REG - UIL Finance Ltd UIL Limited Utilico Limited 2014 UIL Finance - UTLG - Half-year Report
UIL Finance Limited
HALF-YEARLY REPORT
FOR THE SIX MONTHS TO 31 DECEMBER 2018
UIL Finance Limited
HALF-YEARLY REPORT
for the six months to 31 December 2018
Contents
Page
Company Directory
2
Strategic Review
3
Report of the Directors
4
Statement of Directors' Responsibilities
6
Unaudited Condensed Income Statement
7
Unaudited Condensed Statement of Financial Position
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
Legal Entity Identifier
213800JPJWZ5P3QJX538
Auditor
KPMG LLP
15 Canada Square
Canary Wharf
London E14 5GL
United Kingdom
Date of Formation
17 January 2007
Nature of Business
Closed end investment 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 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 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 ("ICM"). ICM was appointed as company secretary with effect from 1 July 2017.
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 2018, the parent company had net assets of £264,763,000 (31 December 2017: £240,001,000 and 30 June 2018: £261,134,000) 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 19 February 2019.
ICM Limited
Company Secretary
19 February 2019
UIL Finance Limited
REPORT OF THE DIRECTORS
The Directors present their report and accounts of the Company for the six months ended 31 December 2018.
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 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 2018.
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 2018, no Director had any interest in the Company's shares (31 December 2017: none and 30 June 2018: none). No Director acquired or disposed of any interest in the shares in the Company during the period or since the period end.
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.
Zero dividend preference shares
Full details of the changes to the Company's authorised and issued zero dividend preference shares during the period can be found in note 7 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 8 to the accounts.
Auditor
KPMG LLP ("KPMG") was the Company's auditor for the year ended 30 June 2018 and was re-appointed as auditor to the Company at the AGM of the Company on 21 November 2018.
By order of the Board
ICM Limited
Company Secretary
19 February 2019
UIL Finance Limited
Statement of directors' responsibilities in respect of the HALF-YEARly financial Report
We confirm to the best of our knowledge:
• the condensed set of financial statements contained within the report for the six months to 31 December 2018 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; and
• The half-yearly 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
19 February 2019
UIL Finance Limited
UNAUDITED CONDENSED INCOME STATEMENT
Six months to
Six months to
Year to
31 December
31 December
30 June
2018
2017
2018
Note
£'000s
£'000s
£'000s
Interest income
2
7,107
6,206
12,821
Total income
7,107
6,206
12,821
Other expenses
-
-
-
Profit before finance costs and taxation
7,107
6,206
12,821
Finance costs
3
(7,107)
(6,206)
(12,821)
Profit before taxation
-
-
-
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 STATEMENT OF FINANCIAL POSITION
As at
31 December
31 December
30 June
2018
2017
2018
Note
£'000s
£'000s
£'000s
Non-current assets
Other receivables
6
167,590
-
-
Current assets
Other receivables
6
-
202,727
233,919
Current liabilities
Zero dividend preference shares
7
-
(49,482)
(51,266)
Total assets less current liabilities
167,590
153,245
182,653
Non-current liabilities
Zero dividend preference shares
7
(167,590)
(153,245)
(182,653)
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 2018
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.
In the current financial period the Company has applied IFRS 9 Financial Instruments (as revised in July 2014) and the related consequential amendments to other IFRSs. IFRS 9 introduces new requirements for the classification and measurement of financial assets and financial liabilities, impairment for financial assets and general hedge accounting. The Company measures the receivables of the loan to parent company and financial liabilities of Zero Dividend Preference ("ZDP") shares at amortised cost under IAS 39 and they will continue to be measured at amortised cost under IFRS 9, there are no impaired assets and does not enter into general hedge accounting. The inter company loan agreement has been reviewed and clarified to be in line with IFRS 9 requirements. There is no material impact in relation to the adoption of this standard.
(b) Zero dividend preference shares
The ZDP shares, due to be redeemed on 31 October 2020, 2022, 2024 and 2026, at a redemption value of 154.90 pence per share, 146.99 pence per share, 138.35 pence per share and 151.50 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 proceeds of the Company's ZDP share capital were raised in pounds sterling, and have 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 to
Six months to
Year to
31 December
31 December
30 June
2018
2017
2018
£'000s
£'000s
£'000s
Loan to parent company - interest receivable
7,107
6,206
12,821
3 Finance costs
Six months to
Six months to
Year to
31 December
31 December
30 June
2018
2017
2018
£'000s
£'000s
£'000s
ZDP shares
7,107
6,206
12,821
4. Earnings per share
The calculation of earnings per share is based on a profit after tax for the period of £nil (for the periods to 31 December 2017 and 30 June 2018: £nil) and a weighted average number of 10 ordinary shares in issue during the period (for the periods 31 December 2017 and 30 June 2018: 10 ordinary shares in issue).
5. Dividends
There were no dividends paid or declared in respect of the period (for the periods to 31 December 2017 and 30 June 2018: £nil).
6. Other receivables
31 December
31 December
30 June
2018
2017
2018
£'000s
£'000s
£'000s
Loan to parent company - UIL Limited
- Receivable within one year
-
202,727
233,919
- Receivable after more than one year
167,590
-
-
167,590
202,727
233,919
The loan is repayable on the date the underlying ZDP shares are redeemed.
UIL Finance Limited
UNAUDITED CONDENSED NOTES TO THE ACCOUNTS (CONTINUED)
7. Zero dividend preference shares
31 December
31 December
30 June
2018
2017
2018
£'000s
£'000s
£'000s
ZDP shares - current liabilities
2018 ZDP shares
-
49,482
51,266
ZDP shares - non-current liabilities
2020 ZDP shares
53,655
50,308
51,940
2022 ZDP shares
57,681
54,149
55,873
2024 ZDP shares
30,799
48,788
50,027
2026 ZDP shares
25,455
-
24,813
167,590
153,245
182,653
Total ZDP shares liabilities
167,590
202,727
233,919
Authorised ZDP shares of the Company at 31 December 2018 and 30 June 2018 were as follows:
Number
£'000s
2018 ZDP shares of 5.9319p each
53,072,561
3,148
2020 ZDP shares of 6.0514p each
50,000,000
3,026
2022 ZDP shares of 5.3180p each
78,117,685
4,154
2024 ZDP shares of 3.8025p each
76,717,291
2,917
2026 ZDP shares of 10p each
25,000,000
2,500
ZDP shares issued by the Company are as follows:
Six months to 31 December 2018
Balance at
30 June 2018
Redemption/
cancellation of ZDP shares
Finance costs
Balance at
31 December 2018
2018
Number
32,716,029
(32,716,029)
-
-
£'000s
51,266
(52,516)
1,250
-
2020
Number
39,000,000
-
-
39,000,000
£'000s
51,940
-
1,715
53,655
2022
Number
50,000,000
-
-
50,000,000
£'000s
55,873
-
1,808
57,681
2024
Number
50,000,000
(20,000,000)
-
30,000,000
£'000s
50,027
(20,920)
1,692
30,799
2026
Number
25,000,000
-
-
25,000,000
£'000s
24,813
-
642
25,455
Total
£'000s
233,919
(73,436)
7,107
167,590
UIL Finance Limited
UNAUDITED CONDENSED NOTES TO THE ACCOUNTS (CONTINUED)
7. Zero dividend preference shares (continued)
Six months to 31 December 2017
Balance at
30 June 2017
Issue of ZDP shares
Issue costs of ZDP shares
Conversion of 2018 ZDP shares
Finance costs
Balance at
31 December 2017
2018
Number
49,842,413
-
-
(17,126,384)
-
32,716,029
£'000s
72,622
-
-
(25,644)
2,504
49,482
2020
Number
39,000,000
-
-
-
-
39,000,000
£'000s
48,704
-
-
-
1,604
50,308
2022
Number
50,000,000
-
-
-
-
50,000,000
£'000s
52,452
-
-
-
1,697
54,149
2024
Number
-
50,000,000
-
-
-
50,000,000
£'000s
-
50,000
(1,613)
-
401
48,788
Total
£'000s
173,778
50,000
(1,613)
(25,644)
6,206
202,727
Year to 30 June 2018
Balance at
30 June 2017
Issue of ZDP shares
Issue costs of ZDP shares
Conversion of 2018 ZDP shares
Finance costs
Balance at
30 June 2018
2018
Number
49,842,413
-
-
(17,126,384)
-
32,716,029
£'000s
72,622
-
-
(25,644)
4,288
51,266
2020
Number
39,000,000
-
-
-
-
39,000,000
£'000s
48,704
-
-
-
3,236
51,940
2022
Number
50,000,000
-
-
-
-
50,000,000
£'000s
52,452
-
-
-
3,421
55,873
2024
Number
-
50,000,000
-
-
-
50,000,000
£'000s
-
50,000
(1,626)
-
1,653
50,027
2026
Number
-
25,000,000
-
-
-
25,000,000
£'000s
-
25,000
(410)
-
223
24,813
Total
£'000s
173,778
75,000
(2,036)
(25,644)
12,821
233,919
UIL Limited held 260,760 2018 ZDP shares at 30 June 2018. In the period UIL Limited purchased a further 562,804 2018 ZDP shares in the open market. On 22 October 2018 the Company cancelled all the 2018 ZDP shares held by UIL Limited in consideration for the Company releasing UIL Limited from its obligation under the subscription agreement to fund the redemption of such 2018 ZDP Shares. On 31 October 2018 the remaining 31,892,465 2018 ZDP shares that were in issue were redeemed at 160.52p per 2018 ZDP share.
UIL Limited held 20,000,000 2024 ZDP shares at 30 June 2018. On 22 October 2018 the Company cancelled all the 2024 ZDP shares held by UIL Limited in consideration for the Company releasing UIL Limited from its obligation under the subscription agreement to fund the redemption of such 2024 ZDP Shares.
UIL Limited held 13,420,535 2026 ZDP shares at 30 June 2018 and 31 December 2018.
UIL Finance Limited
UNAUDITED CONDENSED NOTES TO THE ACCOUNTS (CONTINUED)
7. Zero dividend preference shares (continued)
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 as at 31 December 2018 was 136.25p (31 December 2017: 127.04p and 30 June 2018: 131.52p).
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 as at 31 December 2018 was 116.52p (31 December 2017: 109.67p and 30 June 2018: 113.10p).
2024 ZDP shares
Based on the initial entitlement of a 2024 ZDP share of 100p on 2 November 2017, a 2024 ZDP share will have a final capital entitlement at the end of its life on 31 October 2024 of 138.35p equating to a 4.75% per annum gross redemption yield. The capital entitlement (excluding issue costs) per 2024 ZDP share as at 31 December 2018 was 105.54p (31 December 2017: not applicable and 30 June 2018: 103.10p).
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 151.10p equating to a 5.00% per annum gross redemption yield. The capital entitlement (excluding issue costs) per 2026 ZDP share as at 31 December 2018 was 103.38p (31 December 2017: not applicable and 30 June 2018: 100.87p).
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.
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.
UIL Finance Limited
UNAUDITED CONDENSED NOTES TO THE ACCOUNTS (CONTINUED)
7. Zero dividend preference shares (continued)
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 2020 ZDP shares shall rank in priority to the 2022 ZDP shares, the 2024 ZDP shares and the 2026 ZDP shares;
(ii) the 2022 ZDP shares shall rank in priority to the 2024 ZDP shares and the 2026 ZDP shares; and
(iii) the 2024 ZDP shares shall rank in priority to the 2026 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
£
Authorised
Ordinary shares of 10p each
10
1
Issued and nil paid
Balance at 31 December 2018, 31 December 2017
and 30 June 2018
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 (31 December 2017: nil and 30 June 2018: £nil) 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, from 26 June 2018 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 (prior to 26 June 2018, the Group's ultimate parent undertaking was General Provincial Life Pension Fund Limited ("GPLPF") which is incorporated in Bermuda).
10. Related party transactions
UIL Limited, GPLPFL, SIPTCL 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.
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.
UIL Finance Limited
UNAUDITED CONDENSED NOTES TO THE ACCOUNTS (CONTINUED)
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 2018
£'000s
£'000s
£'000s
Exposure to fixed rates
ZDP shares
(167,590)
-
(167,590)
Intra-group loan
167,590
167,950
-
Net exposures
At period end
-
167,950
(167,590)
Maximum in period
-
185,308
(185,308)
Minimum in period
-
165,953
(165,953)
Within
More than
Total
one year
one year
31 December 2017
£'000s
£'000s
£'000s
Exposure to fixed rates
ZDP shares
(202,727)
(49,482)
(153,245)
Intra-group loan
202,727
202,727
-
Net exposures
At period end
-
153,245
(153,245)
Maximum in period
-
177,768
(177,768)
Minimum in period
-
151,880
(151,880)
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 2018
£'000s
£'000s
£'000s
Exposure to fixed rates
ZDP shares
(233,919)
(51,266)
(182,653)
Intra-group loan
233,919
233,919
-
Net exposures
At period end
-
182,653
(182,653)
Maximum in period
-
182,653
(182,653)
Minimum in period
-
152,452
(152,452)
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.
2020 ZDP shares
Based on their final entitlement of 154.90p per share, the final entitlement of the 2020 ZDP shares were covered 4.32 times by UIL Limited's gross assets on 31 December 2018. Should gross assets fall by 76.9% 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 89.3%, equivalent to an annual fall of 70.4%, 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 2.61 times by UIL Limited's gross assets on 31 December 2018. Should gross assets fall by 61.7% 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 76.9%, equivalent to an annual fall of 31.7%, the 2022 ZDP shares would receive no payment at the end of their life.
2024 ZDP shares
Based on their final entitlement of 138.35p per share, the final entitlement of the 2024 ZDP shares were covered 2.13 times by UIL Limited's gross assets on 31 December 2018. Should gross assets fall by 53.1% over the remaining life of the 2024 ZDP shares, then the 2024 ZDP shares would not receive their final entitlements in full. Should gross assets fall by 61.7%, equivalent to an annual fall of 15.2%, the 2024 ZDP shares would receive no payment at the end of their life.
2026 ZDP shares
Based on their final entitlement of 151.50p per share, the final entitlement of the 2026 ZDP shares were covered 1.83 times by UIL Limited's gross assets on 30 June 2018. Should gross assets fall by 45.3% 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 53.1%, equivalent to an annual fall of 9.2%, the 2026 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.
The fair values of the ZDP shares based on their quoted market value were:
31 December
31 December
30 June
2018
2017
2018
£'000s
£'000s
£'000s
2018 ZDP shares
-
51,488
52,182
2020 ZDP shares
57,330
52,063
55,575
2022 ZDP shares
64,250
62,250
62,250
2024 ZDP shares
32,550
52,625
53,750
2026 ZDP shares
26,000
-
25,563
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 that it is appropriate to adopt the going concern basis in preparing the accounts as the Company can continue to operate due to the support of the parent company.
14. Results
The condensed set of financial statements, forming the half-yearly accounts, has been neither audited nor reviewed by the Company's auditor. The latest published accounts are for the year ended 30 June 2018; the report of the auditor thereon was unqualified. The condensed financial statements shown above for the year ended 30 June 2018 are an extract from those accounts and are not the Company's statutory financial statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR UKRARKNAUAAR
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