TIDMRDLZ
RNS Number : 4406B
RDLZ Realisation PLC
07 June 2019
RDLZ REALISATION PLC (FORMERLY RANGER DIRECT LING ZDP PLC)
(Registered No. 10247619)
FOR THE YEARED 31 DECEMBER 2018
RDLZ (the "Company") announces that it has published its Annual
Report and Accounts 2018. Copies of the Annual Report and Accounts
and the Notice of the 2018 Annual General Meeting are available to
view on the Company's website at
https://rdlrealisationplc.co.uk/zdp or by contacting the Company
Secretary on 01392 477500. They have also been submitted to the
National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM.
The Company also announces that it will hold its Annual General
Meeting at 2.30pm on Tuesday, 9 July 2019 at the offices of Travers
Smith LLP, 10 Snow Hill, London, EC1A 2AL.
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 31 December 2018
but is derived from those accounts. Statutory accounts for 31
December 2018 will be delivered to the Companies House following
the Company's Annual General Meeting.
The unedited full text of those parts of the Annual Report and
Accounts for the year ended 31 December 2018, which require to be
published are set out below.
CHAIRMAN'S STATEMENT
I am pleased to present the Annual Report and Accounts for the
year ended 31 December 2018 for RDLZ Realisation Plc (the "Company"
or "RDLZ"), (formerly Ranger Direct Lending ZDP Plc).
The Company is a wholly-owned subsidiary of RDL Realisation Plc
("RDL") (formerly Ranger Direct Lending Fund Plc) and was
established solely for the purpose of issuing zero dividend
preference shares of GBP 0.01 each in the capital of the Company
("ZDP Shares").
Since incorporation, the Company has carried out two placings of
ZDP Shares, issuing a total of 53 million ZDP Shares for aggregate
gross proceeds of GBP 53.8 million. The entirety of these gross
proceeds were lent to RDL pursuant to the terms of a loan agreement
between the Company and RDL dated 25 July 2016 (the "Loan" and the
"Loan Agreement"). The proceeds of the Loan are required to be
utilised in accordance with RDL's investment policy and for working
capital purposes.
The current year loss is GBP 2,249,755 (2017: GBP
2,037,983).
As a condition of the Loan Agreement, RDL was required to grant
an undertaking in favour of the Company dated 25 July 2016 (the
"Undertaking") pursuant to which RDL undertook to subscribe for
such number of Ordinary Shares of GBP 1.00 each in the capital of
the Company ("Ordinary Shares") as would be necessary (or to
otherwise ensure) so that the Company has sufficient funds to pay
the final capital entitlement of GBP 1.2763 per ZDP Share (the
"Final Capital Entitlement") to the ZDP Shareholders on 31 July
2021 (the "ZDP Repayment Date"), giving a redemption yield of 5%,
on an issue price of GBP 1.00 per ZDP Share (the "Redemption
Yield1").
(1) The Redemption Yield is not and should not be taken as a
forecast of profits and there can be no assurance that the Final
Capital Entitlement of the ZDP Shares will be repaid in full on the
ZDP Repayment Date.
In June 2018, the RDL Board announced its intention to dispose
of its assets in an orderly manner and return shareholders' capital
to them and adequately reimburse the ZDP Shareholders on or before
31 July 2021.
On 3 June 2019, the Company announced that the ZDP Committee of
RDL and the Board of the Company have finalised the terms of a
proposal (the "Proposal") pursuant to which, subject to required
approvals by holders of ZDP Shares (the "ZDP Shareholders"):
-- the Board and the RDL Board will take the steps necessary to
place the Company into a members' voluntary winding up on a new ZDP
Repayment Date, which will be 20 June 2019; and
-- ZDP Shareholders will receive a Final Capital Entitlement of
121.8887 pence per ZDP Share (the "Revised Final Capital
Entitlement").
The Proposal is conditional upon the approval by ZDP
Shareholders of special resolutions at a class meeting. A circular
convening such a class meeting of ZDP Shareholders to be held on 20
June 2019 (the "ZDP Class Meeting") to consider, and if thought
fit, approve the special resolutions required to implement the
Proposal has been published and sent to the ZDP Shareholders.
The Company and RDL have received undertakings to vote in favour
of the resolutions to be proposed at the ZDP Class Meeting from
holders of approximately 64.5 per cent. of the total number of ZDP
Shares in issue. RDL does not propose to vote the 7,278,193 ZDP
Shares held by it in relation to the Proposal, representing
approximately 13.7 per cent. of the total number of ZDP Shares in
issue.
As a result of the above early repayment, the Company is
expected to incur a loss on derecognition of the ZDP Shares of GBP3
million.
The key performance indicators against which the Board has
reviewed the Company's performance are set out below. Most
significantly, the Cover (defined below) as at 31 December 2018 was
2.46 times. I note that this is below the threshold of 2.75 below
which RDL cannot make further dividend distributions other than the
minimum required to maintain RDL's status as an investment trust.
This reduction in cover to move below the threshold was brought
about by a number of additional write-offs following a full
portfolio revaluation. Whilst the reduction in Cover is concerning,
the fact that RDL has carried out a full portfolio valuation, now
holds very large cash reserves and cannot make further dividend
distributions other than the minimum required to maintain its
status as an investment trust should satisfy investors that
sufficient assets will be available to repay the ZDP Shareholders
in full when required to do so.
From the perspective of the Directors, the Company's activities
are integrated with the RDL Group. The RDL Annual Report for 2018
will be found on RDL's website https://rdlrealisationplc.co.uk,
following it's release to the market.
Brendan Hawthorne
Chairman
6 June 2019
BOARD OF DIRECTORS
The Directors who held office during the financial year and up
to the date of approval of this report were:
Brendan Hawthorne (Chairman) (Independent Non-Executive
Director) appointed on 26 July 2018
Mr Hawthorne has more than 20 years' experience as a specialist
in financial investigations and asset recovery. He has extensive
multi-jurisdictional experience including acting as an independent
director of substantial onshore and offshore investment funds. He
is a Chartered Accountant and Certified Fraud Examiner.
Joe Kenary (Independent Non-Executive Director) appointed on 4
December 2018
Mr Kenary graduated from Harvard College in 1986 and also holds
an MBA from UCLA Anderson School of Management. He began his career
in private equity investing and since then has developed
significant direct lending experience, as the first employee of
Capitalsource Inc. a commercial finance business that evolved to
become a publicly traded commercial bank with assets in excess of
$10 billion. He was also a senior executive of Alliance Partners, a
US based asset manager and commercial lender that specialised in
the acquisition and management of commercial loans for community
banks.
The Directors who held office during the financial year
were:
Jonathan Schneider (Independent Non-Executive Director)
Appointed on 23 June 2016, resigned on 12 November 2018.
Christopher Waldron (Chairman) (Independent Non-Executive
Director)
Appointed on 23 June 2016, resigned on 19 June 2018.
Dr Matthew Mulford (Independent Non-Executive Director)
Appointed on 23 June 2016, resigned on 19 June 2018.
STRATEGIC REPORT AND OTHER STATUTORY INFORMATION
The Strategic Report has been prepared in accordance with
Section 414A of the Companies Act 2006 (the "Act"). Its purpose is
to inform members of the Company and help them understand how the
Directors have performed their duty under Section 172 of the
Act.
The Company, which changed its name on 26 February 2019, was
incorporated and registered in England and Wales on 23 June 2016 as
a wholly-owned subsidiary of RDL. The Company has a capital
structure comprising of unlisted Ordinary Shares and listed ZDP
Shares.
On 1 August 2016, the Company placed 30 million ZDP Shares at a
placing price of GBP 1.00 per ZDP Share. The Company was admitted
to the standard segment of the Official List of the UK Listing
Authority and the entirety of the Company's issued ZDP Share
capital was admitted to trading on the London Stock Exchange's main
market for listed securities (the "Admission"). A further 23
million ZDP Shares were issued at a placing price of GBP 1.035 per
Share and admitted to trading on 4 November 2016 (the "Subsequent
Admission").
The Company's Ordinary Share capital is wholly-owned by RDL.
Pursuant to the terms of a Loan Agreement, the Company loaned
the entirety of the gross proceeds of the issue of ZDP Shares to
RDL upon Admission and Subsequent Admission (as applicable). As a
condition of entering into the loan agreement, RDL was required to
grant the Company the Undertaking. In accordance with the terms of
the Undertaking, RDL is required to (among other things) subscribe
for such number of Ordinary Shares in the Company as may be
necessary to ensure (or to otherwise ensure) that the Company has
sufficient assets to pay the Final Capital Entitlement to the ZDP
Shareholders on the ZDP Repayment Date and to pay any operational
costs incurred by the Company.
From the perspective of the Directors, the Company's activities
are integrated with RDL and its subsidiaries (the "Group") as
explained in the Chairman's Statement.
Principal activities
The Company is a wholly owned subsidiary of RDL and was
incorporated by RDL for the sole purpose of issuing the ZDP Shares.
The Company's only material financial obligations are in respect of
the ZDP Shares. The proceeds from the issuance of the ZDP Shares
were on-lent to RDL pursuant to the Loan Agreement. These proceeds
along with the obligation of RDL, pursuant to the Undertaking
granted in favour of the Company to put the Company in a position
to meet its obligations in respect of the ZDP Shares, form the
Company's only material assets.
During the year, RDL purchased a total of 7,278,193 ZDP
Shares.
On 11 June 2018, the RDL Board announced its intention to
dispose of its assets in an orderly manner and return Shareholders'
capital to them and adequately reimburse the ZDP Shareholders on or
before 31 July 2021.
Given these developments and the intention to wind down the
Company, the use of the going concern basis in preparing the
financial statements of the Company is not considered to be
appropriate. As such, the financial statements have been prepared
on a basis other than that of a going concern, with assets being
measured at their net realisable value. There were no adjustments
made to the carrying values of the assets of the Company as a
result of this change in the basis of preparation, because the
Directors' consider the carrying value of assets to approximate
their net realisable value.
No provision has been made for the costs of winding up the
Company as these will be charged to the income statement on an
accruals basis as they are incurred or the Company becomes
obligated to make such payments in the future.
Objective
The objective of the Company is to provide the Final Capital
Entitlement of the ZDP Shares to the ZDP holders on the ZDP
Repayment Date of 31 July 2021. The funds are managed in accordance
with the investment policy of RDL, which has announced its
intention to dispose of its assets in an orderly manner and return
shareholders' capital to them and adequately reimburse the ZDP
Shareholders on or before 31 July 2021.
Important events and financial performance
The current year loss is GBP 2,249,775 (2017: GBP
2,037,983).
The Board reviews the performance of the Company by reference to
a number of key performance indicators ("KPIs") and considers that
the most relevant KPIs in assessing the Company's success towards
achieving its objective are as follows:
-- Accrued capital entitlement - represents the Company's
liability per ZDP share. As at 31 December 2018, the total accrued
capital entitlement was GBP59,309,524.
-- Cover(2) - measures the ability of RDL to meet the Company's
Final Capital Entitlement based on RDL's net asset value.
-- Share Price of ZDP Shares(3) - the price at which each ZDP
Share can be sold on the London Stock Exchange.
The ZDP Shares' Cover as at 31 December 2018 was 2.46 times (31
December 2017: 3.19 times).
As at 31 December 2018, the capital entitlement which had
accrued on the ZDP Shares was GBP 1.1184 per ZDP Share (31 December
2017: GBP 1.0634 per ZDP Share). The Final Capital Entitlement is
GBP 1.2763 per ZDP Share (payable on the ZDP Repayment
Date).(4)
(2) Cover of the ZDP Shares shall represent a fraction where the
numerator is equal to the Net Asset Value of RDL and its Group on a
consolidated basis (adjusted to: (i) add back any liability to ZDP
Shareholders; and (ii) deduct the estimated liquidation costs of
the Company) and the denominator is equal to the amount which would
be paid on the ZDP Shares as a class (and on all ZDP Shares ranking
as to capital in priority thereto or pari passu therewith, save to
the extent already taken into account in the calculation of the Net
Asset Value) in a winding up of the Company on the ZDP Repayment
Date. The calculation of the Cover has been adjusted to deduct
7,278,193 ZDP Shares held by RDL from the total outstanding ZDP
Shares to determine the ZDP redemption amount due on 31 July
2021.
(3) Share Price taken from Bloomberg Professional.
(4) There can be no assurance that the Final Capital Entitlement
of the ZDP Shares will be repaid in full on the ZDP Repayment
Date.
The ZDP Shares carry no right to income and the whole of their
return, therefore takes the form of capital.
The Redemption Yield of the ZDP Shares is 5% per annum based on
an issue price of GBP 1.00 per ZDP Share and is deemed to accrue
daily and is compounded annually from 1 August 2016 up to (but
excluding) the ZDP Repayment Date. The Final Capital Entitlement
will rank in priority to the capital entitlement of RDL's ordinary
shares, however, the loan made by the Company to RDL is unsecured
and therefore the Company will rank behind any secured creditors of
RDL. As such, there can be no guarantee that the Final Capital
Entitlement will be paid.
Further KPIs for RDL can be found in RDL's Annual Report.
The Company's market capitalisation as of 31 December 2018 was
GBP 61.480 million (31 December 2017: GBP 53.994 million) based on
53,000,000 ZDP Shares at a Share Price of 116.0 pence (31 December
2017: 101.875 pence) per ZDP Share.
Current and future developments
The current and future developments of the Company are set out
in the Chairman's Statement above and can also be reviewed as part
of the Group's activities by reference to RDL'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 RDL 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 RDL'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 RDL are described in its Annual Report.
In addition, the Company is also focused on the following
principal risk:
Principal risk Mitigation Link to KPI
Final Capital Entitlement
--------------------------- -------------------------------------------------------------- ------------
RDL's debt to the To protect the interests of ZDP Cover
Company pursuant to Shareholders, the Undertaking
the Loan Agreement contains the following restrictions:
and RDL's obligations * Group incurring any bank borrowings which would
under the Undertaking exceed an amount equal to the sum of:
will rank behind any
secured creditors
of RDL therefore it (a) 20% of the prevailing Net
is not guaranteed Asset Value attributable to the
that the Final Capital RDL Ordinary Shares in issue
Entitlement will be as at 1 August 2016; plus
paid. (b) an amount equal to 50% of
the net proceeds of any issue
of RDL C Shares.
* RDL making any distribution of capital or income,
other than any such distribution which:
(a) is required to maintain RDL's
status as an Investment Trust;
or
(b) would not reduce the Cover
of the ZDP Shares below 2.75
times immediately after the distribution
has been made.
The Cover as at 31 December 2018 was 2.46 times. This is below
the threshold of 2.75 below which RDL cannot make further dividend
distributions other than the minimum required to maintain RDL's
status as an investment trust. This reduction in cover to move
below the threshold was brought about by a number of additional
write-offs following a full portfolio revaluation.
Whilst the reduction in cover represents an increased risk, the
fact that RDL has carried out a full portfolio valuation, now holds
very large cash reserves and cannot make further dividend
distributions other than the minimum required to maintain its
status as an investment trust mitigates the risk that RDL will not
hold sufficient assets to repay the ZDP Shareholders in full when
required to do so.
Employees, environmental, human rights and community issues
The Board recognises the requirement under Section 414C of the
Act to detail information about employees, human rights and
community issues, including information about any policies it has
in relation to these matters and the effectiveness of these
policies.
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' Report) Regulations 2013, including those within
RDL's underlying investment portfolio.
The Company has no employees and the Board is comprised entirely
of Non-Executive Directors who are also directors of RDL. The
Company itself has no environmental, human rights or community
policies. However, in carrying out its activities in relation with
its suppliers, by way of RDL, the Company aims to conduct itself
responsibly, ethically and fairly.
Gender diversity
At the end of the financial year, the Company had two male
directors. The Board considers the current structure, size and
composition of the Board to be appropriate, taking into account the
challenges and opportunities facing the Company. The Directors are
committed to diversity and are supportive of increased gender
diversity but recognise that it may not always be in the best
interests of Shareholders to prioritise this above other factors.
In considering future candidates, appointments will be made with
regard to a number of different criteria, including diversity of
gender, background and personal attributes, alongside the
appropriate skills, experience and expertise.
The Directors are satisfied that the Board currently contains
members with an appropriate breadth of skills and experience. No
new appointments to the Board have been made or are contemplated at
present.
On behalf of the Board
Brendan Hawthorne
Chairman
6 June 2019
The following disclosures are extracted from the Directors'
Report of the Annual Report and are repeated here solely for the
purpose of complying with DTR 6.3.5.
Capital Structure
As at 31 December 2018, the issued share capital of the Company
comprised 569,430 Ordinary Shares of GBP 1.00 each (representing
51.8% of the Company's issued share capital), and 53,000,000 ZDP
Shares of GBP 0.01 each (representing 48.2% of the Company's issued
share capital), all of which are fully paid. The Ordinary Shares of
the Company are not admitted to trading on a regulated market. The
Company's Articles permit the Board to issue or buy back shares,
however, no authority to buy back shares has yet been sought from
Shareholders. The Company has therefore not bought back any shares
during the year.
Issue of shares
The Company issued 519,430 Ordinary Shares to RDL on 18 December
2018 at GBP 1.00 each.
Corporate Governance
It is the responsibility of the Board to ensure that there is
effective stewardship of the Company's affairs. The Company has a
Standard Listing on the London Stock Exchange therefore the Company
is not obliged to comply with the UK Corporate Governance Code (the
"Governance Code"), nor does the Company intend to comply with the
Governance Code on a voluntary basis. However, the Board are
committed to appropriately high standards of Corporate
Governance.
As such, the Board meets regularly to consider RDL's compliance
with the terms of the loan and the undertaking, based on reports
from RDL. The Board also considers the Company's interim and annual
reports. The Board met regularly during the year and all Directors
in office at the time of each meeting attended.
The Directors believe that the Board has an appropriate balance
of skills and experience to enable it to provide effective
leadership and proper governance of the Company. Information on
each of the current Directors, including their relevant experience
is set out above.
Given the nature of the Company's business and the number of
Directors, the Board has not established separate committees and
instead deals with all business as a full Board.
Main features of the Company's internal control and risk
management systems in relation to the financial reporting
process
The Board of Directors is responsible for establishing and
maintaining adequate internal control and risk management systems
of the Company in relation to the financial reporting process. Such
systems are designed to manage rather than eliminate the risk of
error or fraud in achieving the Company's financial reporting
objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss.
The Board has contracted with Sanne Fiduciary Group, as
Administrator of the Company, to put procedures in place to ensure
all relevant accounting records are properly maintained and are
readily available, including production of annual financial
statements. The annual financial statements of the Company are
required to be approved by the Board of the Company and audited by
the independent auditor who report annually to the Board on its
findings. The Board evaluates and discusses significant accounting
and reporting issues as the need arises.
Going Concern and Viability Statements
On 11 June 2018, the RDL Board announced its intention to
dispose of its assets in an orderly manner and return Shareholders'
capital to them and adequately reimburse the ZDP Shareholders by 31
July 2021.
On 3 June 2019, the Company announced that the ZDP Committee of
RDL and the Board of the Company have finalised the terms of a
proposal (the "Proposal") pursuant to which, subject to required
approvals by holders of ZDP Shares (the "ZDP Shareholders"):
-- the Board and the RDL Board will take the steps necessary to
place the Company into a members' voluntary winding up on a new ZDP
Repayment Date, which will be 20 June 2019; and
-- ZDP Shareholders will receive a Final Capital Entitlement of
121.8887 pence per ZDP Share (the "Revised Final Capital
Entitlement").
The Proposal is conditional upon the approval by ZDP
Shareholders of special resolutions at a class meeting. A circular
convening such a class meeting of ZDP Shareholders to be held on 20
June 2019 to consider, and if thought fit, approve the special
resolutions required to implement the Proposal has been published
and sent to the ZDP Shareholders.
The Company and RDL have received undertakings to vote in favour
of the resolutions to be proposed at the ZDP Class Meeting from
holders of approximately 64.5 per cent. of the total number of ZDP
Shares in issue. RDL does not propose to vote the 7,278,193 ZDP
Shares held by it in relation to the Proposal, representing
approximately 13.7 per cent. of the total number of ZDP Shares in
issue.
As a result of the above early repayment, the Company is
expected to incur a loss on derecognition of the ZDP Shares of GBP3
million.
Given these developments and the intention to wind down the
Company, the use of the going concern basis in preparing the
financial statements of the Company is not considered to be
appropriate. As such the financial statements have been prepared on
a basis other than that of a going concern, under which assets are
measured at their net realisable value. There were no adjustments
made to the carrying values of the assets and liabilities of the
Company as a result of this change in the basis of preparation,
because the Directors consider the carrying value of assets to
approximate their net realisable value.
No provision has been made for the costs of winding up the
Company as these will be charged to the income statement on an
accruals basis as they are incurred or the Company becomes
obligated to make such payments in the future.
The Directors believe that the Company and RDL have adequate
resources to continue in operational existence until the
anticipated liquidation of the Company. The RDL Board intends that
sufficient liquidity is held back at all times to ensure that all
liabilities, including those owed to ZDP Shareholders, are at all
times adequately covered.
The Directors have assessed the prospects of the Company up to
the ZDP Repayment Date of 31 July 2021. The Directors believe this
period to be appropriate as they will subsequently be required by
the Articles to pass a special resolution in a general meeting and
at a class meeting of ZDP Shareholders to place the Company into
voluntary liquidation. Should the Company be wound up before then,
RDL have indicated that they currently have sufficient liquidity to
repay the loan with existing cash resources.
The Board has reviewed the going concern and viability
statements of RDL, which can be found in the Strategic Report of
RDL's Annual Report and has assessed that RDL has sufficient
resources to fulfil its obligations to the Company. The key
assumptions made include having adequate Cover for the Final
Capital Entitlement as at that date and cash flow forecast for the
Company's general and administrative costs.
Based on the Directors' evaluation of these factors, they
concluded that there is a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities as
they fall due up to the final repayment date.
The following responsibility statement is extracted from the
Annual Report and is repeated here solely for the purpose of
complying with DTR 6.3.5. This statement does not relate to the
extracted information presented in the annual financial report
announcement.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law they have
elected to prepare the financial statements in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS").
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 and of the profit or
loss of the Company for that period. In preparing these financial
statements, the Directors are required to:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business. As explained in note 2 to the financial
statements, the Directors do not believe the going concern basis to
be appropriate for the preparation of the financial statements of
the Company and accordingly the financial statements of the Company
have not been prepared on a going concern basis.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's and Stock Exchange websites. Legislation in the UK
governing the preparation and dissemination of financial statements
may differ from the legislation in other jurisdictions.
Responsibility statement
We, being Directors, as detailed above, hereby confirm to the
best of our knowledge that:
-- the financial statements, prepared in accordance with IFRS,
give a true and fair view of the assets, liabilities, financial
position and loss of the Company;
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that they face; and
-- the Annual Report, taken as a whole, includes a fair review
of the development and performance of the business and the position
of the Company, together with a description of the principal risks
and uncertainties.
This responsibility statement was approved by the Board of
Directors on 6 June 2019 and is signed on behalf of the Board.
Brendan Hawthorne
Chairman
6 June 2019
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF RDLZ REALISATION
PLC
(FORMERLY KNOWN AS RANGER DIRECT LING ZDP PLC)
Report on the audit of the financial statements
Opinion
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In our opinion the financial statements of RDLZ Realisation Plc:
* give a true and fair view of the state of the
company's affairs as at 31 December 2018 and of its
loss for the year then ended;
* have been properly prepared in accordance with
International Financial Reporting Standards (IFRSs)
as adopted by the European Union; and
* have been prepared in accordance with the
requirements of the Companies Act 2006
-------------------------------------------------------------------------------------------------
We have audited the financial statements which comprise:
-------------------------------------------------------------------------------------------------
* the statement of comprehensive income;
* the balance sheet;
* the statement of changes in equity;
* the cash flow statement; and
* the related notes 1 to 14.
The financial reporting framework that has been applied in their
preparation is applicable law and IFRSs as adopted by the European
Union.
Basis for opinion
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We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor's
responsibilities for the audit of the financial statements
section of our report.
We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard
as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements. We confirm that the non-audit services
prohibited by the FRC's Ethical Standard were not provided
to the company.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Summary of our audit approach
Key audit matters The key audit matter that was identified in the
current year was the accuracy
of the calculation of interest income on the loan
instrument provided
to RDL Realisation Plc (formerly known as Ranger
Direct Lending Fund Plc).
Materiality The materiality that we used for the company
financial statements was
GBP206,000 which was determined on the basis of
10% of the loss before
taxation.
Scoping Audit work to respond to the risks of material
misstatement was performed
directly by the audit engagement team.
Significant changes in our approach There were no significant changes to our audit
approach since our previous
audit.
Emphasis of matter - Financial statements prepared other than on
a going concern basis
We draw attention to note 2 in the financial statements, which
indicates that the financial statements have been prepared on a
basis other than that of a going concern. Our opinion is not
modified in respect of this matter.
Key audit matter
The key audit matter is the matter that, in our professional
judgement, was of most significance in our audit of the financial
statements of the current period and includes the most significant
assessed risk of material misstatement (whether or not due to
fraud) that we identified. This matter was that which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement
team
This matter was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this
matter.
Accuracy of the EIR calculation
Key audit matter description Investment income of GBP1.1 million
has been recognised for the year
ended 31 December 2018. This is
the sole source of income for the
company, which was established
to provide financing for the parent
company, RDL Realisation Plc through
its issuance of ZDP shares.
Refer to note 2 to the financial
statements for the investment income
accounting policy and for details
of the critical accounting policy
judgement made by the directors
in relation to the determination
of the interest rate.
We presume a risk of material misstatement
due to fraud related to revenue
recognition. We have identified
that this risk relates specifically
to the accuracy of the calculation
of interest income on the loan
instrument provided to RDL Realisation
Plc.
How the scope of out audit responded Our procedures included:
to the key audit matter
Assessing related controls: We
performed a detailed walkthrough
of the process, assessing the design
and implementation of key controls
around the recognition of interest
income. We assessed the design
and implementation of key controls
around related party transactions.
Tests of detail: We reperformed
the interest income calculation,
by agreeing the calculation to
governing documents and source
documentation, verifying the calculation
methodology and the accuracy of
the inputs used in the calculation.
--------------------------------------------
Key observations Based on our work, we concluded
that investment income is not materially
misstated in the context of the
audit of the company's financial
statements.
--------------------------------------------
Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Materiality GBP206,000 (2017: GBP185,000)
Basis for determining 10% of pre-tax loss
materiality
Rationale for the Profit or loss before tax is a relevant benchmark
benchmark applied as it is a key figure used by stakeholders in
assessing the performance of the business.
We agreed with the Audit Committee that we would report to the
Committee all audit differences in excess of GBP10,300 (2017:
GBP9,250) as well as differences below that threshold that, in our
view, warranted reporting on qualitative grounds. We also report to
the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
An overview of the scope of our audit
A full scope has been performed for the company's financial
statements. Audit work to respond to the risk of material
misstatement was performed directly by the audit engagement
team.
Other information
The directors are responsible for the other We have nothing to
information. The other information comprises report in respect of
the information included in the annual report these matters.
other than the financial statements and our
auditor's report thereon.
Our opinion on the financial statements does
not cover the other information and, except
to the extent otherwise explicitly stated
in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read
the other information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If we identify such material inconsistencies
or apparent material misstatements, we are
required to determine whether there is a material
misstatement in the financial statements or
a material misstatement of the other information.
If, based on the work we have performed, we
conclude that there is a material misstatement
of this other information, we are required
to report that fact
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Extend to which the audit was considered capable of detecting
irregularities, including fraud
We identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, and then
design and perform audit procedures responsive to those risks,
including obtaining audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, our procedures included the following:
-- enquiring of the Board and the outsourced administrator,
including obtaining and reviewing supporting documentation,
concerning the company's policies and procedures relating to:
o identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances of
non-compliance;
o detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged fraud;
o the internal controls established to mitigate risks related to
fraud or non-compliance with laws and regulations;
-- discussing among the engagement team regarding how and where
fraud might occur in the financial statements and any potential
indicators of fraud. As part of this discussion, we identified
potential for fraud in the accuracy of the calculation of interest
income; and
-- obtaining an understanding of the legal and regulatory
framework that the company operates in, focusing on those laws and
regulations that had a direct effect on the financial statements or
that had a fundamental effect on the operations of the company. The
key laws and regulations we considered in this context included the
UK Companies Act.
Audit response to risks identified
As a result of performing the above, we identified the Accuracy
of the EIR calculation as a key audit matter. The key audit matters
section of our report explains the matters in more detail and also
describes the specific procedures we performed in response to that
key audit matter.
In addition to the above, our procedures to respond to risks
identified included the following:
-- reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with relevant laws
and regulations discussed above;
-- enquiring of the directors and external legal counsel
concerning actual and potential litigation and claims;
-- performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
-- reading minutes of meetings of those charged with governance; and
-- in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members, and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Company Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified any material misstatements in the strategic report
or the directors' report.
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we We have nothing to report in respect
are required to report to you if, of these matters.
in our opinion:
* we have not received all the information and
explanations we require for our audit; or
* adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
* the financial statements are not in agreement with
the accounting records and returns.
Director's remuneration
Under the Companies Act 2006 we We have nothing to report in respect
are also required to report if of these matters.
in our opinion certain disclosures
of directors' remuneration have
not been made.
Other matters
Auditor tenure
Following the recommendation of the audit committee we were
appointed by the directors of the Company on 22 July 2016 to audit
the financial statements of the Company for the period ending 31
December 2016 and subsequent financial periods. Our total
uninterrupted period of engagement is 3 years, covering periods
from our appointment through to the period ending 31 December
2018.
Consistency of the audit report with the additional report to
the audit committee
Our audit opinion is consistent with the additional report to
the audit committee we are required to provide in accordance with
ISAs (UK).
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Garrath Marshall, ACA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
6 June 2019
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
31 Dec 2018 31 Dec 2017
Notes GBP GBP
ASSETS
Non-current assets
Loan and receivables 3 55,687,457 54,595,547
----------- -----------
Total non-current assets 55,687,457 54,595,547
----------- -----------
Current assets
Prepayments - 170
Receivables 192,292 -
Cash and cash equivalents 50,000 50,000
----------- -----------
Total current assets 242,292 50,170
----------- -----------
TOTAL ASSETS 55,929,749 54,645,717
----------- -----------
Non-current liabilities
Zero Dividend Preference Shares 4 59,309,524 56,360,557
----------- -----------
Total non-current liabilities 59,309,524 56,360,557
----------- -----------
Current liabilities
Income tax liability 186,921 214,799
Accured expenses and other liabilities 136,107 42,839
Total current liabilities 323,028 257,638
----------- -----------
TOTAL LIABILITIES 59,632,552 56,618,195
----------- -----------
NET LIABILITIES (3,702,803) (1,972,478)
----------- -----------
SHAREHOLDERS' EQUITY
Capital and reserves
Called-up share capital 5 569,430 50,000
Capital contribution 3 670,946 670,946
Accumulated losses (4,943,179) (2,693,424)
----------- -----------
TOTAL SHAREHOLDERS' DEFICIT (3,702,803) (1,972,478)
----------- -----------
The accompanying notes below are an integral part of these
financial statements.
The financial statements below for the year ended 31 December
2018 of RDLZ Realisation Plc, a public company limited by shares
and incorporated in England and Wales with registered number
10247619, were approved and authorised for issue by the Board of
Directors on 6 June 2019.
Signed on behalf of the Board of Directors
Brendan Hawthorne
Chairman
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
Notes 1 Jan to 31 Dec 2018 1 Jan to 31 Dec 2017
(GBP) (GBP)
Income 1,091,910 1,070,500
--------------------- --- ---------------------
Investment income 3 1,091,910 1,070,500
--------------------- --- ---------------------
Expenses
Company secretarial, administration and registrar (75,405) (81,833)
Audit fees 12 (28,965) (37,760)
Legal fees (97,500) (1,500)
VAT and tax fees - (2,530)
Other operating expenses (3,946) (6,314)
--------------------- --- ---------------------
Total expenses (205,816) (129,937)
--------------------- --- ---------------------
Result from operating activities 886,094 940,563
--------------------- --- ---------------------
Finance costs (2,948,755) (2,797,488)
--------------------- --- ---------------------
Total finance costs (2,948,965) (2,797,488)
--------------------- --- ---------------------
Loss before tax (2,062,871) (1,856,925)
Tax 6 (186,883) (181,058)
--------------------- --- ---------------------
Loss after tax and total comprehensive loss for the year (2,249,755) (2,037,983)
===================== === =====================
Basic and Diluted Loss per Ordinary Share 9 (32.84) (40.76)
===================== === =====================
The accompanying notes below are an integral part of these
financial statements.
All the items in the above Statements derive from continuing
operations.
Other comprehensive income
There were no items of other comprehensive income in the current
year and prior year therefore the loss for the year and prior year
are also the total comprehensive loss for the year and prior
year.
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
FOR THE YEARED 31 DECEMBER 2018
Notes Called-up Capital Accumulated Total
Share Capital contribution losses (GBP)
(GBP) (GBP) (GBP)
--------------- -------------- ------------ ------------
Balance at 1 January
2017 50,000 529,407 (655,441) (76,034)
Capital contribution
during the year 3 - 175,280 - 175,280
Tax relating to capital
contribution - (33,741) - (33,741)
Loss after tax and
total comprehensive
income for the period - - (2,037,983) (2,037,983)
--------------- -------------- ------------ ------------
Balance at 31 December
2017 50,000 670,946 (2,693,424) (1,972,478)
=============== ============== ============ ============
Notes Called-up Capital Contribution Accumulated Total
Share capital (GBP) losses (GBP)
(GBP) (GBP)
--------------- --------------------- ------------ ------------
Balance at 1 January
2018 50,000 670.946 (2,693,424) (1,972,478)
Issues of shares 5 519,430 - - 519,430
Loss after tax
and total comprehensive
income for the
year - - (2,249,755) (2,249,755)
Balance at 31 December
2018 569.430 670.946 (4,943,179) (3,702,803)
=============== ===================== ============ ============
The accompanying notes below are an integral part of these
financial statements.
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
Notes 1 Jan to 31 Dec 1 Jan to 31 Dec
2018 2017
(GPB) (GBP)
Cash flows from operating
activities
Loss before tax (2,062,871) (1,856,925)
Adjustments for:
Investments income (1,091,910) (1,070,500)
Finance Costs 2,948,965 2,797,488
Income tax paid (214,762) (44,026)
---------------- ----------------
Operating cash flows
before movements in
working capital (420,578) (173,963)
Issue of Ordinary Shares 519,430 -
(Increase)/decrease
in prepayments and other
receivables (192,122) 1,588
Increase/(decrease)
in accrued expenses
and other liabilities. 93,270 (2,905)
Net cash flow used in
operating activities - (175,280)
---------------- ----------------
Financing activities
Expenses paid by RDL - 175,280
Net cash flows from
financing activities - 175,280
---------------- ----------------
Net change in cash and
cash equivalent - -
Cash and cash equivalent
at the beginning of
the year 50,000 50,000
Cash and cash equivalent
at the end of the year 50,000 50,000
================ ================
The issue of Ordinary Shares to RDL served to reduce the loan
receivable from RDL. No cash was received.
The accompanying notes below are an integral part of these
financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2018
1. GENERAL INFORMATION
RDLZ Realisation PLC ("RDLZ" or the "Company"), was incorporated
and registered in England and Wales on 23 June 2016 as a wholly
owned subsidiary of RDL Realisation Plc ("RDL") and with a limited
life of up to 31 July 2021, unless extended by the passing of a
special resolution of the Company. On 1 August 2016, the Company
was subsequently admitted to the standard segment of the Official
List of the UK Listing Authority and its Zero Dividend Preference
Shares of GBP 0.01 each (the "ZDP Shares") were admitted to trading
on the London Stock Exchange's main market for listed
securities.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting and preparation
These financial statements have been prepared in compliance with
applicable International Financial Reporting Standards ("IFRS") as
adopted by the European Union ("EU") and have been prepared on a
historical cost basis. There are no new standards or amendments to
standards effective for the period presented that have a material
impact on the Company.
Going concern and viability statement
The RDL Board has announced its intention to dispose of its
assets in an orderly manner and return shareholders' capital to
them and adequately reimburse the ZDP shareholders by 31 July
2021.
On 3 June 2019, the Company announced that the ZDP Committee of
RDL and the Board of the Company have finalised the terms of a
proposal (the "Proposal") pursuant to which, subject to required
approvals by holders of ZDP Shares (the "ZDP Shareholders"):
-- the Board and the RDL Board will take the steps necessary to
place the Company into a members' voluntary winding up on a new ZDP
Repayment Date, which will be 20 June 2019; and
-- ZDP Shareholders will receive a Final Capital Entitlement of
121.8887 pence per ZDP Share (the "Revised Final Capital
Entitlement").
The Proposal is conditional upon the approval by ZDP
Shareholders of special resolutions at a class meeting. A circular
(the "Circular") convening such a class meeting of ZDP Shareholders
to be held on 20 June 2019 (the "ZDP Class Meeting") to consider,
and if thought fit, approve the special resolutions required to
implement the Proposal has been published and sent to the ZDP
Shareholders.
The Company and RDL have received irrevocable undertakings to
vote in favour of the resolutions to be proposed at the ZDP Class
Meeting from holders of approximately 64.5 per cent. of the total
number of ZDP Shares in issue. RDL does not propose to vote the
7,278,193 ZDP Shares held by it in relation to the Proposal,
representing approximately 13.7 per cent. of the total number of
ZDP Shares in issue.
As a result of the above early repayment, the Company is
expected to incur a realised loss on recognition of the ZDP Shares
of GBP3 million.
Given these developments and the intention to wind down the
Company, the use of the going concern basis in preparing the
financial statements of the Company is not considered to be
appropriate. As such, the financial statements have been prepared
on a basis other than that of a going concern, under which assets
are measured at their net realisable value. There were no
adjustments made to the carrying values of the assets and
liabilities of the Company as a result of this change in the basis
of preparation, because the Directors consider the carrying value
of assets to approximate their net realisable value.
No provision has been made for the costs of winding up the
Company as these will be charged to the income statement on an
accruals basis as they are incurred or the Company becomes
obligated to make such payments in the future.
The Directors believe that the Company and Group have adequate
resources to continue in operational existence until the
anticipated liquidation of the Company. The RDL Board intend that
sufficient liquidity is held back at all times to ensure that all
liabilities, including those due to ZDP shareholders are at all
times adequately covered.
The Directors have assessed the prospects of the Company up to
the ZDP Repayment Date of 31 July 2021. The Directors believe this
period to be appropriate as they will subsequently be required by
the Articles to pass a special resolution in a general meeting and
at a class meeting of ZDP Shareholders to place the Company into
voluntary liquidation.
The Board has reviewed the going concern and viability statement
of RDL, which can be found in the Strategic Report of RDL's Annual
Report and has assessed that RDL has sufficient resources to fulfil
its obligations to the Company. The key assumptions made include
having adequate Cover for the Final Capital Entitlement as at that
date and cash flow forecast for the Company's general and
administrative costs. Based on the Directors' evaluation of these
factors, they have concluded that there is a reasonable expectation
that the Company will be able to continue in operation and meet its
liabilities as they fall due up to the final repayment date.
New Accounting Standards, amendments to existing Accounting
Standards and/or interpretations of existing Accounting Standards
(separately or together, "New Accounting Requirements") not yet
adopted
In the Directors' opinion, except for the application of the New
Accounting Requirements referred to below, all non-mandatory New
Accounting Requirements are either not yet permitted to be adopted,
or would have no material effect on the reported performance,
financial position or disclosures of the Company and consequently
have neither been adopted.
New Accounting Requirements endorsed for use in the EU
IFRS 9 - "Financial Instruments" (Replacement of IAS 39 -
"Financial Instruments: Recognition and Measurement") - effective
from 1 January 2018
IFRS 9 Financial Instruments sets out requirements for
recognising and measuring financial assets, financial liabilities
and some contracts to buy or sell non-financial items. This
standard replaces IAS 39 Financial Instruments: Recognition and
Measurement.
i - Classification - Financial assets
IFRS 9 contains three principal classification categories for
financial assets; measured at amortised cost, Fair Value through
Other Comprehensive Income ("FVOCI") and Fair Value through Profit
or Loss ("FVTPL"). The standard eliminates the existing IAS 39
categories of held to maturity, loans and receivables and available
for sale.
Under IFRS 9, derivatives embedded in contracts where the host
is a financial asset in the scope of the standard are never
bifurcated. Instead, the hybrid financial instrument as a whole is
assessed for classification.
ii - Impairment - Financial assets and contract assets
IFRS 9 replaces the 'incurred loss' model in IAS 39 with a
forward-looking 'expected credit loss' (ECL) model. This requires
considerable judgement about how changes in economic factors affect
ECLs, which are determined on a probability-weighted basis.
The new impairment model will apply to financial assets measured
at amortised cost or FVOCI, except for investments in equity
instruments, and to contract assets.
Under IFRS 9, loss allowances are measured on either of the
following bases:
- 12 month ECL: these are ECLs that result from possible default
events within the 12-months after the reporting date; and
- lifetime ECL: these are ECLs that result from all possible
default events over the expected life of a financial
instrument.
Lifetime ECL measurement applies if the credit risk of a
financial asset at the reporting date has increased significantly
since initial recognition and 12-month ECL measurement applies if
it has not. An entity may determine that a financial asset's credit
risk has not increased significantly if the asset has low credit
risk at the reporting date.
Under IFRS 9, the Company has to classify all financial
instruments in scope for impairment into 3 Stages - stage 1, stage
2 or 3, depending on the change in credit quality since initial
recognition.
Investments in equity instruments and financial assets at FVTPL
are out of scope of the impairment requirement.
Stage 1
This includes loans where there is no significant increase in
credit risk since initial recognition or loans that have low credit
risk on reporting date. For loans in stage 1, interest is accrued
on the gross carrying amount of the loans and a 12-month expected
credit loss ("ECL") is factored in the profit and loss ("P&L")
calculations.
Stage 2
This consists of loans with significant increase in credit risk
since initial recognition but not credit impaired. Interest for
loans in stage 2 is accrued on the gross carrying amount, however,
a lifetime ECL is factored into the profit and loss
calculations.
Stage 3
Includes loans which demonstrate evidence of impairment on the
reporting date. Interest is accrued on the net carrying amount of
the loans and a lifetime ECL is factored into the profit and loss
calculations.
For short-term receivables and cash and cash equivalents, the
ECL model is not likely to result in a material change of the
balance due to their short-term nature therefore the Company will
apply the simplified approach for contracts that have a maturity of
one year or less.
iii - Classification - Financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification of financial liabilities. However, under IAS 39
all fair value changes of liabilities designated as at FVTPL are
recognised in profit or loss, whereas under IFRS 9 these fair value
changes are generally presented as follows:
- the amount of change in fair value that is attributable to
changes in the credit risk of the liability is presented in the
OCI; and
- the remaining amount of change in the fair value is presented
in profit or loss.
Upon adoption of IFRS 9, the loan and receivables and zero
dividend preference shares continue to be classified and accounted
for at amortised cost. The adoption of IFRS 9 resulted in
re-evaluation of the impairment model for financial assets measured
at amortised cost and included estimation of an expected credit
loss on those financial instruments. The Directors believe that the
12 month credit risk of RDL is minimal or effectively zero given
the level of Cover. Consequently, the implementation of IFRS 9
resulted in no material impact to the Company's financial position
or reported financial performance.
IFRS 15 - "Revenue from Contracts with Customers" (Replacement
of IAS 18 - "Revenue") effective date from 1 January 2018
IFRS 15 is a new standard that introduces the following
requirements:
- A five-step model is applied to determine when to recognise
revenue, and at what amount.
- Revenue is recognised when (or as) a company transfers control
of goods or services to a customer at the amount to which the
company expects to be entitled.
IFRS 15 - "Revenue from Contracts with Customers" (Replacement
of IAS 18 - "Revenue") effective date from 1 January 2018
(continued)
- Depending on whether certain criteria are met, revenue is
recognised either over time, in a manner that best reflects the
Company's performance, or at a point in time, when control of the
goods or services is transferred to the customer.
The Company adopted IFRS 15, and in addition to the above, the
guidance on interest and dividend income have been moved from IAS
18 to IFRS 9 without significant changes to the requirements.
Therefore, there was no impact of adopting IFRS 15 for the
Company.
Functional and presentation currency
The financial statements are presented in Pounds Sterling
("GBP"), the currency of the primary economic environment in which
the Company operates, the Company's functional currency.
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency
using the exchange rate prevailing at the reporting date.
Financial instruments at amortised cost - Loan and receivables
and Zero Dividend Preference Shares
These are initially recognised at cost, being the fair value of
the consideration received or paid associated with the loan or
borrowing net of direct issue costs. Loan and receivables and ZDP
Shares are subsequently measured at amortised cost using the
effective interest method. The effective interest method calculates
the amortised cost by allocating interest over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments (including all fees paid
or received that form an integral part of the effective interest
rate) through the expected life of the loan or borrowing to the net
carrying amount on initial recognition.
Direct issue costs are deducted from the carrying amount and
amortised using the effective interest method.
Taxation
The current tax payable is based on the taxable profit for the
period. Taxable profit differs from net profit or loss as reported
in the Statement of Comprehensive Income because it excludes items
of income or expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted at
the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted
for using the liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised based on tax rates that have been enacted or substantively
enacted at the reporting date. The carrying amount of deferred tax
assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Capital contribution
Capital contributions from the parent company to meet current
and future obligations of the Company are recognised directly in
equity based on the value of expenses paid for by the parent
company, in accordance with the Undertaking.
Investment income
Investment income is recognised when it is probable that the
economic benefits will flow to the Company and the amount of
revenue can be measured reliably. Income for interest bearing
financial instruments is recognised on an accruals basis, by
reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the
financial asset to that asset's net carrying amount on initial
recognition.
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.
Expenses
All operating expenses of the Company are paid by RDL pursuant
to the Undertaking.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and
highly liquid interest-bearing securities with original maturities
of three months or less from the date of acquisition.
Earnings per share
The Company presents basic and diluted earnings per share
("EPS") data for its Ordinary Shares. Basic EPS is calculated by
dividing the profit or loss attributable to Ordinary Shareholders
by the weighted average number of ordinary shares outstanding
during the period. The diluted EPS is the same as the Basic EPS as
there is currently no arrangement which could have a dilutive
effect on the Company's Ordinary Shares.
Use of estimates, judgements and assumptions
The Company based its assumptions and estimates on parameters
available when the financial statements were prepared. However,
existing circumstances and assumptions about future developments
may change due to market changes or circumstances arising beyond
the control of the Group. Such changes are reflected in the
assumptions when they occur.
The following are areas of particular significance to the
Group's financial statements and include the use of estimates and
the application of judgement.
Critical judgements in applying the accounting policies - loan
and borrowings at amortised cost
The Company accounts for the Loan at amortised cost on the basis
that it intends to hold the financial asset to collect contractual
cash flows and the ZDP Shares are accounted for at amortised cost
on the basis that they have fixed or determinable payments. The
effective interest rate method has been applied in calculating the
income and expense during the year.
Critical judgements in applying the accounting policies -
interest rate on Intercompany Loan
The Company entered into a Loan Agreement with RDL which is
subject to an interest rate of 2% compounded annually as disclosed
in note 3. This interest rate compared to the ZDP Shares' interest
rate of 5% compounded annually could result in a potential transfer
pricing issue which is often complex and requires significant
judgement.
RDL has engaged a third-party adviser to provide transfer
pricing advice concerning the arm's length interest rate payable on
the Loan Agreement between the Company and RDL. The 2% interest
rate has been determined to be reasonable by demonstrating the
commercial effect for the RDL group over the 5-year period;
identifying comparable transactions; performing interest rate
benchmarking analysis; and reviewing third party commitment lending
interest at a rate lower than the 5%. Therefore, in preparing these
financial statements, the Directors considered using a 2% interest
rate on the intercompany loan to be a reasonable estimate of an
arm's length rate of interest.
3. LOAN AND RECEIVABLES
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
Beginning balance 54,595,547 53,525,047
Investment income during the year 1,091,910 1,070,500
------------ ------------
Closing balance 55,687,457 54,595,547
============ ============
Intercompany Loan Agreement
On 25 July 2016, the Company entered into a Loan Agreement with
RDL. Pursuant to the Loan Agreement, the Company immediately
following the Admission and Subsequent Admission lent the entirety
of the gross proceeds of each issue of ZDP Shares to RDL, which RDL
has applied towards making investments in accordance with its
investment policy and working capital purposes. The costs
associated with the issue of the ZDP Shares amounted to GBP
598,552, and were paid by RDL.
The loan is subject to an interest rate of 2% per annum,
compounding on each anniversary of the date of Admission on 1
August 2016 and repayable on the earlier of: the date falling three
business days before the ZDP Repayment Date (see note 4); or in an
event of default; or on demand by the Company. The Directors of the
Company have no intention to demand repayment of the Loan in the
next 12 months.
Deed of Undertaking
The Company also entered into the Undertaking on 25 July 2016
pursuant to which RDL undertook to (among other things) subscribe
for such number of Ordinary Shares in the capital of the Company as
may be necessary or to otherwise ensure that the Company has
sufficient assets to pay the Final Capital Entitlement to the ZDP
Shareholders on the ZDP Repayment Date and to pay any operational
costs incurred by the Company.
During the year, RDL contributed GBP nil (31 December 2017: GBP
175,280) to the Company. The total capital contribution by the
parent company as at 31 December 2018 amounted to GBP 670,946 (31
December 2017: GBP 670,946).
On 18 December 2018, the Company issued 519,430 ordinary shares
to RDL to meet the expenses it paid on behalf of the Company.
4. ZERO DIVID PREFERENCE SHARES
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
Opening balance 56,360,557 53,563,069
Amortisation of issues costs during the year 278,400 230,155
Amortisation of premium during the year (155,296) (138,437)
Accrues interest during the year 2,825,863 2,705,770
------------ ------------
Closing balance 59,309,524 56,360,557
============ ============
Under the Company's Articles of Association, the Directors are
authorised to issue up to 55,000,000 ZDP Shares for a period of 5
years from 25 July 2016. On 1 November 2016, the Company passed a
resolution to authorise the Directors to issue up to 75,000,000 ZDP
Shares, such authority to expire on 26 July 2021, unless revoked
sooner or varied by the Company in a general meeting.
On 1 August 2016, the Company issued 30,000,000 ZDP Shares at
GBP 0.01 each at a placing price of GBP 1.00 per ZDP Share.
Subsequently on 4 November 2016, the Company issued a further
23,000,000 ZDP Shares at a placing price of GBP 1.035 each.
During the year, RDL purchased a total of 7,278,193 ZDP
Shares.
The ZDP Shares will have a final capital entitlement of GBP
1.2763 per ZDP share on the ZDP Repayment Date. Accordingly, the
aggregate Final Capital Entitlement payable to the holders of ZDP
Shares, is GBP 67,643,900.(5)
5 There can be no assurance that the Final Capital Entitlement
of the ZDP Shares will be repaid in full on the ZDP Repayment
Date.
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 carry the right to vote as a class on certain
proposals which would be likely to materially affect their
position. Further ZDP Shares (or any shares or securities which
rank in priority to or pari passu with the ZDP Shares) may be
issued without the separate class approval of the ZDP Shareholders
provided that the Directors determine that the ZDP Shares would
have a Cover of not less than 2.75 times immediately following such
issue.
Voting Rights of ZDP Shares
The ZDP Shares carry no right to attend or vote at general
meetings of the Company.
On a vote on a resolution on a show of hands at a class meeting
of the holders of ZDP Shares (other than in respect of a ZDP
Recommended Resolution or a ZDP Reconstruction Resolution (in each
case as defined in the Company's Articles), each member present in
person (and every proxy present who has been duly appointed by one
or more members entitled to vote on the resolution) has one vote. A
proxy has one vote for and one vote against the resolution if the
proxy has been duly appointed by more than one member entitled to
vote on the resolution, and the proxy has been instructed by one or
more of those members to vote for the resolution and by one or more
other of those members to vote against. On a vote on a resolution
on a poll taken at a class meeting, every member has one vote in
respect of each share held by him. All or any of the voting rights
of a member may be exercised by one or more duly appointed proxies
but where a member appoints more than one proxy, this does not
authorise the exercise by the proxies taken together of more
extensive voting rights than could be exercised by the member in
person.
Any vote on any ZDP Reconstruction Resolution or ZDP Recommended
Resolution shall be by means of a poll. At a class meeting of the
holders of the ZDP Shares in respect of a ZDP Recommended
Resolution or a ZDP Reconstruction Resolution, each holder of ZDP
Shares present in person or by proxy shall, on a poll, have such
number of votes in respect of each ZDP Share held by him (including
fractions of a vote) that the aggregate number of votes cast in
favour of the resolution is four times the aggregate number of
votes cast against the resolution. Each member present in person or
by proxy and entitled to vote, who votes against such resolution
shall on a poll have one vote for each ZDP Share held by him;
provided that, if any term of any offer or arrangement to which the
resolution relates shall (as regards any one or more members) have
been breached in any material respect of which the chairman of the
relevant meeting has written notice prior to the commencement of
such meeting then, notwithstanding anything in the Articles to the
contrary, each member shall, at any such meeting at which such
shareholder is present in person or by proxy, and entitled to vote,
on a poll have one vote for every such ZDP Share held by him.
Variation of Rights and Distribution on Winding Up
On a return of capital, whether on a winding up or otherwise,
the holders of ZDP Shares shall be entitled to receive, in priority
to any amounts paid to the holders of Ordinary Shares, an amount
equal to the initial capital entitlement of GBP 100 pence per share
as increased at such rate as accrues daily and compounds annually
to give an entitlement to GBP 1.2763 on 31 July 2021, the first
such increase to be deemed to have occurred on 1 August 2016 and
the last to occur on 30 July 2021.
5. SHARE CAPITAL
AUTHORISED:
Limited number of Ordinary Shares 10,000,000 Ordinary
Shares
====================
ISSUED AND FULLY PAID:
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
Opening balance 50,000 50,000
Issue of shares 519,430 -
Closing balance 569,430 50,000
============ ============
The Company's 50,000 Ordinary Shares were issued to RDL on 23
June 2016.
On 18 December 2018, the Company issued a further 519,430
Ordinary Shares to RDL.
It is not intended that any dividend will be paid to the holders
of Ordinary Shares prior to the ZDP Repayment Date.
Voting Rights of Ordinary Shares
Subject to any rights or restrictions attached to any shares, on
a show of hands every ordinary shareholder present in person has
one vote and every proxy present who has been duly appointed by a
shareholder entitled to vote has one vote, and on a poll every
shareholder (whether present in person or by proxy) has one vote
for every share of which he is the holder. A shareholder entitled
to more than one vote need not, if he votes, use all his votes or
cast all the votes he uses the same way. In the case of joint
holders, the vote of the senior holder who tenders a vote, whether
in person or by proxy, shall be accepted to the exclusion of the
vote of the other joint holders, and seniority shall be determined
by the order in which the names of the holders stand in the
Register.
Variation of Rights and Distribution on Winding Up for Ordinary
Shares
On a return of capital, whether on a winding up or otherwise,
after the amounts payable to the holders of ZDP Shares have been
satisfied in full, each Ordinary Share carries the right to a
repayment of capital of up to GBP 1.00 paid up capital and the
Ordinary Shares all rank pari passu as respects distributions of
any surplus remaining after all such capital has been repaid.
6. TAX
31 Dec
31 Dec 2018 2017
(GBP) (GBP)
Corporation tax:
Current 186,883 181,058
Total tax expense for the year 186,883 181,058
============ ========
The Company's tax charge for the year can be reconciled to the
loss in the statement of comprehensive income as follows:
The UK Corporation tax rate has changed from 20% to 19%
effective 19 April 2017. The Company applied a weighted average
corporation tax of 19.25% for 2017.
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
Loss before tax on continuing operations (2,062,871) (1,856,925)
------------ ------------
Tax effect at the UK corporation tax rate
of 19% / 19.25% (391,945) (357,485)
Tax effect of expenses that are not deductible
taxable profit 578,828 538,516
Tax expense for the year 186,883 181,058
============ ============
7. CAPITAL MANAGEMENT
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence. The Company's
capital is represented by the Ordinary Shares and capital
contribution from the parent company. Pursuant to the Undertaking
granted by RDL in favour of the Company, RDL undertook to (among
other things) subscribe for such number of Ordinary Shares in the
capital of the Company as may be necessary or to otherwise ensure
that the Company has sufficient assets to pay the total amount
repayable to the ZDP Shareholders and pay any operational costs
incurred by the Company.
The Company is not subject to externally imposed capital
requirements.
8. FINANCIAL RISK 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 the ZDP holders at the redemption date. Due to the
Company's dependence on RDL 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 for RDL.
The Company has exposure to the following risks from its use of
financial instruments:
- Credit risk;
- Liquidity risk; and
- Interest rate risk.
All short-term financial instruments have been excluded from the
following disclosures.
Credit risk
Credit risk is the risk of 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 RDL under the Undertaking to
subscribe for such number of Ordinary Shares or otherwise ensure
that the Company is able to pay the Final Capital Entitlement to
ZDP Shareholders on the ZDP Repayment Date. RDL's credit risk is
the risk of financial loss if a counterparty to a debt instrument
fails to meet its contractual obligations.
RDL seeks to mitigate its credit risk by realising all its
remaining assets in the portfolio, in a prudent manner consistent
with the principles of good investment management with a view to
returning cash to its Shareholders in an orderly manner and meeting
its obligations to the Company.
Liquidity risk
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
31 July 2021. The Company's exposure to liquidity risk depends upon
RDL's ability to meet all current and future obligations of the
Company. The Directors consider RDL's compliance with the
Undertaking and the capital contributions received as sufficient.
The redemption amount of the ZDP Shares has been fully accrued up
to repayment date.
The contractual undiscounted maturity profile of the Company's
financial assets and liabilities is as follows:
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
In more than one year but not more than
five years:
Loan and receivables 58,610,638 56,610,638
============ ============
Zero Dividend Preference Shares 67,643,347 67,643,347
============ ============
Interest rate risk
Interest rate risk occurs when there is a mismatch between the
interest rates of the Company's assets and liabilities. The
interest rate applied on the Loan Agreement is fixed at 2% whereas
the interest rate applied on the ZDP Shares is fixed at 5%. The net
exposure to interest risk is reduced as a result of the Undertaking
by RDL whereby at any time up to or immediately prior to the ZDP
Repayment Date, RDL will subscribe for such number of ordinary
shares in the Company as is necessary to provide the Company (after
taking into account the repayment of the loan) with sufficient
funds to meet the repayment obligations in respect of the ZDP
Shares. Assuming the interest rate applied on the Loan Agreement is
5%, the investment income for the year would have been higher by
GBP 1,866,882 (31 December 2017: GBP 898,163).
Fair value estimation
The fair values of cash and cash equivalents, prepayments, and
accrued expenses and other liabilities are estimated to be
approximately equal to their carrying values due to their
short-term nature. The fair values for the loan and receivables and
ZDP Shares are disclosed in this note for disclosure 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 GBP 116.000 pence (31 December 2017: GBP 101.875
pence) per share which was observed on the London Stock Exchange on
27 December 2018 (31 December 2017: 29 December 2017) being the
last observable traded price before the year end. The Loan
Agreement and Undertaking expire on the same date as the ZDP
Repayment Date. Due to the dependence on RDL to repay the Loan and
provide the support to meet the Company's obligation to the ZDP
holders, the fair value of the Loan (including the amount
receivable under the Undertaking) is estimated to be equal and
opposite to the fair value of the ZDP Shares.
Fair value hierarchy
IFRS 13 defines a fair value hierarchy that prioritises the
inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets and liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level
3 measurements).
The three levels of fair value hierarchy under IFRS 13 are as
follows:
Level 1: Inputs that reflect unadjusted quoted prices in active
markets for identical assets and liabilities at the valuation
date;
Level 2: Inputs other than quoted prices included in Level 1
that are observable for the assets or liability either directly (as
prices) or indirectly (derived from prices), including inputs from
markets that are not considered to be active; and
Level 3: Inputs that are not based upon observable market
data.
However, the determination of what constitutes "observable"
requires significant judgement by the Directors. The Directors
consider observable data to be market data which is readily
available, regularly distributed or updated, reliable and
verifiable, not proprietary, provided by multiple independent
sources that are actively involved in the relevant market.
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 Loan and receivables is classified
within Level 2 of the fair value hierarchy on the basis that the
fair value of the Loan has been determined directly from the fair
value of the ZDP Shares.
The following tables include the fair value hierarchy of the
Company's financial assets and liabilities not measured at fair
value but for which fair value is disclosed:
As at 31 December 2018:
Fair Value (GBP) (GBP) (GBP) (GBP)
Level 1 Level 2 Level 3 Total
Loan and receivables - 61,480,000 - 61,480,000
=========== =========== ========= ===========
Zero Dividend
Preference Shares 61,480,000 - - 61,480,000
=========== =========== ========= ===========
As at December 2017:
Fair Value (GBP) (GBP) (GBP) (GBP)
Level 1 Level 2 Level 3 Total
Loan and receivables - 53,993,750 - 53,993,750
=========== =========== ========= ===========
Zero Dividend
Preference Shares 53,993,750 - - 53,993,750
=========== =========== ========= ===========
9. BASIC AND DILUTED LOSS PER ORDINARY SHARE
The calculation of loss per share is based on the net loss for
the year of GBP 2,249,755 (31 December 2017: GBP 2,037,983) and on
a weighted average number of shares of 68,500 Ordinary Shares (31
December 2017: 50,000).
10. ULTIMATE CONTROLLING PARTY
The voting rights in the Company are wholly-owned by RDL
Realisation Plc, a company incorporated in the United Kingdom and
registered in England and Wales, and is therefore the immediate and
ultimate controlling party.
11. RELATED PARTIES
During the year and pursuant to the Deed of Undertaking, RDL
contributed GBP nil (31 December 2017: GBP 175,280) to the
Company.
On 18 December 2018, the Company issued 519,430 ordinary shares
to RDL.
On 25 July 2016, the Company entered into a Loan Agreement and
Undertaking with RDL which are disclosed in more detail in note
3.
As at 31 December 2018, RDL held 7,278,193 ZDP Shares.
The Company had no employees for the year ended 31 December 2018
(31 December 2017: none).
The Directors received no remuneration for their services to the
Company during the year and prior year.
12. AUDITOR'S REMUNERATION
The analysis of the auditor's remuneration is as follows:
31 Dec 2018 31 Dec 2017
(GBP) (GBP)
Audit fees for the audit
of the Company's financial
statements 28,965 24,960
Non-audit fees related to
corporate financial services
charges to Zero Dividend
Preference Shares - 12,800
------------ --- ------------
28,965 37,760
============ === ============
13. OPERATING SEGMENTS
Geographical information
The Company is managed as a single financing business, being the
provision of a loan to RDL from the Company's ZDP Shares
proceeds.
The chief operating decision maker is the Board of Directors.
Under IFRS 8 the Company is required to disclose the geographical
location of revenue and amounts of non-current assets other than
financial instruments
Revenues
All of the Company's revenue is generated from the UK.
Non-current assets
The Company does not have non-current assets other than its
loans and receivables.
14. SUBSEQUENT EVENTS
On 3 June 2019, the Company announced that the ZDP Committee of
RDL and the Board of the Company have finalised the terms of a
proposal (the "Proposal") pursuant to which, subject to required
approvals by holders of ZDP Shares (the "ZDP Shareholders"):
-- the Board and the RDL Board will take the steps necessary to
place the Company into a members' voluntary winding up on a new ZDP
Repayment Date, which will be 20 June 2019; and
-- ZDP Shareholders will receive a Final Capital Entitlement of
121.8887 pence per ZDP Share (the "Revised Final Capital
Entitlement").
The Proposal is conditional upon the approval by ZDP
Shareholders of special resolutions at a class meeting. A circular
(the "Circular") convening such a class meeting of ZDP Shareholders
to be held on 20 June 2019 (the "ZDP Class Meeting") to consider,
and if thought fit, approve the special resolutions required to
implement the Proposal has been published and sent to the ZDP
Shareholders.
The Company and RDL have received undertakings to vote in favour
of the resolutions to be proposed at the ZDP Class Meeting from
holders of approximately 64.5 per cent. of the total number of ZDP
Shares in issue. RDL does not propose to vote the 7,278,193 ZDP
Shares held by it in relation to the Proposal, representing
approximately 13.7 per cent. of the total number of ZDP Shares in
issue.
As a result of the above early repayment, the Company is
expected to incur a loss on derecognition of the ZDP Shares of GBP3
million.
COMPANY INFORMATION
Directors
Brendan Hawthorne (appointed 26 July 2018)
Joseph Kenary (appointed 4 December 2018)
Christopher Waldron (resigned 19 June 2018)
Matthew Mulford (resigned 19 June 2018)
Jonathan Schneider (resigned 12 November 2018)
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 LLFVERRIRIIA
(END) Dow Jones Newswires
June 07, 2019 02:00 ET (06:00 GMT)
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