TIDMRMDZ TIDMRMDL

RNS Number : 7003T

RM ZDP PLC

29 March 2021

RM ZDP PLC

LEGAL ENTITY IDENTIFIER ('LEI'): 213800QYQTLY4A32F885

ANNUAL FINANCIAL REPORT ANNOUNCEMENT

For the year ended 31 December 2020

OBJECTIVE AND FINANCIAL INFORMATION

Objective

The objective of RM ZDP Plc (the "Company") is to meet the final capital entitlement of the ZDP Shares at the ZDP Repayment Date.

 
 Financial Information 
                                              Year ended       Year ended 
                                               31 December    31 December 
                                               2020                  2019 
-------------------------------------------  -------------  ------------- 
 Accrued capital entitlement per ZDP Share         109.86p        106.18p 
 ZDP Share redemption yield                           3.5%           3.5% 
 

CHAIR'S STATEMENT

I am pleased to present the Company's Annual Report and accounts for the year ended 31 December 2020 for RM ZDP Plc (the "Company").

The Company is a wholly owned subsidiary of RM Secured Lending plc (the "Parent" or "RMDL") and was established for the purpose of issuing zero dividend preference shares of GBP 0.01 each ("ZDP" Shares).

On 3 April 2018, 10,869,950 ZDP Shares were issued and admitted to trading on the standard segment of the Official List of the London Stock Exchange. The Company has made a loan of the gross proceeds raised from the issue of the ZDP Shares to RMDL pursuant to the ZDP Loan Agreement between the Company and RMDL ("Loan Agreement").

Subject to the Companies Act, on a return of capital, on a winding--up or otherwise, ZDP Shareholders will be entitled to receive an amount equal to the Initial Capital Entitlement of 100 pence per ZDP Share, increased at such daily accrual rate as compounds annually to give a Final Capital Entitlement of 110.91 pence per ZDP Share at the ZDP Repayment Date of 6 April 2021, which is equivalent to a Redemption Yield of 3.5 per cent. per annum (compounded annually).

As at 31 December 2020 the accrued capital entitlement per ZDP Share was 109.86p and the share price per ZDP Share was 107.50p.

As part of the Loan Agreement, the Company and the Parent entered into the Undertaking. Pursuant to the Undertaking, to the extent that the Final Capital Entitlement multiplied by the number of outstanding ZDP Shares as at the Repayment Date (or, if earlier, the accrued capital entitlement multiplied by the number of outstanding ZDP Shares following the date on which a Winding-Up Resolution is approved) exceeds the aggregate principal amount and accrued interest due from the Parent to the Company pursuant to the Loan Agreement as at the Repayment Date, the Parent shall: (i) subscribe an amount equal to or greater than the Additional Funding Requirement for the Company Ordinary Shares or (ii) make a capital contribution or gift or otherwise pay an amount equal to or greater than (where rounding is required) the Additional Funding Requirement. Where applicable, the Additional Shares may be Company Ordinary Shares or such other class of shares in the Company as is agreed between the Parent and the Company.

The key performance indicator against which the Board has reviewed the Company's performance is set out on page 4.

From the perspective of the Directors, the Company's activities are integrated with the Parent for which the Annual Report can be found on the Parent's website.

Norman Crighton

Chair

26 March 2021

BOARD OF DIRECTORS

Composition

At the date of this report, the Board consists of three non-executive Directors including the Chair, two of whom are male and one female. All the Directors have served during the entire year since their appointment on 21 February 2018.

The Board believes that during the year ended 31 December 2020 its composition was appropriate for the Company's purpose.

The Directors have a broad range of relevant experience to meet the Company's requirements and their biographies are given below:

Norman Crighton (Non-executive Chair)

Norman is the Chair of Weiss Korea Opportunity Fund and AVI Japan Opportunity Trust. Norman was, until May 2011, an Investment Manager at Metage Capital Limited where he was responsible for the management of a portfolio of closed-ended funds and has 30 years' experience in closed-ended funds having worked at Olliff and Partners, LCF Edmond de Rothschild, Merrill Lynch, Jefferies International Limited and latterly Metage Capital Limited. His experience in investment banking covers analysis and research as well as sales, market making, proprietary trading and corporate finance.

Guy Heald (Non-executive Director)

Guy has spent most of his career in banking, not only specialising in markets, but also in general management positions overseeing all aspects of banking, including lending. He worked in London, New York and Tokyo and has an extensive knowledge of companies needs for financing and managing interest rate, liquidity and foreign exchange risks. During his career he worked for Brown Shipley, Chemical Bank and HSBC where he held senior positions including Head of Global Markets and Chief Executive Officer at HSBC Japan. After leaving banking in 2003 he has served as an adviser, non-executive director and trustee of several charities as well as starting a number of successful family companies of his own. The SME market is of particular interest to Guy, specifically the challenges facing companies in their pursuit for growth, as he invests venture and growth capital himself.

Marlene Wood (Non-executive Director and Chair of the Audit Committee)

Marlene is a chartered accountant with a broad range of experience in both the private and public sector and is currently a Non-executive Director and Chair of the Audit Committee of GCP Student Living plc and Home REIT plc.

Marlene has 20 years' experience in the commercial property sector having been finance director for Miller Developments raising finance for major property transactions both in the UK and Europe. Her experience covers governance and risk management as well as financial oversight and debt raising.

STRATEGIC REPORT AND OTHER STATUTORY INFORMATION

Incorporation details

RM ZDP Plc was incorporated and registered in England and Wales on 21 February 2018 with registered number 11217952 as a public company limited by shares. The registered office of the Company is at 1st Floor, Senator House, 85 Queen Victoria Street, London, EC4V 4AB.

Principal activities

The Company is a wholly owned subsidiary of RM Secured Direct Lending PLC (the "Parent") and was incorporated by the Parent for the sole purpose of issuing the ZDP Shares. The Company's only material financial obligations are in respect of the ZDP Shares. Its only material assets are its Loan to the Parent pursuant to the Loan Agreement and the obligation of the Parent pursuant to the Undertaking to put the Company in a position to meet its obligations in respect of the ZDP Shares and to pay its operating expenses.

Objective

The objective of the Company is to meet the final capital entitlement of the ZDP Shares at the ZDP Repayment Date.

As per the prospectus, subject to the Companies Act, on a return of capital, on a winding--up or otherwise, ZDP Shareholders will be entitled to receive an amount equal to the Initial Capital Entitlement of 100 pence per ZDP Share, increased at such daily accrual rate as compounds annually to give a Final Capital Entitlement of 110.91 pence per ZDP Share at the ZDP Repayment Date of 6 April 2021, which is equivalent to a Redemption Yield of 3.5 per cent. per annum (compounded annually).

Financial performance

The current year loss is GBP274,000 (2019: loss of GBP269,000).

Key performance indicators

The Board reviews the performance of the Company by reference to one key performance indicator (KPIs) as follows;

-- Accrued capital entitlement, which represents the Company's liability per ZDP share. As at 31 December 2020, the total accrued capital entitlement is GBP11,541,000, equivalent to 109.86p per ZDP Share.

Further KPIs for the Parent can be found in its Annual Report. The Company's ZDP Shares market capitalisation as of 31 December 2020 was GBP11.7 million based on 10.9 million ZDP Shares and at a share price of 107.50p per ZDP share.

Current and future developments

The current and future developments of the Company are set out in the Chair's statement on page 2 and can also be reviewed as part of the Group's activities by reference to the Parent's Annual Report.

External service providers

Administrative functions are contracted to external service providers. However, the Directors retain responsibility for exercising overall control and supervision of these external service providers.

Principal risks and uncertainties

Due to the Company's dependence on the Parent to repay the loan and provide any contribution to meet the final capital entitlement of the ZDP Shareholders, the principal risk faced by the Company is the credit risk posed by the Loan Agreement and the Parent's ability to perform its obligations under the undertaking. The Board has carried out a robust assessment of this risk. The specific risks faced by the Parent are described in its annual report, which include macroeconomic risks, legal and compliance risks, investment risks, taxation risks, cyber security risks and an update on any effect of Brexit.

In addition, the Company is also focused on the following risk;

Final capital entitlement: The Parent's debt to the Company pursuant to the Loan Agreement and the Parent's obligations under the Undertaking will rank behind any secured creditors of the Parent, therefore it is not guaranteed that the final capital entitlement will be paid.

Mitigation: The Parent has granted the Undertaking to the Company. Pursuant to the Undertaking, the Parent will ensure that the Company has sufficient assets on the ZDP Repayment Date to satisfy the ZDP Capital Entitlement then due and to pay any operational costs or expenses incurred by the Company from time to time. Dividends and other payments to Shareholders will be restricted while the ZDP Shares are in issue unless Cover is at least 3 times immediately following any such payment or if such payment is required in order for the Parent Company to maintain its investment trust status.

In addition, under the Investment Policy of the Parent, there is a limit that gearing represented by borrowings, including any obligations owed by the Parent in respect of an issue of zero dividend preference shares (whether issued by RMDL or any other member of its group) or any third--party borrowings, will not, in aggregate, exceed 20 per cent. of the net asset value of the Parent calculated at the time of drawdown. The unaudited Gross Assets of the Parent at 31 December 2020 were GBP132 million.

DIRECTORS' REPORT

The Directors present their report and accounts for the year ended 31 December 2020. The Company commenced its operations on 3 April 2018 when its ZDP Shares were admitted to trading on the London Stock Exchange.

Strategic report

The Directors' Report should be read in conjunction with the Strategic Report on pages 4 to 5.

Directors and Share Interests

The Directors who served during the year, all of whom are non-executive and were appointed with effect from incorporation on 21 February 2018 were as follows;

   --    Norman Crighton (Chair) 
   --    Guy Heald 
   --    Marlene Wood 

Since the Directors of the Company are also Directors of the Parent, they are considered to be non-independent Directors of the Company; however, in their capacity as Directors of the Parent, each is considered to be independent. Biographies of each Director are set out on page 3 and demonstrate the wide range of skills and experience each brings to the Board.

A formal performance evaluation of the Parent Board and its committees has been carried out and the Parent Board considers that all of the Directors contribute effectively and have the skills and experience relevant to the future leadership and direction of the Parent.

The appointment and replacement of Directors are governed by the Articles of association ("Articles"), the Companies Act 2006 and related legislation. The Articles themselves may be amended by a special resolution in a general meeting and at a class meeting of the Company's shareholders.

Corporate governance

As set out in the Company's prospectus dated 12 March 2018, the Company has a standard listing on the London Stock Exchange, so is not obliged to comply with UK Corporate Governance Code, nor does the Company intend to comply with it on a voluntary basis. In the opinion of the Board, the interests of the Company and the Shareholders are protected by the governance procedures adopted by the Parent as set out in its Annual Report.

Legal status and listing rules requirements

The Company was incorporated in England and Wales as a public company limited by shares under the Companies Act. The principal legislation under which the Company operates is the Companies Act.

The Company is admitted to the standard segment of the Official Listing as such the Company is not subject to the ongoing requirements applicable to premium-listed companies under the Listing Rules.

   Alternative Investment Fund Manager   ("AIFM") 

Pursuant to the AIFM Agreement, a summary of which is set out in the Prospectus, the Company has appointed International Fund Management Limited to act as the external non-EEA AIFM.

The AIFM acts as the Company's alternative investment fund manager for the purposes of AIFMD and maintains responsibility for implementing appropriate risk measurement and management standards and procedures for the Company.

Under the terms of the AIFM Agreement, the AIFM is entitled to receive a fixed fee of GBP3,000 plus reimbursement of all out-of-pocket costs, expenses and charges reasonably and properly incurred and documented on behalf of the Company.

Share issues

On incorporation, the issued share capital of the Company was 50,000 Ordinary Shares of a nominal value of GBP1.00 each which were subscribed by the Parent and fully paid up.

The Company's sole purpose is to issue ZDP Shares, which were issued at the Issue Price of 100 pence. The number of ZDP Shares to be issued pursuant to the Initial ZDP Placing was limited to 20 million ZDP Shares. However, at a general meeting of the Company held on 7 March 2018, a special resolution was proposed to, inter alia, provide the Directors with authority to allot ZDP Shares and authority to issue up to 60 million ZDP Shares. The Parent was the only shareholder entitled to vote at the general meeting and, as a result, such authority to issue up to 60 million ZDP Shares was granted prior to the issue and allotment of ZDP Shares pursuant to the Initial ZDP Placing and the ZDP Placing Programme.

Significant Agreements

The Company is not party to any significant agreements which take effect after or terminate upon a change of control of the Company, nor has the Company entered into any agreements with its Directors to provide for compensation for loss of office.

Company Secretary & Administrator

PraxisIFM Fund Services (UK) Limited has been appointed as the Company Secretary of the Company and in addition, as Administrator, to provide administration services to the Company.

Capital structure and voting rights

At the year end, the Company's issued ordinary share capital comprised 50,000 Ordinary Shares of GBP1.00 nominal value.

There were 10,869,950 ZDP Shares in issue at the year end.

The Company's Ordinary Shares to be held by the Parent are the only voting shares in the Company, subject to certain matters which require ZDP Shareholder approval. The ZDP Shareholders shall have the right to receive notice of all general meetings of the Company for information purposes but shall have no right to attend or vote at any such meeting of the Company.

Anti-bribery and corruption

It is the Company's policy to conduct all of its business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates. The Company's policy and the procedures that implement it are designed to support that commitment.

Notice of general meetings

At least twenty-one days' notice shall be given to all the members and to the auditors. All other general meetings shall also be convened by not less than twenty-one days' notice to all those members and to the auditors unless the Company offers members an electronic voting facility and a special resolution reducing the period of notice to not less than fourteen days has been passed, in which case a general meeting may be convened by not less than fourteen days' notice in writing. A special resolution will be proposed at the Annual General Meeting to reduce the period of notice for general meetings other than the Annual General Meeting to not less than fourteen days.

Going concern

Given that the Company is due to pay its final capital entitlement to the ZDP Shareholders (110.91 pence per ZDP Share) on the ZDP Repayment Date of 6 April 2021 and the Company will be placed into voluntary liquidation and wound up thereafter, the Directors believe that it would not be reasonable to adopt the going concern basis in preparing the financial statements. Therefore, the financial statements have been prepared under a basis other than going concern. The cost of liquidation will be borne by the Parent Company and as such provision for the estimated liquidation costs has not been provided for. Please refer to note 1 on page 23 of the accounting policies.

Auditor information

Each of the Directors at the date of the approval of this report confirms that:

(i) so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

(ii) the Director has taken all steps that he ought to have taken as Director to make himself aware of any relevant information and to establish that the Company's auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.

In accordance with Section 489 of the Companies Act 2006, an ordinary resolution to re-appoint Ernst & Young LLP as the Company's auditors will be put forward at the forthcoming Annual General Meeting.

Dividends

The Directors do not recommend the payment of a final dividend in respect of the year ended 31 December 2020.

Environmental matters

The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Employees

The Company has no employees. As at 31 December 2020 the Company had three Directors of whom one is female and two are male.

Social, community and human rights issues

Having no employees, the Company, as an investment company, has no direct impact on social, community, environmental or human rights matters.

By order of the Board

Brian Smith

For and on behalf of

PraxisIFM Fund Services (UK) Limited

Company Secretary

26 March 2021

DIRECTORS' REMUNERATION POLICY AND REPORT

Remuneration Policy

None of the Directors will receive any remuneration from the Company for their services. No Director has a service contract with the Company and no Director is eligible for bonuses, pension benefits, share options, long-term incentive scheme or other benefits.

Remuneration in year

In line with the above policy, the directors did not receive any remuneration or other benefits from the Company in the year ended 31 December 2020.

Norman Crighton

Chair

26 March 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the group and parent company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, group financial statements are required to be prepared in accordance with international financial reporting standards (IFRSs) adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

-- select suitable accounting policies and then apply them consistently;

-- make judgements and estimates, which are reasonable and prudent;

-- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts; and

-- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

For reasons stated in the Directors' Report and note 2, the financial statements of the Company have been prepared on a basis other than going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the Company's website at https://rmdl.co.uk/ which is maintained by the Company's Investment Manager. The work carried out by the auditors does not involve consideration of the maintenance and integrity of these websites and, accordingly, the auditors accept no responsibility for any changes that have occurred to the accounts since being initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of nancial statements may differ from legislation in other jurisdictions.

Directors' confirmation statement

The Directors each confirm to the best of their knowledge that:

(a) the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

(b) this Annual Report includes a fair review of the development and performance of the business and position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Directors consider that the Annual Report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's performance, business model and strategy.

For and on behalf of the Board

Norman Crighton

Director

26 March 2021

 
 Statement of Comprehensive Income 
 For the year ended 31 December 2020 
                                                           Year ended     Year ended 
                                                          31 December    31 December 
                                                                 2020           2019 
                                                  Note        GBP'000        GBP'000 
-----------------------------------------------  -----  -------------  ------------- 
 Income 
 Investment income                                 3              229            220 
 Administrative expenses                                         (73)           (79) 
 Result from operating activities                                 156            141 
 Finance costs                                     6            (401)          (386) 
 Loss before taxation                                           (245)          (245) 
 Taxation                                          4             (29)           (24) 
 Loss after taxation                                            (274)          (269) 
-----------------------------------------------  -----  -------------  ------------- 
 Return per Ordinary Share (pence)                            (5.48p)        (5.38p) 
-----------------------------------------------  -----  -------------  ------------- 
 
 There were no items of other comprehensive income in the current year 
  therefore the loss 
 for the year are also the total comprehensive 
  loss for the year. 
 
   The notes form an integral part of these financial statements. 
 
 
 Statement of Financial Position 
                                            As at 31 December       As at 31 December 
                                                         2020                    2019 
                                     Note             GBP'000                 GBP'000 
----------------------------------  -----  ------------------  ---------------------- 
 
 Current assets 
 Financial assets at amortised 
  cost                                 3               11,942                  11,541 
 Cash and cash equivalents                                 18                      18 
 Trade and other receivables                              172                     105 
 Total current assets                                  12,132                  11,664 
----------------------------------  -----  ------------------  ---------------------- 
 Total assets                                          12,132                  11,664 
----------------------------------  -----  ------------------  ---------------------- 
 
 Current liabilities 
 Trade and other payables                               (140)                    (73) 
 Zero Dividend Preference Shares       6             (11,942)                (11,541) 
                                    -----                      ---------------------- 
 Total current liabilities                           (12,082)                (11,614) 
----------------------------------  -----  ------------------  ---------------------- 
 
 Total liabilities                                   (12,082)                (11,614) 
----------------------------------  -----  ------------------  ---------------------- 
 Net assets                                                50                      50 
----------------------------------  -----  ------------------  ---------------------- 
 
 Capital and reserves: equity 
 Share capital                        8                    50                      50 
 Capital contribution                                     743                     469 
 Profit and loss reserve                                (743)                   (469) 
 Total Shareholders' funds                                 50                      50 
----------------------------------  -----  ------------------  ---------------------- 
 
 NAV per share - Ordinary Shares 
  (pence)                             9               100.00p                 100.00p 
 Capital Entitlement - ZDP Shares 
  (pence)                             9               109.86p                 106.18p 
----------------------------------  -----  ------------------  ---------------------- 
 
 The financial statements of the Company were approved and authorised 
  for issue by the Board of Directors on 26 March 2021 and signed on their 
  behalf by: 
 
 
  Norman Crighton 
 Director 
 
 The Company is registered in England and Wales with registered company 
  number 11217952. 
 
 The notes form an integral part of these financial statements. 
 
 
 
 Statement of Changes in Equity 
 For the year ended 31 December 
  2020 
                                                                 Capital   Profit and 
                                           Share capital    contribution         loss     Total 
                                   Note          GBP'000         GBP'000      GBP'000   GBP'000 
--------------------------------  ------  --------------  --------------  -----------  -------- 
 Balance as at beginning of 
  the year                                            50             469        (469)        50 
 Loss after taxation                                   -               -        (274)     (274) 
 Capital contribution                                  -             274            -       274 
 Balance as at 31 December 
  2020                                                50             743        (743)        50 
----------------------------------------  --------------  --------------  -----------  -------- 
 
 For the year ended 31 December 
  2019 
                                                                 Capital   Profit and 
                                           Share capital    contribution         loss     Total 
                                   Note          GBP'000         GBP'000      GBP'000   GBP'000 
--------------------------------  ------  --------------  --------------  -----------  -------- 
 Balance as at beginning of 
  the year                                            50             200        (200)        50 
 Loss after taxation                                   -               -        (269)     (269) 
 Capital contribution                                  -             269            -       269 
 Balance as at 31 December 
  2020                                                50             469        (469)        50 
----------------------------------------  --------------  --------------  -----------  -------- 
 
 Share capital represents the nominal value of the Company's Ordinary 
  Shares that have been issued. 
 The Capital contribution from Parent is to be utilised on current 
  and future obligations of the Company and may be not distributable 
  unless if required for the Company. 
 
 The notes form an integral part of these financial statements. 
 
 
 Statement of Cash Flows 
 For the year ended 31 December 
  2020 
                                                    Year ended        Year ended 
                                                   31 December       31 December 
                                                          2020              2019 
                                         Note 
--------------------------------------  -------  -------------  ---------------- 
 Operating activities 
 Result from operating activities                          156               141 
 Increase in capital contribution 
  relating to operating expenses                         (156)             (141) 
 Increase in receivables                                  (67)              (26) 
 Increase in other payables                                 67                26 
 Net cash flow from operating 
  activities                                                 -                 - 
--------------------------------------  -------  -------------  ---------------- 
 Increase in cash                                            -                 - 
 Opening balance                                            18                18 
--------------------------------------  -------  -------------  ---------------- 
 
 Closing Balance                                            18                18 
--------------------------------------  -------  -------------  ---------------- 
 
 * There was no cash inflow from investment income during 
  the year. 
 
 The notes form an integral part of these financial statements. 
  Notes to the financial statements 
 
  1. General information 
 
  RM ZDP Plc (the "Company") was incorporated in England and Wales 
   on 21 February 2018, with registered number 11217952 as a public 
   company limited by shares under the Companies Act. The Company has 
   a limited life, with a ZDP Shares Repayment Date of 6 April 2021, 
   unless early terminated or extended, as per provisions in the prospectus 
   dated 12 March 2018. The Company commenced its operations on 3 April 
   2018. 
  The Company's ZDP Shares were admitted to the Official List of the 
   UK Listing Authority with a standard listing on 3 April 2018 ("Admission"). 
   On the same day, trading of the Ordinary Shares commenced on the 
   London Stock Exchange. The registered office is 1st Floor, Senator 
   House, 85 Queen Victoria Street, London, EC4V 4AB. 
 
  2. Significant accounting policies 
 
  The principal accounting policies applied by the Company are set 
   out below: 
 
  (a) Basis of accounting 
   The financial statements have been prepared in accordance with international 
   accounting standards in conformity with the requirements of the 
   Companies Act 2006 ("IFRS") and the applicable legal requirements 
   of the Companies Act 2006. 
  (b) Going concern 
  Given that the Company is due to pay its final capital entitlement 
   to the ZDP Shareholders (110.91 pence per ZDP Share) on the ZDP 
   Repayment Date of 6 April 2021 and the Company will be placed into 
   voluntary liquidation and wound up thereafter, the Directors believe 
   that it would not be reasonable to adopt the going concern basis 
   in preparing the financial statements. The cost of liquidation will 
   be borne by the Parent Company as such provision for the estimated 
   liquidation costs has not been provided for. The accounts have been 
   prepared on a basis other than a going concern but the ZDP's shown 
   in the financial statements continue to be presented on an amortised 
   basis rather than a settlement basis. This is deemed appropriate 
   given the purpose of the Company being limited to the issuance of 
   ZDP shares. The capital entitlement attached to the ZDPs will continue 
   to be recognised until their maturity in April 2021. All other receivables 
   and cash are recognized at an equivalent to the realizable value 
   and payables at an equivalent to settlement value. 
 
  (c) Financial assets and liabilities at amortised cost-Loans made 
   by the Company and ZDP Shares 
  Loans made by the Company to its Parent are classified financial 
   assets at amortised cost. ZDP Shares have been classified as financial 
   liabilities at amortised cost. 
 
   Loans made by the Company and ZDP Shares are initially recognised 
   at cost, being the fair value of the consideration received or paid 
   associated with the loan or borrowing. Loans and ZDP Shares are 
   subsequently measured at amortised cost using the effective interest 
   method, less any impairment (for the loans). Interest income is 
   recognised by applying the effective interest rate. The loan will 
   be de-recognised when the company is no longer eligible for the 
   cash flows from it and the ZDPS will be de-recognised when they 
   are repaid. 
 
   The final capital entitlement to ZDP Shareholders will rank in priority 
   to the capital entitlement of the Ordinary Shares as such ZDP Shares 
   are classified as a liability. 
 
   The accounts have been prepared on a breakup basis but the figures 
   shown in the financial statements continue to be presented on an 
   amortised basis rather than a settlement basis given the purpose 
   of the Company being limited to the issuance of ZDP shares. 
  Impairment of assets - Financial assets at amortised cost and Trade 
   and other receivables are subject to impairment calculated under 
   the expected credit loss model within IFRS 9. 
 
  (d) Income 
   Interest income is recognised on accrual basis using the effective 
   interest rate method. 
  (e) Expenses 
   All expenses are accounted for on an accruals basis and recognised 
   in the Statement of Comprehensive Income. 
  (f) Taxation 
  The charge for taxation is based upon the net return for the period 
   using the applicable UK corporation tax rate for the reporting period. 
   It takes into account both deductible and non-deductible income 
   and expenses incurred in the reporting period. Deferred taxation 
   will be recognised as an asset or a liability if transactions have 
   occurred at the initial reporting date that give rise to an obligation 
   to pay more taxation in the future, or a right to pay less taxation 
   in the future. An asset will not be recognised to the extent that 
   the transfer of economic benefit is uncertain. 
 
  (g) Dividends 
  Interim dividends to the holders of shares are recorded in the Statement 
   of Changes in Equity on the date that they are paid. Final dividends 
   are recorded in the Statement of Changes in Equity when they are 
   approved by Shareholders. 
 
   (h) Judgement, estimates and assumptions 
    There are no judgement, estimate and assumptions for the Company 
    that would have a significant impact on the financial statements. 
 
    (i) Capital contribution 
  Capital contribution(s) from the Parent to meet current and future 
   obligations of the Company are recognised directly in equity. 
   (j) Segmental reporting 
  The Directors perform regular reviews of the operating results of 
   the Group as a whole and make decisions using financial information 
   at the Group level. The Board of Directors is of the view that the 
   Company is only engaged in one business segment. 
 
 

k) Adoption of new IFRS standards

A number of new standards, amendments to standards and interpretations are effective for the annual periods beginning after 1 January 2020. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company.

IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

As part of its 2018-2020 Annual Improvements to IFRS standards process, the IASB issued an amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. This amendment is unlikely to have any impact on the financial statements of the Company.

Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform

The amendments to IFRS7, IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. These amendments have no impact on the financial statements of the Company.

A number of new standards, amendments to standards and interpretations are not effective for the annual periods beginning after 1 January 2020 and have not been applied in preparing these financial statements and not expected to have a significant effect on the financial statements of the Company.

 
 3 Financial assets at amortised cost 
                                                         As at 31 December            As at 31 
                                                                      2020       December 2019 
                                                                   GBP'000             GBP'000 
---------------------------------------------------  ---------------------  ------------------ 
 Loan to Parent                                                     10,870              10,870 
 Investment income receivable                                          613                 383 
 Capital contribution receivable                                       459                 288 
 Closing balance                                                    11,942              11,541 
---------------------------------------------------  ---------------------  ------------------ 
 
    Intercompany Loan Agreement 
  On 29 March 2018, the Company entered into a Loan Agreement with 
   its Parent. Pursuant to the Loan Agreement, the Company lent the 
   entirety of the gross proceeds of the issue of ZDP Shares to its 
   Parent, which has been applied towards making investments in accordance 
   with its Investment Policy and for working capital purposes. 
 
  The Loan Agreement provides that, interest will accrue on the Loan 
   daily at a rate of 2% per annum, compounded annually on each anniversary 
   of Admission of the ZDP Shares and will be rolled up and paid to 
   the Company along with repayment of the principal amount of the Loan 
   to parent on the date falling 2 Business Days before the ZDP Repayment 
   Date, provided that the Loan to Parent shall become repayable by 
   the Parent immediately upon the passing of a Winding-Up Resolution. 
 
  Deed of Undertaking 
  The Company also entered into the Undertaking with the Parent , pursuant 
   to which, to the extent that the Final Capital Entitlement multiplied 
   by the number of outstanding ZDP Shares as at the ZDP Repayment Date 
   exceeds the aggregate principal amount and accrued interest due from 
   the Parent to the Company as at the Repayment Date, the Parent shall: 
   (i) subscribe an amount equal to or greater than the additional funding 
   Requirement for Subsidiary Ordinary Shares or (ii) make a capital 
   contribution or gift or otherwise pay an amount equal to or greater 
   than the additional funding requirement. 
 
 
 
 4. Taxation 
                                                            Year ended      Period ended 
                                                           31 December       31 December 
                                                                  2020              2019 
 Analysis of tax charge for the year                           GBP'000           GBP'000 
--------------------------------------------------  ------------------  ---------------- 
 Corporation tax                                                    29                24 
 Total tax charge for the year (see below 
  note)                                                             29                24 
--------------------------------------------------  ------------------  ---------------- 
 
 
   Factors affecting the tax charge for 
   the year: 
 The effective UK corporation tax rate for the year is 19% (2019:19%). 
  The tax charge for the year can be reconciled to the return on ordinary 
  activities in the Statement of Comprehensive Income as follows: 
 
                                                            Year ended      Period ended 
                                                           31 December       31 December 
                                                                  2019              2018 
                                                               GBP'000           GBP'000 
--------------------------------------------------  ------------------  ---------------- 
 Return on ordinary activities before 
  taxation                                                       (245)             (245) 
 UK corporation tax at 19%                                        (47)              (47) 
 Non-deductible expense                                             76                71 
--------------------------------------------------  ------------------  ---------------- 
 Total tax charge for the year                                      29                24 
--------------------------------------------------  ------------------  ---------------- 
  5. Basic and diluted loss per Ordinary Share 
 
 The calculation of loss per Ordinary Share is based on the net loss 
  for the year GBP274,000 (2019: GBP269,000) and a weighted average 
  number of 50,000 (2019:50,000) Ordinary Shares during the year. 
 6. Financial liabilities at amortised cost-Zero Dividend Preference 
  ('ZDP') Shares 
                                                As at 31 December         As at 31 December 
                                                             2020                      2019 
                                                          GBP'000                   GBP'000 
------------------------------------------  ---------------------  ------------------------ 
 Opening balance                                           11,541                    11,155 
 Accrued interest during the year                             401                       386 
 Closing balance                                           11,942                    11,541 
------------------------------------------  ---------------------  ------------------------ 
 
 Authorised 
 The maximum number of ZDP Shares to be issued pursuant to the Initial 
  ZDP Placing, as disclosed in the Prospectus dated 12 March 2018, 
  has been set at 20 million. At a general meeting of the Company held 
  on 7 March 2018, a special resolution was passed to issue up to 60 
  million ZDP Shares. 
 
 On 3 April 2018, the Company issued 10,869,950 ZDP Shares of a nominal 
  value of 1 pence each at a placing price of 100 pence each to raise 
  gross proceeds of GBP10,869,950, which were allotted and fully paid 
  up. The Parent Company incurred ZDP Shares issue cost of GBP129,000, 
  which has been amortised over the life of ZDP shares. 
 Rights attaching to the ZDP Shares 
 The ZDP Shares carry no right to receive dividends or other distributions 
  out of revenue or any other profits of the Company. 
 The ZDP Shares will have a life of 3 years and, on that basis, a 
  Final Capital Entitlement of 110.91 pence per ZDP Share on the ZDP 
  Repayment Date of 6 April 2021, equivalent to a Redemption Yield 
  of 3.5% per annum (compounded annually) on the Issue Price. 
 Under the obligations of Loan Agreement, the Ordinary Shares and 
  the C Shares of the Parent rank behind the ZDP Shares. 
 
 Voting rights of ZDP Shares 
 The ZDP Shareholders shall have the right to receive notice of all 
  general meetings of the Company for information purposes, but shall 
  have no right to attend or vote at any such meeting of the Company. 
  For the avoidance of doubt: 
 -- any resolution to alter, modify or abrogate the special rights 
  or privileges attached to the ZDP Shares shall require separate class 
  consent (by special resolution) at a class meeting of ZDP Shareholders 
  convened and held in accordance with the ZDP Articles (a "ZDP Class 
  Consent"); and 
 -- any ZDP Recommended Resolution or any resolution to approve a, 
  ZDP Reconstruction Proposal (if required) shall only be approved 
  by Company Ordinary Shareholders provided they have first been approved 
  by way of a ZDP Class Consent. 
 
 
 
 Variation of rights and Distribution on winding 
  up 
 Subject to the Companies Act, on a return of capital, on a winding-up 
  or otherwise, ZDP Shareholders will be entitled to receive an amount 
  equal to the Initial Capital Entitlement of 100 pence per ZDP Share, 
  increased at such daily accrual rate as compounds annually to give 
  a Final Capital Entitlement of 110.91 pence per ZDP Shares at the ZDP 
  Repayment Date of 6 April 2021, which is equivalent to a Redemption 
  Yield of 3.5% per annum (compounded annually). 
 The Final Capital Entitlement will rank behind any liabilities of the 
  Parent (including the liabilities to OakNorth under the RCF and in 
  priority to the capital entitlements of the Ordinary Shares and any 
  C Shares. The ZDP Shares carry no entitlement to income and the whole 
  of their return accordingly takes the form of capital. The ZDP Shareholders 
  are not entitled to receive any part of the revenue profits (including 
  any accumulated revenue reserves) of the Company on a winding-up, even 
  if the accrued capital entitlement of the ZDP Shares will not be met 
  in full. 
 

7. Auditor's remuneration

Audit fees in respect of the Company's financial statements for the year ended 31 December 2020 are GBP7,000 (2019: GBP7,000) (excludes VAT of GBP2,000).

 
 8. Share capital 
 Authorised 
                                      As at 31 December 2020      As at 31 December 2019 
 Allotted, issued and fully          Number of       Nominal     Number of       Nominal 
  paid:                                 shares       GBP'000        shares       GBP'000 
--------------------------------  ------------  ------------  ------------  ------------ 
 Ordinary Shares of GBP1 
  each                                  50,000            50        50,000            50 
--------------------------------  ------------  ------------  ------------  ------------ 
 
 On incorporation, the Company issued 50,000 Ordinary Shares of a nominal 
  value of GBP1.00 each which were subscribed by the Parent and fully 
  paid up. 
 
 Voting rights 
 The Company's ordinary shares held by the Parent are the only voting 
  shares in the Company, subject to certain matters which will require 
  ZDP Shareholder approval. 
 
 Ultimate controlling rights 
 The voting rights in the Company are wholly owned by RM Secured Direct 
  Lending Plc, a company incorporated and registered in England and 
  Wales, and is therefore the immediate and ultimate controlling party. 
 
 
 9. Net asset value ('NAV') / Capital entitlement per share 
 
                                               Attributable 
                              Shares in     to Shareholders    Capital entitlement       NAV per 
 As at 31 December 2020           issue           (GBP'000)          per share (p)     share (p) 
                            -----------  ------------------  ---------------------  ------------ 
 Ordinary Shares                 50,000                  50                    n/a        100.00 
 Zero Dividend Preference 
  Shares                     10,869,950              11,942                 109.86           n/a 
--------------------------  -----------  ------------------  ---------------------  ------------ 
                                               Attributable 
                              Shares in     to Shareholders    Capital entitlement       NAV per 
 As at 31 December 2019           issue           (GBP'000)          per share (p)     share (p) 
                            -----------  ------------------  ---------------------  ------------ 
 Ordinary Shares                 50,000                  50                    n/a        100.00 
 Zero Dividend Preference 
  Shares                     10,869,950              11,541                 106.18           n/a 
--------------------------  -----------  ------------------  ---------------------  ------------ 
 
 
 10. Related parties 
 
 As at the year end, the Parent Company held 50,000 Ordinary Shares 
  of GBP1 each in the Company. 
 On 29 March 2018, the Company entered into a Loan Agreement and 
  Undertaking with its Parent Company which are disclosed in note 
  3. 
 The Directors shall not be entitled to receive remuneration in respect 
  of their performance of their duties as Company's Directors nor 
  shall they be entitled to receive any expenses in relation to their 
  role of Company Directors. As at the year end, the Directors held 
  no shareholding in the Company. 
 
 
 11. Financial risk and capital management 
 
 The Board of Directors has overall responsibility for the oversight 
  of the Company's risk management framework. The objective of the 
  Company is to provide the Final Capital Entitlement of the ZDP Shares 
  to ZDP holders at the redemption date. Due to the Company's dependence 
  on Parent Company to repay the loan and provide contribution to meet 
  the final capital entitlement of the ZDP shareholders, the risks 
  faced by the Company are considered to be the same as Parent Company. 
  The Company has exposure to the following risk from its use of financial 
  instruments: 
 
        *    Credit risk 
 
        *    Liquidity risk 
 
        *    Interest rate risk 
 
 (i) Credit risks 
 Credit risk is the risk of the financial loss to the Company if a 
  counterparty to a financial instrument fails to meet its contractual 
  obligations and arises principally from the Loan Agreement and the 
  obligation of Parent Company under the Undertaking to subscribe for 
  such number of Ordinary Shares or otherwise ensure that Company is 
  able to pay the Final Capital Entitlement to ZDP Shareholders on 
  the ZDP Repayment date. Parent Company's credit risk is the risk 
  of financial loss if a counterparty to a debt instrument fails to 
  meet its contractual obligations. Parent Company and its investment 
  manager seek to mitigate Parent Company's credit risk by actively 
  monitoring Parent Company's portfolio of debt instruments and the 
  credit quality of the underlying borrowers. 
 The total value of balances subject to credit risk is GBP11,942,000(2019: 
  GBP11,541,000) being the receivables due to the parent Company. Loans 
  to the Parent Company have low credit risk as the Parent has a strong 
  capacity to meet its contractual cash flow obligations in the near 
  term. This has been assessed considering the net assets and revenue 
  forecasts of the Parent Company. Adverse changes in economic and 
  business conditions in the longer term are still unlikely to reduce 
  the ability of the Parent to fulfil its obligations. Having assessed 
  these factors and the credit-worthiness of the Parent Company, the 
  expected credit loss is not material. 
 (ii) Liquidity risks 
 Liquidity risk is the risk that the Company will not be able to meet 
  its financial obligations as they fall due. The most significant 
  cash outflow consists of the payment of the Final Capital Entitlement 
  to the ZDP holders at the ZDP Repayment Date of 6 April 2021. The 
  Company's exposure to liquidity risk depends upon Parent Company's 
  ability to meet all current and future obligations of the Company. 
  The Directors consider Parent Company's compliance with the Deed 
  of Undertaking (described in note 2 (b) above) and the capital contributions 
  received as sufficient in providing liquidity to the Company when 
  required. 
 

The ZDP Shares capital entitlement amount of GBP12,055,000 will be repayable on 6 April 2021.

 
 (iii) Interest rate risks 
 The interest rate applied on the Loan Agreement is fixed at 2% and 
  the interest rate payable on the ZDP shares is fixed at 3.5% compounded 
  and as such no sensitivity analysis is required. 
 
 Fair value estimation 
 The fair values of cash and cash equivalents and short-term debtors 
  and creditors are estimated to be approximately equal to their carrying 
  values due to their short-term nature. The fair values of the financial 
  assets at amortised cost due from the parent under the loan agreement 
  and undertaking are also estimated to be approximately equal to their 
  carrying values. The ZDP Shares are disclosed in this note for disclosures 
  purposes only under IFRS 13 "Fair Value Measurement" (IFRS 13). 
 The Directors based the fair value of the ZDP shares on the traded 
  price of 107.50 pence per share (2019: 105.50 pence per share) which 
  was observed on the London Stock Exchange on 31 December 2020 being 
  the last observable traded price before the year end. 
 Fair value hierarchy 
 IFRS 13 requires the Company to classify its investments in a fair 
  value hierarchy that reflects the significance of the inputs used 
  in making the measurements. IFRS 13 establishes a fair value hierarchy 
  that prioritises the inputs to valuation techniques used to measure 
  fair value. The three levels of fair value hierarchy under IFRS 13 
  are as follows: 
 Level 1 
 Inputs are quoted prices in active markets for identical assets or 
  liabilities that the entity can access at the measurement date. 
 
 Level 2 
 Inputs other than quoted market prices included within Level 1 that 
  are observable for the asset or liability, either directly or indirectly. 
 
 Level 3 
 Inputs are unobservable for the asset or liability. 
 
 The categorisation of a financial instrument within the hierarchy 
  is based upon the pricing transparency of the financial instruments 
  and does not necessarily correspond to the Company's perceived risk 
  inherent in such financial instruments. 
 The ZDP shares are classified within Level 1 of the fair value hierarchy 
  on the basis that the fair value was derived from an observable 
  traded price. 
 The classification of the Company's investments held at fair value 
  through profit or loss is detailed in the table below: 
 
 As at 31 December 2020                             Level 1     Level 2         Level 3 
                                                    GBP'000     GBP'000         GBP'000 
 Fair value 
 Financial liabilities at market value               11,685           - 
                                                ===========  ==========  ============== 
                                                    Level 1     Level 2         Level 3 
 As at 31 December 2019                             GBP'000     GBP'000         GBP'000 
 Fair value 
 Financial liabilities at market value               11,468           - 
                                                ===========  ==========  ============== 
 
 
 
 12. Subsequent events 
 
 There are no post balance sheet events since the year end. 
 
 
  13. Financial information 
 
  This announcement does not constitute the Company's statutory 
  accounts. The financial information is derived from the statutory 
  accounts, which will be delivered to the registrar of companies 
  and will be put forward for approval at the Company's Annual 
  General Meeting. The auditors have reported on the accounts 
  for the year ended 31 December 2020, their report was unqualified 
  and did not include a statement under Section 498(2) or (3) 
  of the Companies Act 2006. 
 
  The Annual Report for the year ended 31 December 2020 was 
  approved on 26 March 2020. It will be made available on the 
  Company's website at https://rmdl.co.uk/investor-centre/investor-relations/ 
 
  The Annual Report will be submitted to the National Storage 
  Mechanism and will shortly be available for inspection at: 
  https://data.fca.org.uk/#/nsm/nationalstoragemechanism 
 
  This announcement contains regulated information under the 
  Disclosure Rules and Transparency Rules of the FCA. 
 
  Secretary and registered office: 
  PraxisIFM Fund Services (UK) Limited 
  1st Floor, Senator House, 
  85 Queen Victoria Street, 
  London, 
  EC4V 4AB 
 
  For further information contact: 
  Brian Smith / Ciara McKillop 
  0204 513 9260 
 

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March 29, 2021 02:00 ET (06:00 GMT)

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