TIDMINLZ
RNS Number : 2310O
Inland ZDP PLC
08 February 2021
Inland ZDP PLC
8 February 2021
INLAND ZDP PLC
AUDITED RESULTS FOR YEARED 30 SEPTEMBER 2020
The board of Inland ZDP PLC (the "Company") announces the
results for the year ended 30 September 2020 and the publication of
its annual report.
Inland ZDP plc was incorporated on 22 November 2012 and has a
capital structure comprising unlisted ordinary shares and zero
dividend preference shares ('ZDP shares') listed on the Official
List and traded on the London Stock Exchange. The Company's
ordinary share capital is wholly owned by Inland Homes 2013 Limited
which is a wholly owned subsidiary of Inland Homes plc ('Inland'),
which has a principal activity of acquiring residential and
mixed-use sites and seeking planning consent for development.
Inland develops a number of the plots for private sale and sells
consented plots to housebuilders.
Following the publication of a prospectus on 14 December 2012
and issue of 8,500,000 ZDP shares at 100p per share there has been
a series of further placings of new ZDP Shares in successive years
resulting in there being 18,101,857 ZDP shares in issue as at 30
September 2020 (30 September 2019: 16,430,790 ZDP shares).
1,671,067 new ZDP shares were issued during the year ended 30
September 2020. The proceeds of the ZDP share issues totaling
GBP2.7m were lent to Inland Homes 2013 Limited for use in future
investment opportunities.
Pursuant to a loan agreement between the Company and Inland, the
Company has lent Inland the gross proceeds of its placings and all
issue costs were borne by Inland to pursue future opportunities.
This loan is on terms requiring its repayment by Inland to the
Company on the ZDP shares repayment date when the Company must be
wound up. The ZDP repayment date was initially 10 April 2019, but
this was extended by five years to 10 April 2024 by the passing of
resolutions at general and class meetings on 13 August 2018.
Key performance indicators
The key performance indicators used by the board to measure the
Company's success are the cover ratio (which is described in detail
in the Chairman's statement), the accrued capital entitlement and
the price of the ZDP shares.
30 September 30
2020 September
2019
Asset value per ZDP share 167.30p 159.42p
Accrued capital entitlement per ZDP Share 166.81p 159.12p
ZDP share price 156.00p 161.50p
------------------------------------------- ------------- -----------
The asset value and the accrued capital entitlement will
continue to increase as the repayment date approaches. The book
value of ZDP Shares in the financial statements is derived from the
various issue prices using the effective interest method, whereas
the accrued capital entitlement is based on the initial issue price
(100p) and its accrual over time to the redemption price and is not
affected by the prices of subsequent issues. As at the repayment
date, the book value and accrued capital entitlement will be equal
to one another.
Under normal circumstances it is anticipated that the ZDP share
price will be higher than the accrued entitlement as it will
reflect the fixed nature of the return. The year-end share price
had not recovered from the fall in markets in March 2020 caused by
COVID-19. However, as the share price recovers from this fall, it
is still expected that provided interest rates remain low, there
will be a premium on the ZDP shares for as long as the return is
higher than is generally available elsewhere. It is unlikely that
the share price will exceed the ultimate repayment price of 201.4p
which is due on 10 April 2024.
Objective
The objective of the company is to make loans to Inland on terms
which provide the final capital entitlement due to the holders of
the ZDP shares at the repayment date of 10 April 2024.
Principal risks and uncertainty and risk management
The Board believes that the principal risk faced by the Company
is the credit risk associated with the loan made to Inland. The
specific risks faced by Inland are included within its financial
statements and comprise: the inability to source, acquire, promote
and dispose of land; the increased complexity in the planning
process and the adoption of the Community Infrastructure Levy; a
severe fall in the housing market in the regions in which the group
operates; inability to retain or source high calibre and
experienced staff; significant upward changes in interest rates;
unexpected contamination being found on a site; changes in
legislation; cost overruns, material shortages and construction
delays; and the availability of finance for land acquisition. The
Directors of the Company are also directors of the ultimate parent
company and are therefore in a position to assess the
recoverability of amounts due by Inland.
The Company is also exposed to risks in relation to its
financial instruments. Further details of these risks and the way
in which they are managed are contained in note 9 of the financial
statements.
CHAIRMAN'S STATEMENT
The original loan and contribution agreements between the
Company and Inland contain certain protections for the Company
which are intended to benefit its ZDP shareholders. These include
first charges over pledged assets and pledged cash in a charged
bank account. The pledged assets (such as property and interests in
property development joint ventures) must have a book value of at
least 120% of the accrued value of the ZDP shares net of the
pledged cash. As at 30 September 2020, the accrued amount due to
ZDP shareholders was GBP30,234,786 (30 June 2019: GBP26,144,183),
the pledged cash was GBP7,702,396 (30 June 2019: GBP7,020,000) and
the pledged assets had a book value of GBP32,861,848 (30 June 2019:
GBP38,772,990), thereby satisfying this requirement.
The loan agreement also contains a covenant relating to asset
cover, which is shown below as at 30 September 2020. The
definitions of Assets and Financial Indebtedness are set out in the
prospectus published in connection with the issue of the ZDP shares
which is available at
http://www.inlandhomesplc.com/investors/inland-zdp/zdp-documents-and-accounts/
. The definition of Financial Indebtedness excludes indebtedness
which falls due more than 6 months after the final ZDP Repayment
Date of 10 April 2024.
Asset cover:
Assets / Financial Indebtedness plus ZDP Final Redemption
Liability = 2.2 times cover (30 September 2019: 2.0 times
cover).
The asset cover should be at least 1.8 times, so this covenant,
which is tested quarterly, was satisfied at 30 September 2020.
The board believes that the use of book values is generally
conservative, because a substantial proportion of the group's
assets are properties for which planning consents are sought. The
planning process takes time and any progress towards reaching the
stage when building can commence is not reflected in an increase in
the book values beyond the costs attributable to the relevant
sites, whereas any diminution in value is reflected by way of
impairment provisions, such that planning gains are not generally
recognised in Inland's financial statements until sales are
contracted. If the covenant ratios were to be calculated by
reference to the market values of the assets, the cover would be
higher and the gearing lower.
The COVID-19 pandemic affected the Inland Homes plc group in a
variety of ways as described in its annual report. The financing
arrangements for the group are designed to spread loan and ZDP
share maturities over time so that the risk of having to refinance
an excessive amount when financial and credit markets are stressed
is reduced. The funding comes from several sources, but with
compatible terms and security arrangements, reducing the group's
reliance on any single lender. Some of the group's financial
commitments are at fixed rates and others (mainly revolving credit)
are at floating rates of interest. This achieves a balance between
deferring the impact of changes in interest rates and providing
flexibility to draw down and repay some debt without early
repayment penalties. The ZDP Shares benefit from the group's debt
policies which mitigate and spread certain financing risks, and
represent an important element of the Group's financing structure.
ZDP Shareholders' ongoing support for the group is much appreciated
by the Board.
Enquiries:
Inland ZDP PLC
Nishith Malde FCA Tel: 01494 762450
STATEMENT OF COMPREHENSIVE INCOME
Year 15-month
ended period ended
30 September 30 September
2020 2019
Continuing operations Note GBP000 GBP000
--------------------------------------------- ----- ------------- --------------
Revenue
Interest income 2 1,537 1,523
--------------------------------------------- ----- ------------- --------------
Total income 1,537 1,523
Expenditure
Expenses 3 - -
--------------------------------------------- ----- ------------- --------------
Total expenditure - -
Profit before finance costs and
taxation 1,537 1,523
Finance costs 4 (1,537) (1,523)
Profit before tax -
Income tax 5 - -
--------------------------------------------- ----- ------------- --------------
Profit for the year and total comprehensive - -
income
--------------------------------------------- ----- ------------- --------------
Earnings per share for profit attributable
to the equity holders of the company
during the year / period 6 0.0p 0.0p
--------------------------------------------- ----- ------------- --------------
STATEMENT OF FINANCIAL POSITION
30 September 30
2020 September
2019
Note GBP000 GBP000
--------------------------------- ----- ------------- ------------
Current assets
Intercompany receivable 9,11 30,285 26,194
30,285 26,194
Non-current liabilities
Zero Dividend Preference Shares 7 (30,235) (26,144)
--------------------------------- ----- ------------- ------------
(30,235) (26,144)
--------------------------------- ----- ------------- ------------
Net assets 50 50
--------------------------------- ----- ------------- ------------
Equity
Ordinary share capital 8 50 50
--------------------------------- ----- ------------- ------------
Shareholders' funds 50 50
--------------------------------- ----- ------------- ------------
STATEMENT OF CHANGES IN EQUITY
Share
capital Total
GBP000 GBP000
----------------------------------------------- -------- -------
At 30 June 2018 50 50
Result and total comprehensive income for the
period - -
At 30 September 2019 50 50
----------------------------------------------- -------- -------
Result and total comprehensive income for the - -
year
----------------------------------------------- -------- -------
At 30 September 2020 50 50
----------------------------------------------- -------- -------
STATEMENT OF CASHFLOWS
Year 15-month
ended period ended
30 September 30 September
2020 2019
GBP000 GBP000
-------------------------------------------- ------------- --------------
Cash flow from operating activities
Profit for the year / period before tax - -
Adjustments for:
- interest expense 1,537 1,523
- interest and similar income (1,537) (1,523)
Net cash flow from operating activities - -
-------------------------------------------- ------------- --------------
Net increase in cash and cash equivalents - -
Net cash and cash equivalents at beginning - -
of the year / period
-------------------------------------------- ------------- --------------
Net cash and cash equivalents at the - -
end of the year / period
-------------------------------------------- ------------- --------------
The accompanying accounting policies and notes form and integral
part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
The principal accounting policies adopted in the preparation of
the financial statements are set out below.
1.1 Basis of preparation
The financial information has been prepared in accordance with
the Companies Act 2006 and International Accounting Standards in
conformity with the requirements of the Companies Act 2006. The
financial information comprises the Statement of Financial Position
as at 30 September 2020 and, for the year ended 30 September 2020,
the related Statement of Comprehensive Income, Statement of Changes
in Equity, Statement of Cashflows and related notes hereinafter
referred to as 'financial information'. The principal accounting
policies adopted by the Company are set out below.
The financial statements are prepared in sterling, which is the
functional currency of the Company. Monetary amounts in these
financial statements are rounded to the nearest GBP'000.
These accounting policies comply with each accounting standard
that is mandatory for accounting year ended 30 September 2020.
At the date of approval of these financial statements, certain
new standards, amendments and interpretations to existing standards
have been published by the IASB but are not yet effective and have
not been adopted early by the Company.
Management anticipates that all of the relevant pronouncements
will be adopted in the Company's accounting policies for the first
period beginning after the effective date of the pronouncement.
Information on new standards, amendments and interpretations that
are expected to be relevant to the Company's financial statements
is provided below.
Certain other new standards and interpretations have been issued
but are not expected to have a material impact on the Company's
financial statements.
The Company's business activities principal risks and
uncertainty, and risk management are set out in the Strategic
Report on pages 1 and 2. The Company is reliant on the ability of
Inland Homes Plc to continue as a going concern as detailed in the
strategic report. Further disclosures regarding the Company's
financial instruments and exposure to credit and liquidity risk are
set out in note 9 of the Financial Statements.
Given the dependency on Inland Homes Plc, details regarding
their going concern assumptions are given below.
Standards in issue but not yet effective
-- Amendments to IFRS 9: Financial Instruments
-- Annual Improvements to IFRSs (2015-2017 Cycle)
-- Amendments to References to the Conceptual Framework in IFRS Standards*
-- IFRS 3 Definition of a Business (Amendments to IFRS 3);
-- IAS 1 and IAS 8 Definition of Material (Amendments to IAS 1 and IAS 8);
-- IFRS 9, IAS 38 and IFRS 7 Interest Rate Benchmark Reform
(Amendments to IFRS 9, IAS 38 and IFRS 7);
-- Annual Improvements to IFRSs (2018-2020 Cycle)*; and
-- IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate
Benchmark Return Reform - Phase 2 (Amendments to IFRS 9, IAS 39,
IFRS 7 and IFRS 16)*
*Standards and amendments not yet endorsed by the EU.
None of the standards above are expected to have an impact on
the Company's financial statements.
Going concern
The Directors have reviewed the performance of the Group to
which the Company is a member of for the current period and
forecasts for the period to 28 February 2022. The going concern of
the Company is dependent on that of the Group due to the use of
intercompany debt across the Group to support the consolidated
operations and therefore Going Concern has been considered at Group
level.
The Directors have reviewed the performance of the Group and
parent Company for the current year and forecasts for the period to
28 February 2022.
The Directors are required to assess the Group's and parent
Company's abilities to continue as a going concern for a period of
at least the next twelve months. Given the significant adverse
impact of the COVID-19 crisis on the economy and the activities of
the Group, a thorough review of the going concern assumption has
been undertaken in preparing the Group and parent Company financial
statements.
The Group's and parent Company's going concern assessment
considers the Group's and parent Company's principal risks and is
dependent on several factors, including its financial performance,
continued access to borrowing facilities and the ability to operate
within their respective financial covenants.
In response to the global COVID-19 pandemic, which quickly
emerged in March 2020, the Group adopted stringent cash management
procedures to conserve resources, a range of other measures
undertaken to reduce the cost base and raised new equity of
GBP9.4m, net of expenses, to strengthen the balance sheet and
provide additional liquidity during this uncertain period.
In preparing the forecasts the Directors have considered the
continued adoption of stringent cash management procedures, market
disruptions already brought about by COVID-19, the possibility of
future disruption in the going concern period which could
potentially be caused by COVID-19 and other risks and
uncertainties, including credit risk and liquidity risk, the
present and possible future economic climate, the current and
possible future demand for land with planning consent and the state
of the housing market in the geographic areas where the Group
operates. The key risks faced by the Group are set out on pages 36
to 38 of the Group's annual report.
At the date of signing of the Group and parent Company's
accounts, the continued and prolonged impact of COVID-19 may result
in further uncertainties that are not apparent at present. There
are contractual and anticipated cash inflows expected which ensure
that the Group and parent Company have sufficient working capital
for its requirements.
At the date of signing of this report, the Group has a total
forward order book of GBP53.5m for private homes reserved or
contracted, including two contracted block sales of 109 units and a
contracted sale of a hotel and GBP73.9m for partnership housing
contract income. In addition, the Group has contracted to sell a
parcel of land for GBP14.0m (including payments for infrastructure
works) subject to certain conditions being fulfilled.
The Group also has contracted annualised residential and
commercial rental income of GBP2.3m.
As also disclosed in Note 42 of the Group's Annual Report and
Accounts, the Group extended the following facilities during
January 2021:
-- A revolving credit facility for GBP15.4m to 31 December
2021.
-- Two loan facilities amounting to GBP11.0m to 31 December
2021.
-- Three bank loan facilities amounting to GBP41.3m to 30 April
2022.
The Group has three facilities totalling GBP26.4m falling due
for repayment on 31 December 2021. The Directors are in advanced
discussions with the provider of the revolving credit facility to
renew the facility for a further five-year period. The Directors
have positive relationships and have had constructive discussions
with all their existing lenders and a number of other potential
lenders; however, they do not as yet have a binding commitment to
extend or refinance these facilities beyond 31 December 2021.
The Group has also negotiated a relaxation to the interest cover
covenant test under the revolving credit facility with HSBC in
respect of the December 2020 and March 2021 periods as proactive
defence against any possible severe but plausible downside
scenarios.
The Directors have performed detailed sensitivity analyses to
test the Group's future liquidity and banking covenant compliance
based on several scenarios. The Group has forecast land sales in
the next twelve months in the normal course of its business.
As part of their Going Concern review, the Directors have
considered the impact of a delay of six months on each of these
sales in isolation. They have also considered, again in isolation,
a price reduction of 10% on all residential unit sales that have
not been contracted and are forecast to complete after 31 March
2021. Finally, the Group considered a delay in residential unit
sales by three months. None of these scenarios leads to an issue
with either the Group's debt covenants or its liquidity.
The Directors have also considered the following severe, but
plausible downside scenario:
-- Only residential sales that have exchanged or reserved
complete between now and 31 March. After 31 March through to 28
February 2022 legal completions of residential units continue, but
at a 50% reduction in volume and a 10% reduction in sales
prices
-- No land sales until the end of May 2021, other than a small
scheduled sale where negotiations with the purchaser are in
progress at the date of this report.
Additionally, the Directors considered an even more severe
scenario which mirrors the above but assumes no residential unit
sales for a period of three months from 1 April 2021 before
returning to the assumptions in the Group's base case.
The Board's modelling choice of cessation of activity period for
the severe, but plausible downside scenario is based on the market
experiences of 2020, when the national housebuilders stopped
purchasing land for a short period during national lockdown.
In making their assessment of the sensitivity tested above the
Directors have considered the Stamp Duty Land Tax holiday which
expires on 31 March 2021. The Directors are therefore confident
that residential unit sales reserved or exchanged for completions
due in the months of February 2021 and March 2021 are secure. The
Directors have assumed that the current Stamp Duty Land Tax holiday
window is not extended by the UK Government after 31 March 2021 in
preparing their projections.
Under both severe, but plausible scenarios, the Directors would
need to make strategic choices in the near term to delay both
planning application activity, construction activity and identified
but non-contractual purchases however there is no need for any
further liquidity to be introduced into the Group or any need for
any relaxation of the Group's financial covenants with its lenders.
Should the cessation of the land and planning activity and
housebuilding activity discussed above, extend beyond the periods
referred to above, then the Group may have to rely on the sale of
property assets at lower than open market values to generate
liquidity for the Group and parent Company to meet their
obligations as they fall contractually due. Again, there would be
no need for any relaxation of the Group's financial covenants with
its lenders under such circumstances.
Additionally, the Directors also have the option to access the
capital and debt markets to raise further liquidity as may be
needed.
The Strategy outlined above details our approach to the current
situation but, the Directors are mindful that no one can forecast
exactly how the global COVID-19 pandemic will play out and how this
may affect the Group, industry and the wider economy for the
foreseeable future. A significant worsening of the situation and a
return to a strict national lockdown for a prolonged period longer
than the severe, but plausible downside scenarios would have
implications for the Group as it would for many other businesses.
Such a situation would then require the Directors to re-examine the
Group's financial position at the time and if necessary, report any
significant adverse changes.
At the time of approving these financial statements and after
making appropriate enquiries, the Directors have a reasonable
expectation that the Group and parent Company have adequate
resources to continue in operational existence for the foreseeable
future. The Directors therefore consider it appropriate to prepare
the financial statements on the Going Concern basis.
1.2 Income
Income is recognised in revenue using the effective interest
method on an accruals basis.
1.3 Expenses
All expenses are borne by the Company's parent Company, Inland
Homes 2013 Limited.
1.4 Zero dividend preference shares
Zero dividend preference shares are recognised as liabilities in
the Statement of Financial Position in accordance with IFRS 9:
Financial Instruments. After initial recognition, these liabilities
are measured at amortised cost, which represents the initial
proceeds of the issuance plus the accrued interest based on the
effective interest method to 30 September 2020.
With the modification of the zero dividend preference shares,
which occurred during the prior period, the revised terms were
considered to constitute a substantial modification.
1.5 Intercompany receivable
Intercompany receivables are recognised as assets in the
Statement of Financial Position in accordance with IFRS 9:
Financial Instruments. After initial recognition they are measured
at amortised cost which represents the initial loan plus the
accrued interest receivable at the reporting date. Directors have
assessed intercompany receivables to meet the requirements under
the business model test and SPPI test. The objective of the
business model is to hold financial assets to collect their
contractual cash flows. The cash flows are solely payments of
principal and interest on the principal amounts outstanding.
The Company applies the general approach to providing for
expected credit losses prescribed by IFRS 9 for intercompany
receivables. The expected credit loss provision in the current year
and prior period have been assessed as GBPnil.
Pursuant to a loan agreement between the Company and Inland
Homes plc, the Company has lent Inland Homes plc the gross proceeds
of its placings. This loan is on terms requiring its repayment by
Inland Homes plc to the Company on the ZDP shares repayment date
when the company must be wound up however the loan made is
repayable to Inland ZDP plc on demand and therefore classified as a
current asset.
1.6 Finance costs
Finance costs are calculated as the difference between the
proceeds on the issue of zero dividend preference shares and the
final liability and are charged as finance costs over the term of
the life of these shares using the effective interest method.
1.7 Finance income
Finance income is calculated on the amount lent to Inland Homes
2013 Limited and represents the difference between the amounts
advanced (which was equal to the proceeds on the issue of zero
dividend preference shares) and the final amounts due (which is
equal to the liability payable on redemption of the zero dividend
preference shares). It is recognised as revenue as interest income
over the term of the zero dividend preference shares using the
effective interest method.
1.8 Taxation
The charge for taxation is based on the taxable profits for the
year. Taxable profit differs from profit before tax as reported in
the Statement of Comprehensive Income because it excludes items of
income or expenses that are never taxable or deductible. The
Company's liability for tax is calculated using rates that have
been enacted or substantively enacted by the reporting date.
1.9 Equity
An equity instrument is a contract which evidences a residual
interest in the assets after deducting all liabilities. Equity
comprises 'Share capital', which represents the nominal value of
equity shares.
1.10 Key estimates and assumptions
Estimates and judgements used in preparing the financial
statements are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed reasonable. The resulting estimates will,
by definition, seldom equal the related actual results.
Judgement is required in assessing the recoverability of the
intercompany receivable. Recoverability is underpinned by the
profitability of Inland's development and strategic land sites
1.11 Segment information
In accordance with IFRS 8, information is disclosed to enable
the users of financial statements to evaluate the nature and
financial effects of the business activities in which the Company
engages. The board has identified that the sole operating segment
is to provide the final capital entitlement of the Company's ZDP
shares to the holders of the ZDP shares at the final repayment date
of 10 April 2024. Consequently, all information presented in these
financial statements relate to that segment.
2 Interest Income
Year 15-month
ended period ended
30 September 30 September
2020 2019
GBP000 GBP000
----------------------------------------- ------------- --------------
Interest income from group undertakings 1,537 1,523
----------------------------------------- ------------- --------------
3 Expenses
Administration expenses of GBPnil were suffered during the year
(period ended 30 September 2019: GBPnil). All administration
expenses during the year, including auditor's remuneration of
GBP25,000 (2019 GBP20,000), were borne by the ultimate parent
Company, Inland Homes plc. The directors received no remuneration
for their services in relation to Inland ZDP PLC. Further
disclosures with regards to the auditors' remuneration can be found
in the group financial statements.
There were no employees other than directors in the current year
or the prior year.
4 Finance costs
Year 15-month
ended period ended
30 September 30 September
2020 2019
GBP000 GBP000
-------------------------- ------------- --------------
ZDP share interest costs 1,537 1,523
-------------------------- ------------- --------------
5 Taxation
Year 15-month
ended period ended
30 September 30 September
2020 2019
GBP000 GBP000
------------------------------------------ ------------- --------------
Profit before tax - -
------------------------------------------ ------------- --------------
Profit on ordinary activities multiplied
by the standard
rate of corporation tax in the UK
of 19.00% (2019: 19.00%) - -
ZDP share interest costs disallowed 292 290
Group relief (292) (290)
------------------------------------------ ------------- --------------
Tax charge - -
------------------------------------------ ------------- --------------
6 Earnings per ordinary share
The calculation of earnings per share is based on a profit after
tax figure for the year of GBPnil (period ended 30 September 2019:
GBPnil) and the weighted average number of 50,000 ordinary shares
in issue during the year. The basic and diluted earnings per share
are the same.
7 Zero dividend preference shares
At 30 September At 30 September At 30 At 30
2020 2020 September September
2019 2019
No. GBP000 No. GBP000
------------------------------- ---------------- ---------------- ------------------ -------------
ZDP shares
Opening ZDP shares 16,430,790 26,144 12,444,200 18,447
Issued during the year/period 1,671,067 2,554 3,986,590 6,174
ZDP share interest cost - 1,537 - 1,523
------------------------------- ---------------- ---------------- ------------------ -----------
18,101,857 30,235 16,430,790 26,144
------------------------------- ---------------- ---------------- ------------------ -----------
8 Ordinary share capital
Authorised/called up/allotted/fully paid
At 30 At 30 At 30 At 30
September September September September
2020 2020 2019 2019
No. GBP000 No. GBP000
--------------------------------- ----------- ----------- ----------- -----------
Opening ordinary shares 50,000 50 50,000 50
Issued during the year / period - - - -
--------------------------------- ----------- ----------- ----------- -----------
50,000 issued ordinary shares
of GBP1 each 50,000 50 50,000 50
--------------------------------- ----------- ----------- ----------- -----------
All ordinary shares are owned by the Company's parent Company,
Inland Homes 2013 Limited.
Each ordinary share is entitled to one vote at a general
meeting.
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 the ZDP shares.
9 Financial instruments
The Company's financial instruments comprise fixed interest
creditors classified as financial liabilities at amortised cost and
financial assets classified as amortised cost.
The main risks arising from the Company's financial instruments
are liquidity risk and funding risk and credit risk.
Liquidity and funding risk
This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
Liquidity risk is considered to be significant as the Company is
reliant upon repayment from its ultimate parent Company. The parent
Company manages liquidity risk by maintaining sufficient cash
balances and ensuring availability of funding through an adequate
amount of credit facilities. The parent Company aims to maintain
flexibility in funding by keeping credit lines available.
Contractual maturity analysis for financial liabilities
At 30 September At 30 September
2020 2019
GBP000 GBP000
---------------------------------- ------------------ ------------------
ZDP shares ZDP shares
final redemption final redemption
figure figure
Less than one year - -
More than one year and less than
five years 36,457 33,092
Over five years - -
---------------------------------- ------------------ ------------------
36,457 33,092
---------------------------------- ------------------ ------------------
Credit risk
This is the risk that a counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has
entered with the Company. Credit risk is managed by way of a
security over the loan. The security relates to pledged tangible
assets (such as property and interests in property development
joint ventures) and pledged cash in a charged bank account.
At the reporting date, the Company's financial assets exposed to
credit risk amounted to the following:
Amortised Cost
At 30 September At 30 September
2020 2019
GBP000 GBP000
------------------------------------------ ---------------- ----------------
Amounts due from ultimate parent company 30,285 26,194
------------------------------------------ ---------------- ----------------
The directors consider the carrying amounts to be a reasonable
approximation of fair value.
The Company applies the general approach to providing for
expected credit losses prescribed by IFRS 9 for amounts due from
ultimate parent Company. There were no expected credit loss
provisions in the current year and prior period. The security that
is pledged is more than sufficient to cover the amounts due. The
Directors have assessed a possible downturn in the value of the
pledged assets by 10% and following that assessment no credit loss,
as defined by IFRS 9, would arise.
The following table presents the fair value of financial
liabilities that are carried at amortised cost in the Statement of
Financial Position in accordance with the fair value hierarchy.
This hierarchy groups financial liabilities into three levels based
on the significance of inputs used in measuring the fair value of
the financial liabilities. The fair value hierarchy has the
following levels:
-- Level 1: quoted prices (unadjusted) in active markets for identical liabilities;
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the liability, either directly
(i.e., as prices) or indirectly (i.e. derived from prices); and
-- Level 3: inputs for the liability that are not based on
observable market data (unobservable inputs).
The level within which the financial liability is classified is
determined based on the lowest level of significant input to the
fair value measurement.
If the financial liabilities were measured at fair value in the
Group Statement of Financial Position, they would be grouped into
the fair value hierarchy as follows:
The level within which the financial liability is classified is
determined based on the lowest level of significant input to the
fair value measurement.
Level 1 Level 2 Level 3 Total
GBP000 GBP000 GBP000 GBP000
------------------------------- -------- ------- ------- --------
Net fair value at 1 July 2018 26,536 - - 26,536
Additions 2,699 - - 2,699
Fair value movements during
the year (996) - - (996)
------------------------------- -------- ------- ------- --------
Net fair value at 30 September
2020 28,239 - - 28,239
------------------------------- -------- ------- ------- --------
Level 1 Level 2 Level 3 Total
GBP000 GBP000 GBP000 GBP000
------------------------------- ------- ------- ------- -------
Net fair value at 1 October
2019 18,878 - - 18,878
Additions 6,174 - - 6,174
Fair value movements during
the year 1,484 - - 1,484
------------------------------- ------- ------- ------- -------
Net fair value at 30 September
2019 26,536 - - 26,536
------------------------------- ------- ------- ------- -------
The ZDP shares are carried at their accrued value of 166.81p per
share (30 September 2019: 159.12p) however their closing price on
the main market of the London Stock Exchange on 30 September 2020
was 156.00p (30 September 2019: 161.50p).
In August 2018, the ZDP shareholders agreed to rollover and
extend the facility and will now be repaid on or before 10 April
2024. This was accounted for as a substantial modification due to
the significant extension in the term of the debt, the change to
the covenants and the substantial change in interest rate. This
resulted in no gain or loss being recognised in the Statement of
Comprehensive Income.
10 Capital management policies and procedures
The Company's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern; and
-- to ensure sufficient liquid resources are available to meet
the funding requirement of its ZDP shareholders.
The directors consider that the capital management policies and
procedures of the ultimate parent company will enable the Company
to meet its objectives. Further details of the policies and
procedures of Inland Homes plc can be found within its financial
statements and include a target capital to overall financing ratio
of over 40%.
The capital of the Company comprises 1,860,186 (ordinary shares
and ZDP preference shares) and the nominal value of these amounted
to GBP50,000 and GBP1,810,186 respectively.
11 Related party transactions
The loan to Inland Homes plc is repayable along with all accrued
interest, together with a contribution for such amount that will
result in the Company having sufficient cash funds to satisfy the
then current, or as the case may be, final capital entitlement of
the ZDP shares on the ZDP repayment date (see the Strategic Report
on page 1) or immediately upon an event of default. At 30 September
2020, the total amount due from the ultimate parent Company was
GBP30,285,000 (30 September 2019: GBP26,194,000).
12 Ultimate controlling party
The directors regard Inland Homes Plc as the ultimate parent and
controlling party.
13 Holding Company
The Company is a wholly owned subsidiary of Inland Homes 2013
Limited which is a wholly owned subsidiary of Inland Homes plc, a
quoted Company whose shares are traded on the AIM market of the
London Stock Exchange. Copies of its accounts for the year ended 30
September 2020 will shortly be available to view on Inland's
website (www.inlandhomesplc.com)
14 Responsibility and audit
The Directors are the persons responsible for the full annual
report and financial statements.
Each of the Directors confirms that to the best of his
knowledge:
-- the financial statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
-- the Strategic Report and the Report of the Directors includes
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 it faces.
The statutory financial statements have been audited by BDO LLP
and their report was unqualified.
15 Publication of non-statutory accounts
The financial information for the year ended 30 September 2020
and the fifteen -month period ended 30 September 2019 in this
announcement does not constitute the company's statutory accounts
for those years.
Statutory accounts for the fifteen-month period ended 30
September 2019 have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 30 September 2020 will be
delivered to the registrar of companies in due course.
The auditors' reports on the accounts for 30 September 2020 and
30 September 2019 were unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
A copy of the annual report will shortly be submitted to the
National Storage Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and at the
Company's website:
http://www.inlandhomesplc.com/investors/inland-zdp/zdp-documents-and-accounts/
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END
FR DKABKDBKDPBK
(END) Dow Jones Newswires
February 08, 2021 02:00 ET (07:00 GMT)
Inland Zdp (LSE:INLZ)
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