RNS Number : 5732A
Utilico Finance Limited
20 February 2014
 



                                                                         

Utilico Finance Limited

                                                               

Report and accounts for the six months to 31 December 2013

 

 



 

Utilico Finance Limited                                                                    

                                                                                                                                          

Report and accounts                                                                                                  

for the six months to 31 December 2013                                                               

                                                                                                                            

Contents                                                                                                              

Page

                                                                                                                           

 

                                                                                                                           

 

Company Directory

2

                                                                                                                           

 

                                                                                                                           

 

Directors' Report

3

                                                                                                                           

 

                                                                                                                           

 

Directors' Statement of Responsibilities

5

                                                                                                                           

 

                                                                                                                           

 

Unaudited Condensed Statement of Comprehensive Income

6

                                                                                                                           

 

                                                                                                                           

 

Unaudited Condensed Balance Sheet

7

                                                                                                                           

 

                                                                                                                           

 

Notes to the Accounts

8

 

 

 

 

 

 

 

 

                                                                                                                            

 



 

Utilico Finance Limited


 

 

Company Directory






 

 

Registered Office

Trinity Hall

 

43 Cedar Avenue

 

Hamilton HM 12

 

Bermuda

 

 

 

 

Directors

Dr Roger J Urwin, CBE (Chairman)

 

Peter I Burrows, AO

 

J. Michael Collier

 

Susan Hansen (resigned 17 September 2013)

 

Warren McLeland (appointed 17 September 2013)

 

Eric St C Stobart

 

 

Company Number

39479

 

 

 

 

Auditor

KPMG LLP

 

15 Canada Square

Canary Wharf

London E14 5GL

 

 

 

Date of Formation

17 January 2007

 

 

 

 

Nature of Business

Closed end investment company

 

 

 

 

Ordinary Shareholder and Parent Company

Utilico Investments Limited

 

 

 



Utilico Finance Limited

 

Directors' Report

 

Principal activity and status

Utilico 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.

 

Results and Dividends

The results for the period are set out in the attached accounts.

 

The Company is unable to declare a dividend in respect of the period ended 31 December 2013 as there is no profit to distribute.

 

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, Utilico Investments Limited. 

 

Regulatory and Competitive Environment

The Company is obliged to comply with Bermuda law, the rules of the UK Listing 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.

 

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.

 

Principal Risks

The principal underlying risk of the Company continues to relate to its ability to repay the ZDP shares in October 2014, October 2016 and October 2018. This is dependent on the asset performance of the parent company. At 31 December 2013, the parent company had net assets of £147,610,000 (31 December 2012: £230,060,000 and 30 June 2013: £147,080,000) 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 breach of Bermuda law could lead to financial penalties or a qualified audit report.  The Company's assistant secretary, BCB Charter Corporate Services Limited, and its legal adviser in Bermuda, Appleby (Bermuda) Limited, use all reasonable efforts to ensure that the Company adheres to Bermuda law.

 

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.

 



Directors' Report (continued)

 

Auditor

KPMG Audit Plc ("KPMG") was the Company's auditor for the year ended 30 June 2013.

 

Following the instigation of an orderly wind down of business, KPMG Audit Plc resigned as auditor. KPMG LLP was appointed as auditor at the AGM held in November 2013.

 

Directors' Disclosures

At 31 December 2013, no Director had any interest in the Company's shares.  No other Director acquired or disposed of any interest in the shares in the Company during the period or since the period end.

 

The following Directors held office throughout the period:

 

Dr Roger Urwin (Chairman)

Peter Burrows

J. Michael Collier

Eric Stobart

 

Mrs Susan Hansen stood down as a Director of the Company on 17 September 2013 and Mr Warren McLeland was appointed in her place on the same date.

 

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.

 

Directors' Remuneration

No Director received or is entitled to receive any remuneration from 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.

 

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.

 

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.

 

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 Utilico Investments Limited

Ordinary shares of Utilico Investments Limited rank behind the ZDP shares on a winding up of the Company and Utilico Investments Limited, together referred to as the Group (save for any undistributed revenue reserves of Utilico Investments Limited on a winding up).

 

 

 

By order of the Board

ICM Limited, Secretary

20 February 2014

 

Utilico Finance Limited

 

DIRECTORS' STATEMENT OF RESPONSIBILITIES

 

The Directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable Bermuda law and IFRS, as adopted by the European Union.

 

The Directors must not approve the Company's 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 and loss of the Company for that period. In preparing these financial statements, the Directors are required to:

 

• select suitable accounting policies and then apply them consistently;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• make judgements and estimates that are reasonable and prudent;

• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance;

• state that the Company has complied with IFRS, subject to any material departures disclosed and explained in the financial statements; and

• prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping proper accounting records which 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 the financial statements comply with IFRS.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

 

To the best of the knowledge of the Directors:

 

a) the financial statements within this Report in relation to which this statement forms part have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company; and

 

b) the Directors' Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.

 

 

Approved by the Board on 20 February 2014 and signed on its behalf by:

 

 

Dr R J Urwin

Chairman

 



 

Utilico Finance Limited

 

 

Unaudited Condensed Statement of Comprehensive Income

 


 


Six months to

Six months to

Year to

 

 

 

31 December

31 December

30 June

 

 

 

2013

2012

2013

 

 

Note

£'000s

£'000s

£'000s

 

 


 

 

 

Interest income

 

2

7,124

7,565

14,333

Total income

 


7,124

7,565

14,333

Other expenses

 


-

-

-

Profit before finance costs and taxation


7,124

7,565

14,333

Finance costs

 

3

(7,124)

(7,565)

(14,333)

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.

 


 

 

 

 

 



 

 

Utilico Finance Limited

 

 

 

 


 

 

 

 

Unaudited Condensed Balance Sheet

 

 

 

 



31 December

31 December

30 June



2013

2012

2013


Note

£'000s

£'000s

£'000s



 

 

 

Current assets


 

 

 

Other receivables

6

206,908

193,017

199,784

Current liabilities


 

 

 

Zero dividend preference shares

7

(75,235)

-

-

Total assets less current liabilities


131,673

193,017

199,784

Non-current liabilities


 

 

 

Zero dividend preference shares

7

(131,673)

(193,017)

(199,784)

Net assets


-

-  

-  

 


 

 

 

Equity attributable to equity holders


 

 

 

Ordinary share capital

8

-

-  

-  

 


 

 

 

 


 

 

 



 

Utilico Finance Limited

 

Notes to the Accounts

for the period to 31 December 2013

 

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.

 

The financial statements have been prepared on a historical cost basis.

 

A Statement of Changes in Equity has not been presented as there is no movement in the current or prior period.

 

(b) Zero dividend preference shares

The ZDP shares, due to be redeemed on 31 October 2014, 2016 and 2018, at a redemption value of 167.60 pence per share, 192.78 pence per share and 160.52 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 periods 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.

 

(h) Intra company loan

Utilico Investments 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.



 

 

Utilico Finance Limited                                                                                                                               

                                                                                                                                                                                           

Notes to the Accounts (continued)

 

 

2      Interest income                                                                                                                                                                  

                                                                                        


Six months to

Six months to

Year to


31 December

31 December

30 June


2013

2012

2013


£'000s

£'000s

£'000s

Loan to parent company - interest receivable

7,124

7,565

14,333

 

 

 

 

3      Finance costs

                     

 


Six months to

Six months to

Year to


31 December

31 December

30 June


2013

2012

2013


£'000s

£'000s

£'000s

ZDP shares

7,124

7,565

14,333

 

 

                                                                                                                                                                          

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 2012 and 30 June 2013: £nil) and a weighted average number of 10 ordinary shares in issue during the period (for the periods 31 December 2012 and 30 June 2013: 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


2013

2012

2013


£'000s

£'000s

£'000s

Loan to parent company - Utilico Investments Limited   

206,908

193,017

199,784

 

The loan is repayable on demand.

 

 

 

 

 



Utilico Finance Limited                                                                                                                               

                                                                                                                                                                            

Notes to the Accounts (continued)

 

7.     Zero dividend preference shares                                                                                        

 

 

 

 

31 December

31 December

30 June

 

2013

2012

2013


£'000s

£'000s

£'000s

ZDP shares - current liabilities


 

 

2014 ZDP shares   

75,235

-

-

ZDP shares - non-current liabilities

 

 

 

2014 ZDP shares   

-

70,300

72,705

2016 ZDP shares   

75,307

70,289

72,734

2018 ZDP shares   

56,366

52,428

54,345

 

131,673

193,017

199,784

Total ZDP shares liabilities

206,908

193,017

199,784

 

ZDP shares issued by the Company are as follows:

 

                                                                                                                                                                              



2014

2016

2018

Total

31 December 2013

Number

£'000s

Number

£'000s

£'000s

£'000s

Authorised










ZDP shares of 10p each

50,000,000

5,000

50,000,000

 5,000



n/a

ZDP shares of 5.9319p each





49,842,413

2,956

n/a

Issued










Balance at 30 June 2013

47,500,000

 

72,705

 

47,500,000

 

72,734

49,842,413

54,345

 

199,784

Finance costs

-

2,530

-

2,573

 

-

2,021

7,124

Balance at

31 December 2013

 

47,500,000

 

75,235

 

47,500,000

 

75,307

49,842,413

56,366

 

206,908

 

 



 

 

Utilico Finance Limited                                                       

                                                                    

Notes to the Accounts (continued)

 

7.            Zero dividend preference shares (continued)

 


2012

2014

2016

2018

Total

31 December 2012

Number

£'000s

Number

£'000s

Number

£'000s

Number

£'000s

£'000s

Authorised










ZDP shares of 10p each

 

60,592,190

 

6,059

 

50,000,000

 

5,000

 

50,000,000

 

5,000

 

 

 

 

 

n/a

ZDP shares of 5.9319p each

 

 






 

49,842,413

 

2,956

 

n/a

Issued










Balance at   30 June 2012

 

39,342,809

 

68,269

 

47,500,000

 

67,938

 

47,500,000

 

67,888

22,250,000

22,295

 

226,390

Issue of ZDP shares

-

-

-

-

-

-

27,592,413

29,074

29,074

Issue costs of ZDP shares

-

-

-

-

-

-

-

(171)

(171)

Redemption of 2012 ZDP shares

(39,342,809)

(69,841)

-

-

-

-

-

-

(69,841)

Finance costs

-

1,572

-

2,362

-

2,401

 

-

1,230

7,565

Balance at

31 December 2012

 

-

 

-

 

47,500,000

 

70,300

 

47,500,000

 

70,289

49,842,413

52,428

 

193,017

 

                                                                                                                                                                              


2012

2014

2016

2018

Total

30 June 2013

Number

£'000s

Number

£'000s

Number

£'000s

Number

£'000s

£'000s

Authorised










ZDP shares of 10p each

 

60,592,190

 

6,059

 

50,000,000

 

5,000

 

50,000,000

 

5,000

 

 

 

 

 

n/a

ZDP shares of 5.9319p each

 

 






 

49,842,413

 

2,956

 

n/a

Issued










Balance at   30 June 2012

 

39,342,809

 

68,269

 

47,500,000

 

67,938

 

47,500,000

 

67,888

22,250,000

22,295

 

226,390

Issue of ZDP shares

-

-

-

-

-

-

27,592,413

29,074

29,074

Issue costs of ZDP shares

-

-

-

-

-

-

-

(171)

(171)

Redemption of 2012 ZDP shares

(39,342,809)

(69,842)

-

-

-

-

-

-

(69,842)

Finance costs

-

1,573

-

4,767

-

4,846

 

-

3,147

14,333

Balance at

30 June 2013

 

-

 

-

 

47,500,000

 

72,705

 

47,500,000

 

72,734

49,842,413

54,345

 

199,784

 

Pursuant to the supplementary prospectus relating to the "Proposed placing of new 2018 ZDP Shares" published by the Company on 28 September 2012 the Company issued 27,592,413 new 2018 ZDP shares at 105.37p per share raising £29.1m. The new 2018 ZDP shares were admitted to the Official List and to trading on the London Stock Exchange on 25 October 2012.



Utilico Finance Limited                                                       

                                                                    

Notes to the Accounts (continued)

 

7.     Zero dividend preference shares (continued)

 

 

2012 ZDP shares                                                                                                                                                                                     

The 2012 ZDP shares were redeemed on 31 October 2012 at 177.52p per share. They were issued by Utilico Investment Trust plc ("UIT") on 7 May 2004 and as part of the scheme of reconstruction implementing the proposals for the voluntary winding-up and reconstruction of UIT, each UIT ZDP shareholder received one ZDP share in the Company for every UIT ZDP share held on 8 June 2007. Based on the initial entitlement of a UIT ZDP share of 100p on 7 May 2004, the final capital entitlement at the end of a 2012 ZDP share life on 31 October 2012 of 177.52p equated to a 7 per cent. per annum gross redemption yield.        

 

2014 ZDP shares                                                                                                                                                                                     

Based on the initial entitlement of a 2014 ZDP share of 100p on 15 June 2007, a 2014 ZDP share will have a final capital entitlement at the end of its life on 31 October 2014 of 167.60p equating to a 7.25 per cent. per annum gross redemption yield. The capital entitlement (excluding issue costs) per 2014 ZDP share at 31 December 2013 was 158.12p (31 December 2012: 147.44p and 30 June 2013: 152.64p).

                                                                                                                                                                                                               

2016 ZDP shares                                                                                                                                                                                     

Based on the initial entitlement of a 2016 ZDP share of 100p on 15 June 2007, a 2016 ZDP share will have a final capital entitlement at the end of its life on 31 October 2016 of 192.78p equating to a 7.25 per cent. per annum gross redemption yield. The capital entitlement (excluding issue costs) per 2016 ZDP share at 31 December 2013 was 158.12p (31 December 2012: 147.44p and 30 June 2013: 152.64p).

                         

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 2013 was 114.46p (31 December 2012: 106.73p and 30 June 2013: 110.50p).

 

All the ZDP shares are listed 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 Utilico Investments Limited but in priority to the ordinary shares of the Company and Utilico Investments Limited save in respect of certain winding up revenue profits of Utilico Investments 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 1.5 times.

                                                                                                                                                                                                  

On a liquidation of Utilico Investments 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 2014 ZDP shares shall rank in priority to the 2016 ZDP Shares and the 2018 ZDP shares; and

(ii) the 2016 ZDP shares shall rank in priority to the 2018 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.                                                  



Utilico Finance Limited                                                                                                                               

                                                                                                                                                                                           

Notes to the Accounts (continued)

 

8.     Ordinary share capital                                                                                                                                                       

       

 

Number

£

Authorised

 

 

Ordinary shares of 10p each

     160,592,200

   16,059,220

Issued and nil paid

 

 

Balance at 31 December 2013, 31 December 2012

and 30 June 2013

 

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 2012: nil and 30 June 2013: £nil) based on 10 shares in issue.

                                                                                                                                                                                                  

9.     Parent company                                                                                                                                                                       

 

Utilico Investments 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 that is incorporated in Malaysia, holding 57.3% of the ordinary shares in Utilico Investments Limited.

 

10.   Related party transactions                                                                                                                                          

 

Utilico Investments 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 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.

 

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 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.

 



Utilico Finance Limited                                                                                                                               

                                                                                                                                                                            

Notes to the Accounts (continued)

 

12.   Financial Risk Management (continued)

 

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 2013

£'000s

£'000s

£'000s

Exposure to fixed rates

 

 

 

Zero dividend preference shares

(206,908)

(75,235)

(131,673)

Intra-group loan

206,908

206,908

 -

Net exposures




At period end

 -

131,673

(131,673)

Maximum in period

 -

204,853

(204,853)

Minimum in period

 -

130,620

(130,620)

 

 

 

 

Within

More than

 

Total

one year

one year

31 December 2012

£'000s

£'000s

£'000s

Exposure to fixed rates

 

 

 

Zero dividend preference shares

(193,017)

-

(193,017)

Intra-group loan

193,017

193,017

 -

Net exposures

 

 

 

At period end

 -

193,017

(193,017)

Maximum in period

 -

260,804

(260,804)

Minimum in period

 -

191,015

(191,015)

 

 

 

 

Within

More than

 

Total

one year

one year

30 June 2013

£'000s

£'000s

£'000s

Exposure to fixed rates

 

 

 

Zero dividend preference shares

(199,784)

-

(199,784)

Intra-group loan

199,784

199,784

 -

Net exposures

 

 

 

At period end

 -

199,784

(199,784)

Maximum in period

 -

260,804

(260,804)

Minimum in period

 -

191,015

(191,015)

 



 

 

Utilico Finance Limited                                                                                                                               

                                                                                                                                                                            

Notes to the Accounts (continued)

 

12.   Financial Risk Management (continued)

 

 

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.

 

2014 ZDP shares

Based on their final entitlement of 167.60p per share, the final entitlement of the 2014 ZDP shares were covered 3.13x times by Utilico Investments Limited's gross assets on 31 December 2013. Should gross assets fall by 68.1% over the remaining life of the 2014 ZDP shares, then the 2014 ZDP shares would not receive their final entitlements in full. Should gross assets fall by 100%, equivalent to an annual fall of 100%, the 2014 ZDP shares would receive no payment at the end of their life.

 

2016 ZDP shares

Based on their final entitlement of 192.78p per share, the final entitlement of the 2016 ZDP shares were covered 1.83x times by Utilico Investments Limited's gross assets on 31 December 2013. Should gross assets fall by 45.4% over the remaining life of the 2016 ZDP shares, then the 2016 ZDP shares would not receive their final entitlements in full. Should gross assets fall by 68.1%, equivalent to an annual fall of 33.2%, the 2016 ZDP shares would receive no payment at the end of their life.

 

2018 ZDP shares

Based on their final entitlement of 160.52p per share, the final entitlement of the 2018 ZDP shares were covered 1.34x by Utilico Investments Limited's gross assets on 31 December 2013. Should the gross assets falls by 25.5% 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 45.4%, equivalent to an annual fall of 11.8%, the 2018 ZDP shares would receive no payment at the end of their life.

 

None of the Company's financial liabilities is past due or impaired.

 

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 are:

 


31 December

31 December

30 June


2013

2012

2013


£'000s

£'000s

£'000s

2014 ZDP shares

76,950

                      74,813

75,288

2016 ZDP shares

80,631

                      76,653

78,613

2018 ZDP shares

58,316

                      55,325

56,511

 

 

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. 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 2013; the report of the auditor thereon was unqualified. The condensed financial statements shown above for the year ended 30 June 2013 are an extract from those accounts.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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