requirements that are
relevant to our audit of the financial statements in Bermuda, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period. The matter referred to below was addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on this matter.
Recoverability of loan to UIL Limited (the 'Parent Company')
As presented in the Material Accounting Policies in Note 1 (h) and in Note 7
to the financial statements, the Company has £ 66.447 million due from the
Parent Company.
The risk
The carrying amount of the loan to the Parent Company represents 100% of the
Company's total assets. The recoverability of this loan, given that it
represents a significant amount of the Company's total assets, is a
significant area of our audit.
Our response
Our procedures included:
§ Obtaining external confirmation of the loan with the Parent Company as
of the reporting date.
© 2025 KPMG Audit Limited, a Bermuda limited liability company and a member
firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by
guarantee. All rights reserved.
§ Inspecting the Parent Company's audited financial statements to ensure
positive net asset value for determining the loan cover ratio as of the
reporting date.
§ Inspecting the Parent Company's cash flow projections to assess its ability
to repay its obligations as they fall due, including challenging key
judgements and assumptions made in these projections.
§ Assessing the adequacy of the Company's disclosures in respect of the loan
balance.
Other information
Management is responsible for the other information. The other information
comprises the strategic report, directors' report and the statement of
directors' responsibilities but does not include the financial statements and
our auditor's report thereon.
Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
financial statements
Management is responsible for the preparation and fair presentation of the
financial statements in accordance with IFRS Accounting Standards, and for
such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing
the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditors' report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
§ Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
§ Obtain an understanding of internal controls relevant to the audit in order
to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal controls.
© 2025 KPMG Audit Limited, a Bermuda limited liability company and a member
firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by
guarantee. All rights reserved.
§ Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management.
§ Conclude on the appropriateness of management's use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw
attention in our auditors' report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
§ Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves
fair presentation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal controls that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's Shareholder and Board of
Directors. Our audit work has been undertaken so that we might state to the
Company's Shareholder and Board of Directors those matters we are required to
state to them in an auditor's 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 Shareholder and Board of Directors, as a body, for our audit
work, for this report, or for the opinion we have formed.
The engagement partner on the audit resulting in this independent auditor's
report is Bron Turner.
Chartered Professional Accountants
Hamilton, Bermuda
29 September 2025
© 2025 KPMG Audit Limited, a Bermuda limited liability company and a member
firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by
guarantee. All rights reserved.
UIL Finance Limited
INCOME STATEMENT
Year to Year to
30 June 30 June
2025 2024
Note £'000s £'000s
Income 2 4,337 5,393
Total income 4,337 5,393
Other expenses - -
Profit before finance costs and taxation 4,337 5,393
Finance costs 3 (4,337) (5,393)
Result before taxation - -
Taxation 4 - -
Result for the year - -
Earnings per share - pence 5 - -
The Company does not have any income or expense that is not included in the
result for the year and therefore the result for the year is also the total
comprehensive income for the year, as defined in International Accounting
Standard 1 (revised).
All items in the above statement are derived from continuing operations.
The notes on pages 13 to 21 form part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
There are no movements in equity.
STATEMENT OF CASH FLOWS
There were no cash flows in the period and therefore a cash flow statement has
not been prepared.
UIL Finance Limited
STATEMENT OF FINANCIAL POSITION
As at 30 June 2025 2024
Note £'000s £'000s
Non-current assets
Other receivables 7 66,447 62,837
Current assets
Other receivables 7 - 40,778
Current liabilities
Zero dividend preference shares 8 - (40,778)
Total assets less current liabilities 66,447 62,837
Non-current liabilities
Zero dividend preference shares 8 (66,447) (62,837)
Net assets - -
Equity attributable to equity holders
Ordinary share capital 9 - -
Approved by the Board on 29 September 2025 and signed on its behalf by
Stuart Bridges
Chairman
The notes on pages 13 to 21 form part of these financial statements.
UIL Finance Limited
NOTES TO THE ACCOUNTS
for the year to 30 June 2025
The Company is an investment company incorporated in Bermuda on 17 January
2007.
1. Material accounting policies
(a) Basis of accounting
The financial statements of the Company have been prepared on a going concern
basis (see note 14) in accordance with IFRS Accounting Standards.
There have been no significant changes to the accounting policies during the
year to 30 June 2025.
A number of new standards and amendments to standards and interpretations,
which have not been applied in preparing these accounts, were in issue but not
effective. The impact from adoption of IFRS 18, Presentation and Disclosure in
Financial Statements, effective from 1 January 2027, is being assessed. None
of the other standards are expected to have a material effect on the accounts
of the Company.
(b) Zero dividend preference shares
The ZDP shares, due to be redeemed on 31 October 2026 and 2028, at a
redemption value, including accrued capitalised returns of 151.50 pence per
share and 152.29 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 as per the requirements of IFRS 9 "Financial
Instruments", even though under Bermuda company law ZDP shares are required to
be 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) Income
(i) Interest income
Interest on debt is accrued on a time basis using the effective interest
method, calculated by accreting the initial recognition of the inter-company
loan at present value (loan and contribution by the parent) to the final
amount receivable at maturity.
(ii) Other income
The parent's contribution towards the issue costs of the ZDP shares and
redemption proceeds is accrued on a time basis, calculated by amortising the
issue costs over the life of the loan.
(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.
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
1. Accounting policies (continued)
(g) Finance costs
Finance costs are accounted for on an effective interest method.
(h) Inter company loans
UIL Limited has undertaken (i) to repay any interest free loan, and (ii) to
reimburse the Company (by way of payment in advance, if required) any and all
costs, expenses, fees or interest the Company incurs or is otherwise liable to
pay to the holder of the ZDP shares so as to enable the Company to pay the
final capital entitlement of each class of ZDP share on their respective
redemption date. The amount owed in the accounts is based on the entitlements
of the ZDP shareholders at the relevant date. The inter company loans are
accordingly accounted for at amortised cost, using the effective interest
method and were assessed for credit risk under the new IFRS 9 methodology and
evaluated as having no significant credit risk. Therefore, no amounts were
recognised as an impairment provision.
(i) Use of judgements, estimates and assumptions
The presentation of the financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets,
liabilities, income and expenses. Estimates and judgements are continually
evaluated and are based on perceived risks, historical experience,
expectations of plausible future events and other factors. Actual results may
differ from these estimates. The area requiring the most significant judgement
and estimation in the preparation of the financial statements is the
accounting through the Income Statement of the parent contribution to UIL
Finance to enable UIL Finance to repay the ZDP shareholders on each repayment
date. The parent's contribution towards the issue cost of the ZDP shares and
redemption proceeds has been treated through the Income Statement and
recognised over the life of the loan as UIL Finance provides financing
services to UIL Limited and in return is due to receive reimbursement of any
costs and expense as and when they fall due. The policy for interest income,
including the allocation and recognition of the parent contributions, is set
out in note 1(e) to the accounts.
2. Income
2025 2024
£'000s £'000s
Interest income 4,086 5,051
Other income 251 342
4,337 5,393
3. Finance costs
2025 2024
£'000s £'000s
ZDP shares 4,337 5,393
4. Taxation
The profits for the year (and 2024) are not subject to any taxation. The
Company is not in scope for Bermuda Corporate Income Tax Act 2023.
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
5. Earnings per share
The calculation of earnings per share is based on a result after tax for the
period of £nil (2024: £nil) and a weighted average number of 10 ordinary
shares in issue during the year (2024: 10 ordinary shares in issue during the
year).
6. Dividends
There were no dividends paid or declared in respect of the year (2024: nil).
7. Other receivables
2025 2024
£'000s £'000s
Loan to parent company - UIL Limited
- Receivable within one year - 40,778
- Receivable after more than one year 66,447 62,837
66,447 103,615
The loan is repayable on the date the underlying ZDP shares are redeemed.
8. Zero dividend preference shares
30 June 30 June
2025 2024
£'000s £'000s
ZDP shares - current liabilities
2024 ZDP shares - 40,778
ZDP shares - non-current liabilities
2026 ZDP shares 35,395 33,635
2028 ZDP shares 31,052 29,202
66,447 62,837
Total ZDP shares liabilities 66,447 103,615
Authorised ZDP shares of the Company as at 30 June 2025 and 30 June 2024 are
as follows:
Number £'000s
2022 ZDP shares of 5.3180p each 63,686,754 3,387
2024 ZDP shares of 3.8025p each 76,717,291 2,917
2026 ZDP shares of 10p each 25,000,000 2,500
2028 ZDP shares of 3.8676p each 44,842,717 1,734
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
8. Zero dividend preference shares (continued)
ZDP shares issued by the Company are as follows:
Year to 30 June 2025
Balance as at 30 June 2024 Redemption of ZDP shares Finance costs Balance as at
30 June 2025
2024 Number 30,000,000 (30,000,000) - -
£'000s 40,778 (41,505) 727 -
2026 Number 25,000,000 - - 25,000,000
£'000s 33,635 - 1,760 35,395
2028 Number 25,000,000 - - 25,000,000
£'000s 29,202 - 1,850 31,052
Total £'000s 103,615 (41,505) 4,337 66,447
Year to 30 June 2024
Balance as at 30 June 2023 Finance costs Balance as at
30 June 2024
2024 Number 30,000,000 - 30,000,000
£'000s 38,765 2,013 40,778
2026 Number 25,000,000 - 25,000,000
£'000s 31,979 1,656 33,635
2028 Number 25,000,000 - 25,000,000
£'000s 27,478 1,724 29,202
Total £'000s 98,222 5,393 103,615
On 31 October 2024 the 30,000,000 2024 ZDP shares that were in issue were
redeemed at 138.35p per 2024 ZDP share.
UIL Limited held 2,309,620 2026 ZDP shares as at 30 June 2025 and 30 June
2024.
UIL Limited held 583,735 2028 ZDP shares as at 30 June 2024. In the year UIL
Limited purchased 195,000 2028 ZDP shares in the open market, paying £0.2m.
UIL Limited held 778,735 2028 ZDP shares as at 30 June 2025.
2026 ZDP shares
Based on the initial entitlement of a 2026 ZDP share of 100p on 26 April 2018,
a 2026 ZDP share will have a final capital entitlement at the end of its life
on 31 October 2026 of 151.50p equating to a 5.00% per annum gross redemption
yield. The capital entitlement (excluding issue costs) per 2026 ZDP share as
at 30 June 2025 was 141.95p (2024: 135.15p).
2028 ZDP shares
Based on the initial entitlement of a 2028 ZDP share of 100p on 23 April 2021,
a 2028 ZDP share will have a final capital entitlement at the end of its life
on 31 October 2028 of 152.29p equating to a 5.75% per annum gross redemption
yield. The capital entitlement (excluding issue costs) per 2028 ZDP share as
at 30 June 2025 was 126.39p (2024: 119.49p).
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
8. Zero dividend preference shares (continued)
The ZDP shares are listed in the Non-equity shares and non-voting equity
shares category 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.
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 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 2026 ZDP
shares shall rank in priority to the 2028 ZDP shares in relation to the
repayment of their accrued capital entitlement as at the date of liquidation.
The entitlement of ZDP Shareholders of a particular class shall be determined
in proportion to their holdings of ZDP shares of that class.
The redemption of the ZDP shares of £41,505,000 (2024: £nil) and finance
costs of £4,337,000 (2024: £5,393,000) were settled through the loan to the
parent company.
9. Ordinary share capital
Number £
Authorised
Ordinary shares of 10p each 10 1
Issued and nil paid
Balance as at 30 June 2025 and 30 June 2024 10 -
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 £nil (30 June 2024: £nil) based on 10
shares in issue.
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
10. 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 Company's ultimate parent undertaking is
Somers Isles Private Trust Company Limited ("SIPTCL"), a company incorporated
in Bermuda and owned by Mr Duncan Saville.
11. Related party transactions
UIL Limited, SIPTCL, General Provincial Life Pension Fund Limited which holds
78.8% of UIL Limited shares and is ultimately controlled by SIPTCL and the
Board of the Company are considered related parties. Amounts owing from
related parties are disclosed in the financial statements in note 7, ZDP
shares issued to UIL Limited are disclosed in note 8 and interest from related
parties is disclosed in note 2.
12. 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
funds to its parent company and therefore no segmental reporting is provided.
13. 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 Statement of Financial
Position 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 IFRSs and best practice and
include the valuation of financial assets at fair value and the ZDP shares and
the inter-company loan 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
30 June 2025 £'000s £'000s £'000s
Exposure to fixed rates
Zero dividend preference shares (66,447) - (66,447)
Loan to parent company - UIL Limited 66,447 - 66,447
Net exposures
At year end - - -
Maximum in year - - -
Minimum in year - - -
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
13. Financial Risk Management (continued)
Within More than
Total one year one year
30 June 2024 £'000s £'000s £'000s
Exposure to fixed rates
Zero dividend preference shares (103,615) (40,778) (62,837)
Loan to parent company - UIL Limited 103,615 40,778 62,837
Net exposures
At year end - - -
Maximum in year - - -
Minimum in year - - -
Credit Risk exposure
The Company's financial asset is the loan from UIL Limited, repayable so as to
enable the Company to pay the final capital entitlement of each class of ZDP
share on their respective redemption date. 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, monitoring UIL Limited's gross assets coverage of the ZDP
shares liabilities.
2026 ZDP shares
Based on their final entitlement of 151.50p per share, the final entitlement
of the 2026 ZDP shares was covered 4.40 times by UIL Limited's gross assets as
at 30 June 2025. Should gross assets fall by 77.3% over the remaining life of
the 2026 ZDP shares, then the 2026 ZDP shares would not receive their final
entitlements in full. Should gross assets fall by 92.3%, equivalent to an
annual fall of 85.3%, the 2026 ZDP shares would receive no payment at the end
of their life.
2028 ZDP shares
Based on their final entitlement of 152.29p per share, the final entitlement
of the 2028 ZDP shares was covered 2.64 times by UIL Limited's gross assets as
at 30 June 2025. Should gross assets fall by 62.2% over the remaining life of
the 2028 ZDP shares, then the 2028 ZDP shares would not receive their final
entitlements in full. Should gross assets fall by 77.3%, equivalent to an
annual fall of 35.8%, the 2028 ZDP shares would receive no payment at the end
of their life.
None of the Company's financial assets is past due or impaired.
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
13. 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 Statement of Financial Position at fair value
except for the ZDP shares and the inter-company loan which are carried at
amortised cost using effective interest method in accordance with IFRS 9, or
at a reasonable approximation thereof.
The fair values of the ZDP shares based on their quoted market value as at 30
June were:
2025 2024
£'000s £'000s
2024 ZDP shares - 39,900
2026 ZDP shares 34,250 29,750
2028 ZDP shares 29,500 24,500
The fair value of the inter-company loan is £63,750,000 (2024: £94,150,000).
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. This is dependent on the asset performance of the parent company. At
30 June 2025, the parent company had net assets of £166,382,000 (2024:
£136,927,000) after providing for amounts due to ZDP shareholders.
14. Going Concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing the accounts as the Company can continue to operate due to the
contractual obligation of the parent company to ensure that UIL Finance is
able to redeem the ZDP shares on each repayment date and the Directors are
comfortable that the parent company has the financial resources to do so.
The Board considered the parent company's going concern assessment which
focussed on the forecast liquidity of the Group for 12 months from the date of
approval of the financial statements. This analysis assumes that the parent
company will meet some of its short term obligations through the sale of
listed securities, which represented 17.6% of the parent company's total
portfolio as at 30 June 2025. As part of this assessment the board of the
parent Company has considered a severe but plausible downside that reflects
the impact of the key risks set out in the Strategic Report and an assessment
of the parent company's ability to meet its liabilities as they fall due
(including the loan liabilities), assuming a significant reduction in asset
values and accompanying currency volatility.
The severe but plausible downside assumes a significant reduction in asset
values in line with that experienced during the emergence of the COVID 19
pandemic in the first quarter of 2020. The parent company board also
considered reverse stress testing to identify the reduction in the valuation
of liquid investments that would cause the Group to be unable to meet its net
current liabilities, being primarily the loan of £19,525,000. The parent
company board is confident that the reduction in asset values implied by the
reverse stress test is not plausible even in the current volatile environment.
Consequently, the Directors are confident that the Company will have
sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial statements.
Accordingly, the Board considers it appropriate to continue to adopt the going
concern basis in preparing the accounts.
UIL Finance Limited
NOTES TO THE ACCOUNTS (CONTINUED)
15. Events after the end of the reporting period
There were no material events after the end of the reporting period.
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