TIDMRMDZ TIDMRMDL
RNS Number : 5971P
RM ZDP PLC
11 June 2020
RM ZDP PLC
LEGAL ENTITY IDENTIFIER ('LEI'): 213800QYQTLY4A32F885
ANNUAL FINANCIAL REPORT ANNOUNCEMENT
For the year ended 31 December 2019
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 Period ended
31 December 31 December
2019 2018
------------------------------------------- ------------- -------------
Accrued capital entitlement per ZDP Share 106.18p 102.62p
ZDP Share redemption yield 3.5% 3.5%
CHAIRMAN'S STATEMENT
I am pleased to present the Company's Annual Report and accounts
for the year ended 31 December 2019 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 2019 the accrued capital entitlement per ZDP
Share was 106.18p and the share price per ZDP Share was
105.50p.
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.
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.
The Annual General Meeting of the Company will be held at 11:00
a.m. on 16 June 2020 at Seven Fields Farm, Netherfield, Battle,
East Sussex, TN33 9QH.
Norman Crighton
Chairman
10 June 2020
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 Mermaid House, 2 Puddle Dock, London EC4V 3DB.
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 GBP269,000 (2018: loss of
GBP200,000).
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 2019, the total accrued
capital entitlement is GBP11,541,000, equivalent to 106.18p 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
2019 was GBP11.5 million based on 10.9 million ZDP Shares and at a
share price of 105.5p per ZDP share.
Current and future developments
The current and future developments of the Company are set out
in the Chairman's statement 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 2019 were GBP131 million.
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 financial statements in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS") and applicable law. Under company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company as at the end of the year and of the net
return for the year. In preparing these accounts, the Directors are
required to:
-- 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
10 June 2020
Statement of Comprehensive Income
For the year ended 31 December 2019
Year ended Period ended
31 December 31 December
2019 2018
Note GBP'000 GBP'000
----------------------------------------------- ----- ------------- -------------
Income
Investment income 3 220 163
Administrative expenses (79) (58)
Result from operating activities 141 105
Finance costs 6 (386) (285)
Loss before taxation (245) (180)
Taxation 4 (24) (20)
Loss after taxation (269) (200)
----------------------------------------------- ----- ------------- -------------
Return per Ordinary Share (pence) (5.38p) (4.00p)
----------------------------------------------- ----- ------------- -------------
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.
Statement of Financial Position
As at 31 December As at 31 December
2019 2018
Note GBP'000 GBP'000
-------------------------------------------- ------- -------------------- ------------------------
Non-current assets
Financial assets at amortised
cost 3 - 11,155
Total non-current assets - 11,155
-------------------------------------------- ------- -------------------- ------------------------
Current assets
Financial assets at amortised
cost 3 11,541 -
Cash and cash equivalents 18 18
Trade and other receivables 105 79
Total current assets 11,664 97
-------------------------------------------- ------- -------------------- ------------------------
Total assets 11,664 11,252
-------------------------------------------- ------- -------------------- ------------------------
Current liabilities
Trade and other payables (73) (47)
Zero Dividend Preference Shares 6 (11,541) -
-------------------------------------------- ------- -------------------- ------------------------
Total current liabilities (11,614) (47)
-------------------------------------------- ------- -------------------- ------------------------
Non-current liabilities
Zero Dividend Preference Shares 6 - (11,155)
Total non-current liabilities - (11,155)
-------------------------------------------- ------- -------------------- ------------------------
Total liabilities (11,614) (11,202)
-------------------------------------------- ------- -------------------- ------------------------
Net assets 50 50
-------------------------------------------- ------- -------------------- ------------------------
Capital and reserves: equity
Share capital 8 50 50
Capital contribution 469 200
Profit and loss reserve (469) (200)
Total Shareholders' funds 50 50
-------------------------------------------- ------- -------------------- ------------------------
NAV per share - Ordinary Shares
(pence) 9 100.00p 100.00p
Capital Entitlement - ZDP Shares
(pence) 9 106.18p 102.62p
-------------------------------------------- ------- -------------------- ------------------------
The financial statements of the Company were approved and authorised
for issue by the Board of Directors on 10 June 2020 and signed
on their behalf by:
Norman Crighton
Director
The Company is registered in England and Wales with registered
company number 11217952.
Statement of Changes in Equity
For the year ended 31 December
2019
Capital Profit and
Share capital contribution loss Total
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
2019 50 469 (469) 50
-------------------------------- ----- -------------------- ----------------- ----------- ----------
For the period from incorporation on 21 February
2018 to 31 December 2018
Capital Profit and
Share capital contribution loss Total
Note GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ----- -------------------- ----------------- ----------- ----------
Balance as at beginning
of the period - - - -
Loss after taxation - - (200) (200)
Capital contribution - 200 - 200
Issue of Ordinary Shares 8 50 - - 50
Balance as at 31 December
2018 50 200 (200) 50
-------------------------------- ----- -------------------- ----------------- ----------- ----------
Share capital represents the nominal value of the Company's Ordinary
Shares that have been issued.
The Capital contribution from the Parent has not been received in
cash and therefore it is not distributable. Capital contribution also
includes Company's operating expenses paid by the Parent.
Statement of Cash Flows
For the year ended 31 December
2019
Year ended Period ended
31 December 31 December
2019 2018
Note GBP'000 GBP'000
------------------------------------ ------ ------------- -------------
Operating activities
Result from operating activities 141 105
Increase in capital contribution
relating to operating expenses (141) (200)
(Increase)/decrease in receivables (26) 43
Increase in other payables 26 20
Net cash flow from operating
activities - (32)
-------------------------------------------- ------------- -------------
Investing activities
Loans to Parent Company - (10,870)
Net cash flow used in investing
activities (10,870)
-------------------------------------------- ------------- -------------
Financing activities
Proceeds from issue of ZDP
shares - 10,870
Share issue proceeds - 50
Net cash flow from financing
activities - 10,920
-------------------------------------------- ------------- -------------
Increase in cash - 18
Opening balance 18 -
------------------------------------ ------ ------------- -------------
Closing Balance 18 18
-------------------------------------------- ------------- -------------
* There was no cash inflow from investment income during
the year.
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 premium 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 Mermaid House, 2
Puddle Dock, London, EC4V 3DB.
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
Financial Reporting Standard ('IFRS') as adopted by the European
Union and in accordance with Article 4 of the IAS Regulation and
the Companies Act 2006 as applicable to companies using IFRS. These
financial statements are prepared on a basis other than a going
concern.
(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 there 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 Capital contribution.
(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.
3 Financial assets at amortised cost
As at 31 December As at 31 December
2019 2018
GBP'000 GBP'000
-------------------------------------- ------------------- -------------------
Loans to Parent 10,870 10,870
Investment income receivable 383 163
Capital contribution receivable 288 122
Closing balance 11,541 11,155
-------------------------------------- ------------------- -------------------
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 ZDP
Loan on the date falling 2 Business Days before the ZDP Repayment
Date, provided that the ZDP Loan (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
2019 2018
Analysis of tax charge for the year/period GBP'000 GBP'000
---------------------------------------------- -------------- --------------
Corporation tax 24 20
Total tax charge for the year/period
(see below note) 24 20
---------------------------------------------- -------------- --------------
Factors affecting the tax charge for
the year/period:
The effective UK corporation tax rate for the year is 19% (2018:19%).
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) (180)
UK corporation tax at 19% (47) (34)
Non-deductible expense 71 54
---------------------------------------------- -------------- --------------
Total tax charge for the year/period 24 20
---------------------------------------------- -------------- --------------
5. Basic and diluted loss per Ordinary Share
The calculation of loss per Ordinary Share is based on the net loss
for the year GBP269,000 (2018: GBP200,000) and a weighted average
number of 50,000 (2018:50,000) Ordinary Shares during the year.
6. Financial liabilities at amortised cost-Zero Dividend Preference
('ZDP') Shares
As at 31 December As at 31 December
2019 2018
GBP'000 GBP'000
----------------------------------------- ------------------- ----------------------
Opening balance 11,155 -
ZDP Shares issued - 10,870
Accrued interest during the year/period 386 285
Closing balance 11,541 11,155
----------------------------------------- ------------------- ----------------------
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 period ended 31 December 2019 are GBP7,000 (2018: GBP7,000)
(excludes VAT of GBP2,000). During the year no non-audit fees were
incurred by the Company.
8. Share capital
Authorised
As at 31 December 2019 As at 31 December 2018
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 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
--------------------------- -------------- -------------------- ----------------------- ------------
Attributable
Shares in to Shareholders Capital entitlement NAV per
As at 31 December 2018 issue (GBP'000) per share (p) share (p)
-------------- -------------------- ----------------------- ------------
Ordinary Shares 50,000 50 n/a 100.00
Zero Dividend Preference
Shares 10,869,950 11,155 102.62 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 GBP11,542 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 creditworthiness 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 GBP105.50 pence per share which was observed on the London
Stock Exchange on 31 December 2019 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 2019 Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000
Fair value
Financial liabilities at market value 11,468 -
=========== ========== ==============
Level 1 Level 2 Level 3
As at 31 December 2018 GBP'000 GBP'000 GBP'000
Fair value
Financial liabilities at market value 11,142 -
=========== ========== ==============
12. Subsequent events
The recent outbreak of Covid-19 is a non-adjusting post balance
sheet event. Covid-19 is not expected to have a material impact
on the Company's financial position or operations as the main
risk to the Company is that financial support will not be
forthcoming from the Company's parent, RM Secured Direct Lending
PLC, when required. The impact of Covid-19 on the Company's
parent has been assessed and is disclosed in the parent's
annual report and accounts. The increased risk caused by Covid-19
has had a material impact on the Parent Company's investment
portfolio but did not impact the Parent Company's ability
to continue as a going concern or provide financial support
to the Company.
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 2019, 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 2019 was
approved on 10 June 2020. It will be made available on the
Company's website at https://rmdl.co.uk/
The Annual Report will be submitted to the National Storage
Mechanism and will shortly be available for inspection at:
http://www.morningstar.co.uk/uk/NSM
This announcement contains regulated information under the
Disclosure Rules and Transparency Rules of the FCA.
14. Annual General Meeting
The Annual General Meeting of RM ZDP Plc will be held at Seven
Fields Farm, Netherfield, Battle, East Sussex, TN33 9QH on
16 June 2020 at 11:00 a.m.
Secretary and registered office:
PraxisIFM Fund Services (UK) Limited
Mermaid House
2 Puddle Dock
London
EC4V 3DB
For further information contact:
Brian Smith / Ciara McKillop
PraxisIFM Fund Services (UK) Limited
Tel: 020 7653 9690
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SFMFWSESSEDM
(END) Dow Jones Newswires
June 11, 2020 02:00 ET (06:00 GMT)
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