TIDMRDLZ
RNS Number : 7555D
Ranger Direct Lending ZDP PLC
28 April 2017
ANNUAL FINANCIAL REPORT ANNOUNCEMENT
(Registered No. 10247619)
RANGER DIRECT LING ZDP PLC
FOR THE PERIOD FROM 23 JUNE 2016 (DATE OF INCORPORATION) TO 31
DECEMBER 2016
Ranger Direct Lending ZDP Plc (the "Company") announces that it
has published its Annual Report and Accounts 2016. Copies of the
Annual Report and Accounts 2016 and the Notice of the 2017 Annual
General Meeting are available to view on the Company's website at
http://www.rangerdirectlending.uk/. They have also been submitted
to the National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/NSM.
Copies of those documents, together with a form of proxy for use
in connection with the 2017 Annual General Meeting, will be posted
or made available to the Company's shareholders shortly.
The Company also announces that it will hold its Annual General
Meeting at 4.00 pm on 15 June 2017 at 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 period from 23 June 2016 to 31
December 2016 but is derived from those accounts. Statutory
accounts for 31 December 2016 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 2016, which require to be
published are set out below.
CHAIRMAN'S STATEMENT
I am pleased to present the Company's Annual Report and Accounts
for the period from 23 June 2016 to 31 December 2016.
The Company is a wholly owned subsidiary of Ranger Direct
Lending Fund plc ("RDLF") 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 RDLF pursuant to the terms of a loan
agreement between the Company and RDLF dated 25 July 2016 (the
"Loan" and the "Loan Agreement"). The proceeds of the Loan are
required to be utilised in accordance with RDLF's investment policy
and for working capital purposes.
As a condition of the Loan Agreement, RDLF was required to grant
an undertaking in favour of the Company dated 25 July 2016 (the
"Undertaking") pursuant to which RDLF 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) 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 the
issue price of the ZDP Shares (the "Redemption Yield")(1) .
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 2016 was
3.70 times).
From the perspective of the Directors, the Company's activities
are integrated with the RDLF Group (the "Group").
(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.
Christopher Waldron
Chairman
STRATEGIC REPORT
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 Ranger Direct Lending ZDP plc (the "Company")
and help them understand how the Directors have performed their
duty under Section 172 of the Act.
The Company was incorporated and registered in England and Wales
on 23 June 2016 as a wholly owned subsidiary of RDLF. 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
("Subsequent Admission").
Pursuant to the terms of the Loan Agreement, the Company loaned
the entirety of the gross proceeds of the issue of ZDP Shares to
RDLF upon Admission and Subsequent Admission (as applicable). As a
condition of entering into the Loan Agreement, RDLF was required to
grant the Company the Undertaking. In accordance with the terms of
the Undertaking, RDLF 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 the RDLF Group (the "Group").
OTHER STATUTORY INFORMATION
Principal activities
The Company is a wholly owned subsidiary of RDLF and was
incorporated by RDLF 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 RDLF pursuant to the Loan Agreement.
These proceeds along with the obligation of RDLF, pursuant to an
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.
Objective
The objective of the Company is to provide the final capital
entitlement of the ZDP Shares to the ZDP holders at the ZDP
Repayment Date of 31 July 2021. The funds are managed in accordance
with the investment policy of RDLF.
Performance
The Board reviews 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 follow:
-- Cover(2)
-- Accrued capital entitlement
-- Share Price of ZDP Shares(3)
The ZDP Shares' Cover as at 31 December 2016 was 3.70 times.
As at 31 December 2016, the capital entitlement which had
accrued on the ZDP Shares was GBP 1.0106 per ZDP Share. The Final
Capital Entitlement is GBP 1.2763 per ZDP Share (payable on the ZDP
Repayment Date).(4)
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 RDLF's ordinary shares, however, the Loan
made by the Company to RDLF is unsecured and therefore the Company
will rank behind any secured creditors of RDLF. As such, there can
be no guarantee that the Final Capital Entitlement will be
paid.
Date Share Price of ZDP Shares(3)
------------------ -----------------------------
IPO 23 June 2016 1.000
------------------ -----------------------------
31/08/2016 1.063
------------------ -----------------------------
30/09/2016 1.071
------------------ -----------------------------
31/10/2016 1.070
------------------ -----------------------------
30/11/2016 1.068
------------------ -----------------------------
29/12/2016 1.045
------------------ -----------------------------
(2) Cover represents a fraction where the numerator is equal to
the Net Asset Value of the 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.
(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
Further KPIs for the parent company can be found in RDLF's
annual report.
The Company's market capitalisation as of 31 December 2016 was
GBP 55.385 million based on 53,000,000 ZDP Shares at a Share Price
of 104.5 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 RDLF's Annual Report and
Accounts.
Principal risks and uncertainties
Due to the Company's dependence on RDLF 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 RDLF's ability to
perform its obligations under the Undertaking. The specific risks
faced by RDLF are described in its annual report, which include:
macroeconomic risks, legal and compliance risks, investment risks,
taxation risks, cyber security risks and borrowing risks. In
addition, the Company is also focused on the following principal
risks:
Principal risk Mitigation Link to
KPI
-------------------------- ------------------------------------------------------------ --------
Final capital entitlement
RDLF's debt to the To protect the interests Cover
Company pursuant of ZDP Shareholders,
to the Loan Agreement the Undertaking contains
and RDLF's obligations the following restrictions:
under the Undertaking * Group incurring any bank borrowings which would
will rank behind exceed an amount equal to the sum of:
any secured creditors
of RDLF therefore
it is not guaranteed (a) 20% of the prevailing
that the final capital Net Asset Value attributable
entitlement will to the RDLF Ordinary
be paid. Shares in issue as
at 1 August 2016;
plus
(b) an amount equal
to 50% of the net
proceeds of any issue
of RDLF C Shares.
* RDLF making any distribution of capital or income,
other than any such distribution which:
(a) is required to
maintain RDLF'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.
-------------------------- ------------------------------------------------------------ --------
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 had
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
RDLF's underlying investment portfolio.
The Company has no employees and the Board is comprised entirely
of non-executive Directors who are also directors of RDLF. 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 RDLF, the Company aims to conduct itself
responsibly, ethically and fairly.
Gender Diversity
At the end of the financial period, the Company had three male
directors. The Board considers the current structure, size and
composition required of the Board 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
interest 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 on the Board
Christopher Waldron
Chairman
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 2016, the issued share capital of the Company
comprised 50,000 Ordinary Shares of GBP 1.00 each (representing
8.6% of the Company's issued share capital), and 53,000,000 ZDP
Shares of GBP 0.01 each (representing 91.4% 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 period.
Corporate Governance
As set out in the Company's prospectus dated 26 July 2016, the
Company has a Standard Listing on the London Stock Exchange so 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. In the opinion of the Board,
the interests of the Company and the Shareholders will be protected
by the governance procedures adopted by RDLF, which are set out in
the corporate governance section of RDLF's annual report (which can
be found here http://www.rangerdirectlending.uk/documents/ and
which includes compliance with AIC Code).
It is the responsibility of the Board to ensure that there is
effective stewardship of the Company's affairs. As such, the Board
meets quarterly to consider RDLF's compliance with the terms of the
Loan and the Undertaking, based on reports from RDLF's investment
manager. The Board also considers the Company's interim and annual
reports. The Board met once during the period and all Directors
attended each meeting. In addition the Board met and established
committees to approve two placings of ZDP Shares and the
corresponding prospectuses and announcements.
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 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.
Since the Company will have no actual business (in terms of
transactions or cash flows), it is not considered necessary for the
Board to include any independent directors and all matters relevant
for consideration by the Board will be addressed by the
non-independent Board who will have due regard to the interests of
the ZDP Shareholders.
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 of Directors has contracted with the Administrator 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 Directors of the Company and audited by the independent auditor
who report annually to the Board on their findings. The Board of
Directors evaluates and discusses significant accounting and
reporting issues as the need arises.
Going concern
In order to be able to continue as a going concern, the Company
relies on RDLF in its capacity: as the parent company; to repay the
Loan; and as counterparty to the Deed of Undertaking dated 25 July
2016 as described in note 3 to the financial statements. The
Directors are satisfied that the Company has sufficient resources
to continue in operation for the foreseeable future, a period not
less than 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing the
financial statements.
Viability statement
The Directors have assessed the prospects of the Company over
the four year period until the ZDP Repayment Date of 31 July 2021.
The Directors believe this period to be appropriate as they will be
required by the Articles to pass a special resolution in a general
meeting and at a class meeting of ZDP Shareholders.
The Board has reviewed the viability statement of RDLF, which
can be found in the Strategic Report of RDLF's annual report, and
has assessed that RDLF has sufficient resources to fulfil its
obligations to the Company. The key assumptions taken include
having adequate Cover for the final capital entitlement 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 over the four year period 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
-- make an assessment of the Company's ability to continue as a going concern.
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.
Responsibility statement
We 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 profit or 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 28 April 2017 and is signed on behalf of the
Board.
Christopher Waldron
Chairman
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF RANGER DIRECT LING
ZDP PLC
Report on the audit of the financial statements
Opinion
-----------------------------------------------------------------------------------------------------
In our opinion, the financial statements:
* give a true and fair view of the state of the
company's affairs as at 31 December 2016 and of the
company's loss from the date of incorporation to the
period 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 of Ranger Direct Lending ZDP plc (the 'company')
which comprise:
* the Statement of Comprehensive Income;
* the Statement of Financial Position
* the Statement of Cash Flows
* the Statement of Changes in Shareholders' Equity; and
* the related notes 1 to 13.
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
------------------------------------------------------------------------------------------------------
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 risk that we identified was the investment income recognition at the effective interest
rate. The key input in determining the effective interest rate is the estimated fair value
of the loan instrument provided to Ranger Direct Lending Fund Plc.
Note that this is the initial audit period and thus this is the first time our risk assessment
has been performed.
------------------ -------------------------------------------------------------------------------------------------
Materiality The materiality that we used in the period was GBP 5,729. This materiality level was determined
based on our judgement, which included consideration of certain classes of transactions such
as issuance costs.
------------------ -------------------------------------------------------------------------------------------------
Scoping The company's financial activities are not complex in nature. As the company has no subsidiaries
and requires a standalone audit, we treat the company as one single audit component for scoping
purposes. Audit work to respond to the risks of material misstatement was performed directly
by the audit engagement team.
------------------ -------------------------------------------------------------------------------------------------
Conclusions related to going concern
----------------------------------------------------------------------------------------------------------------------
We are required by ISAs (UK) to report in respect of the We have nothing to report in respect of these
following matters where: matters.
* the directors' use of the going concern basis of
accounting in the preparation of the financial
statements is not appropriate; or
* the directors have not disclosed in the financial
statements any identified material uncertainties that
may cast significant doubt about the Company's
ability to continue to adopt the going concern basis
of accounting for a period of at least twelve months
from the date when the financial statements are
authorised for issue.
----------------------------------------------------------------- ---------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
Investment income recognition: effective interest rate
----------------------------------------------------------------------------------------------------------------------
Key audit matter description Investment income of GBP 0.3 million has been recognised
from the date of incorporation of
the company to 31 December 2016. This is the sole source
of income for the company, which
acts to provide financing for its parent company. 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 this 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 appropriateness of the effective
interest rate applied to the intercompany loan held with
the parent company. Determining this
effective interest rate involved consideration of the
implied interest rate on the Zero Dividend
Preference shares ("ZDP shares") in issue.
---------------------------------------------------------- ----------------------------------------------------------
How the scope of our audit responded to the key audit We performed substantive audit procedures which are
matter specifically responsive to the risk and
evaluated the design and implementation of key controls
in place around the risk of revenue
recognition.
We assessed whether the intercompany loan was initially
recognised at fair value with reference
to the implicit rate determined from the issued ZDP
shares, as we considered that to be evidence
of a market rate, and therefore relevant in determining
fair value.
We inquired with management if there was evidence that
could support a different fair value.
Additionally we recalculated the effective interest
income earned based on the rate used.
---------------------------------------------------------- ----------------------------------------------------------
Key observations We concurred with management's assessment that 2% was an
appropriate rate. We noted no issues
in the recalculation of the interest income based on the
rate used.
---------------------------------------------------------- ----------------------------------------------------------
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 GBP 5,729
------------- ----------------------------------------
Basis for This materiality level was determined
determining based on our judgement, which included
materiality consideration of certain classes
of transactions such as issuance
costs.
------------- ----------------------------------------
We agreed with the Audit Committee that we would report to the Committee all audit differences
in excess of GBP 286, 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 audit has been performed for the company's
financial statements. Audit work to respond to the risks of
material misstatement was performed directly by the audit
engagement team.
Other information
----------------------------------------------------------------------------------------------------------------------
The directors are responsible for the other information. The other We have nothing to report in this regard.
information comprises the
information included in the annual report including the Strategic Report
and Directors' Report,
but does not include 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 auditor's 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 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 the 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 for 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.
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.
---------------------------------------------------------
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies 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 and 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 are required to report to We have nothing to report in respect of these
you if, in our opinion: matters.
* we have not received all the information and
explanations we require for our audit; or
* adequate accounting records have not been kept by the
company, 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.
----------------------------------------------------------------- ---------------------------------------------------
Directors' remuneration
Under the Companies Act 2006 we are also required to report if We have nothing to report arising from this
in our opinion certain disclosures matter.
of directors' remuneration have not been made.
----------------------------------------------------------------- ---------------------------------------------------
Other matters
---------------------------------------------------------------------------------------------------
Auditor tenure
We were appointed by the directors on 22 July 2016 to audit the financial statements for the
period from incorporation to 31 December 2016. This is thus the first period of audit for
the company.
---------------------------------------------------------------------------------------------------
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).
---------------------------------------------------------------------------------------------------
Garrath Marshall, ACA (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
28 April 2017
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
2016
Notes (GBP)
ASSETS
Non-current assets
Loan and receivables 3 53,525,047
------------------------------
Total non-current assets 53,525,047
------------------------------
Current assets
Prepayments 1,758
Cash and cash equivalents 50,000
Total current assets 51,758
------------------------------
TOTAL ASSETS 53,576,805
------------------------------
Non-current liabilities
Zero Dividend Preference Shares 4 53,563,069
------------------------------
Total non-current liabilities 53,563,069
------------------------------
Current liabilities
Income tax liability 6 44,026
Accrued expenses and other liabilities 45,744
------------------------------
Total current liabilities 89,770
------------------------------
TOTAL LIABILITIES 53,652,839
------------------------------
NET LIABILITIES (76,034)
==============================
SHAREHOLDER'S DEFICIT
Capital and reserves
Called-up share capital 5 50,000
Capital contribution 3 529,407
Accumulated losses (655,441)
------------------------------
TOTAL SHAREHOLDER'S DEFICIT (76,034)
==============================
The accompanying notes are an integral part of these financial
statements.
The financial statements for the period from 23 June 2016 to 31
December 2016 of Ranger Direct Lending ZDP 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 28 April 2017.
Signed on behalf of the Board of Directors
Christopher Waldron
Chairman
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 23 june 2016 TO 31 DECEMBER 2016
23 Jun to 31 Dec 2016
(GBP)
Notes
Income
Investment income 3 318,599
318,599
----------------------
Expenses
Company secretarial, administration and registrar 52,204
Audit fees 12 24,000
Legal fees 19,148
Other operating expenses 3,118
----------------------
Total expenses 98,470
----------------------
Result from operating activities 220,129
----------------------
Financing
Finance costs 831,544
----------------------
Total finance costs 831,544
----------------------
Loss before tax (611,415)
Tax 6 (44,026)
----------------------
Loss after tax and total comprehensive income for the
period (655,441)
======================
Basic and Diluted Loss Per ordinary Share 9 (13.11)
======================
The accompanying notes are an integral part of these financial
statements.
Other comprehensive income
There were no items of other comprehensive income in the current
period therefore the loss for the period is also the total
comprehensive loss for the period.
STATEMENT OF CHANGES IN SHAREHOLDER'S deficit
For the period FROM 23 june 2016 to 31 DECEMBER 2016
Notes Called-up Capital Accumulated Total
Share contribution losses
capital
(GBP) (GBP) (GBP) (GBP)
---------------- ------------------- --------------------- -------------------
Balance at 23 - - - -
June 2016
Issue of
ordinary
shares 5 50,000 - - 50,000
Capital
contribution
during
the period 3 - 529,407 - 529,407
Loss after tax
and total
comprehensive
loss for
the period - - (655,441) (655,411)
---------------- -------------------
Balance at 31
December
2016 50,000 529,407 (655,441) (76,034)
================ =================== ===================== ===================
The accompanying notes are an integral part of these financial
statements.
STATEMENT OF CASH FLOWS
For the period FROM 23 june 2016 to 31 DECEMBER 2016
23 Jun to 31 Dec 2016
Note (GBP)
Loss before tax (611,415)
Adjustments for:
Investment income (318,599)
Finance costs 831,544
------------------------
Operating cash flows before movements in working capital (98,470)
Increase in prepayments (1,758)
Increase in accrued expenses and other liabilities 45,744
------------------------
Net cash flows used in operating activities (54,484)
------------------------
Financing activities
Expenses paid by the parent company 54,484
Proceeds on issue of Ordinary Shares 5 50,000
------------------------
Net cash flows from financing activities 104,484
------------------------
Net change in cash and cash equivalents 50,000
Cash and cash equivalents at the beginning of the period -
------------------------
Cash and cash equivalents at the end of the period 50,000
========================
The proceeds from the ZDP Shares issued by the Company during
the period (see note 4) and capital contribution by RDLF were
credited directly to RDLF under the Loan Agreement (see note 3) and
as a result neither transaction resulted in cash flows within the
Company.
The accompanying notes are an integral part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
For the period from 23 june 2016 to 31 DECEMBER 2016
1. GENERAL INFORMATION
Ranger Direct Lending ZDP plc ("ZDP" or the "Company") was
incorporated and registered in England and Wales on 23 June 2016 as
a wholly owned subsidiary of Ranger Direct Lending Fund plc
("RDLF") 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
In order to be able to continue as a going concern, the Company
relies on RDLF in its capacity: as the parent company; to repay the
Loan; and as counterparty to the Deed of Undertaking
("Undertaking") dated 25 July 2016 as disclosed in more detail in
note 3. The Directors are satisfied that the Company has sufficient
resources to continue in operation for the foreseeable future, a
period not less than 12 months from the date of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
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 IFRS 9
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 nor listed.
New Accounting Requirements not yet effective
IFRS 9 - "Financial Instruments" (Replacement of IAS 39 -
"Financial Instruments: Recognition and Measurement") - effective
from 1 January 2018
IFRS 9 addresses the recognition, classification and measurement
of financial assets and financial liabilities and may be adopted to
replace IAS 39. IFRS 9 requires financial assets to be classified
into two measurement categories: (i) those measured at fair value;
and (ii) those measured at amortised cost. The determination is
made at initial recognition. The classification depends on the
entity's business model for managing its financial instruments and
the contractual cash flow characteristics of the instrument.
IFRS 9 also replaces the "incurred loss" model in IAS 39 with an
"expected credit loss" model in the measurement of impairment loss.
The new model applies to financial assets that are not measured at
fair value through profit or loss.
The mandatory effective date for application of IFRS 9 is for
accounting periods beginning on or after 1 January 2018. The
Company is currently evaluating the impact that adoption of IFRS 9
will have.
Use of estimates, judgements and assumptions
The following are areas of particular significance to the
Company's financial statements and include the use of estimates and
the application of judgement, which is fundamental to the
preparation of these financial statements. Actual results could
differ from those estimates.
Critical judgements in applying the accounting policies - loan
and borrowings at amortised cost
The Company accounts for the Loan and Zero Dividend Preference
Shares 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
period.
Critical judgements in applying the accounting policies -
interest rate on Intercompany Loan
The Company entered into a Loan Agreement with its parent
company 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 to
a potential transfer pricing issue which is often complex and
requires significant judgement.
RDLF has engaged a third party advisor to provide transfer
pricing advice concerning the arm's length interest rate payable on
the Loan Agreement between the Company and RDLF. The 2% interest
rate has been determined to be reasonable by demonstrating the
commercial effect for the RDLF 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.
Functional and presentational currency
The financial statements are presented in Sterling Pounds
("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.
Impairment of assets
Financial assets are assessed for indicators of impairment at
each reporting date. Financial assets are impaired where objective
evidence exists that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the
estimated future cash flows of the financial assets have been
negatively impacted.
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 period 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.
Organisation costs
Organisation costs are expensed as incurred.
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 borne by RDLF 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 maturities of three
months or less.
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.
3. LOAN AND RECEIVABLES
2016
(GBP)
Amount advanced to Ranger Direct Lending
Fund plc 53,206,448
Investment income during the period 318,599
------------------------
Closing balance 53,525,047
========================
Intercompany Loan Agreement
On 25 July 2016, the Company has entered into a Loan Agreement
with its parent company. 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 its parent company, RDLF, which RDLF 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 during the period amounted to GBP 598,552, and
were borne by RDLF.
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 RDLF 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 period, the parent company contributed GBP 529,407 to
the Company.
4. ZERO DIVID PREFERENCE SHARES
2016
(GBP)
Opening balance -
Issuance of ZDP Shares 53,805,000
Issue costs (1,073,474)
Amortisation of issue costs during the period 45,482
Amortisation of premium during the period (20,175)
Accrued interest during the period 806,236
----------------------------------
Closing balance 53,563,069
==================================
Under the Company's Articles of Association, the Directors are
authorised to issue up to 55,000,000 million ZDP Shares for a
period of 5 years from 25 July 2016. On 1 November 2016, the
Company passed a resolution to authorise 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 further
23,000,000 ZDP Shares at a placing price of GBP 1.035 each.
The ZDP Shares will have a final capital entitlement of GBP
1.2763 per ZDP share on 31 July 2021, being the ZDP Repayment Date.
Accordingly, the aggregate Final Capital Entitlement payable to the
holders of all the ZDP Shares currently in issue on the ZDP
Repayment Date is GBP 67,643,900. (5)
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(6) of not less than 2.75 times immediately following
such issue.
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.
6 Cover of the ZDP Shares shall represent a fraction where the
numerator is equal to the Net Asset Value of RDLF 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.
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 of Association), 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 2016
(GBP)
50,000 Ordinary Shares at GBP 1.00 par
value each 50,000
=================================
The Company's 50,000 Ordinary Shares were issued to its parent
company on 23 June 2016.
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
23 Jun to
31 Dec 2016
United Kingdom Corporation tax expense: (GBP)
Current period tax expense 44,026
Deferred tax -
-------------------
Total tax expense for the period 44,026
===================
The Company's tax charge for the period can be reconciled to the
loss in the statement of comprehensive income as follows:
23 Jun to
31 Dec 2016
(GBP)
Loss before tax on continuing operations (611,415)
-------------------
Tax effect at the UK corporation tax rate
of 20% (122,283)
Tax effect of expenses that are not deductible
in determining taxable profit 166,309
-------------------
Total tax expense for the period 44,026
===================
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 RLDF in favour of the Company, RDLF 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 RDLF 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 RDLF.
The Company has exposure to the following risks from its use of
financial instruments:
- Credit risk
- Liquidity risk
- 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 RDLF 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. RDLF's credit risk is
the risk of financial loss if a counterparty to a Debt Instrument
fails to meet its contractual obligations. RDLF and its investment
manager seek to mitigate RDLF's credit risk by actively monitoring
RDLF's portfolio of Debt Instruments and the credit quality of the
underlying borrowers. RDLF's investment strategy allows it to
potentially reduce risk through investment diversification while
also potentially achieving higher returns by investing in high
yielding direct lending asset classes.
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
RDLF's ability to meet all current and future obligations of the
Company. The Directors consider RDLF's compliance with the
Undertaking and the capital contributions received as
sufficient.
The contractual undiscounted maturity profile of the Company's
financial assets and liabilities is as follows:
2016
(GBP)
In more than one year but not more than five years:
Loan and receivables 58,610,638
==============
Zero Dividend Preference Shares 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 RDLF whereby at any time up to or immediately prior to the ZDP
Repayment Date, RDLF 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 period would have been higher by
GBP 554,125.
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.
The Directors based the fair value of the ZDP Shares on the
traded price of GBP 1.045 per share which was observed on the
London Stock Exchange on 29 December 2016 being the last observable
traded price before period-end. The Loan Agreement and Undertaking
expire on the same date as the ZDP Repayment Date. Due to the
dependence on RDLF 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 "Fair Value Measurement" ("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).
Fair value hierarchy continued
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
2016:
Fair value (GBP) (GBP) (GBP) (GBP)
Level 1 Level 2 Level 3 Total
Loans and receivables - 55,385,000 - 55,385,000
==================== ================= ================= ============
Zero Dividend Preference
Shares 55,385,000 - - 55,385,000
==================== ================= ================= ============
9. BASIC AND DILUTED LOSS PER ORDINARY SHARE
The calculation of loss per share is based on the net loss for
the period of GBP 655,441 and on a weighted average number of
shares of 50,000 Ordinary Shares.
10. ULTIMATE CONTROLLING PARTY
The voting rights in the Company are wholly owned by Ranger
Direct Lending Fund plc, a company incorporated and registered in
England and Wales, and is therefore the immediate and ultimate
controlling party.
11. RELATED PARTIES
On 25 July 2016, the Company entered into a Loan Agreement and
Undertaking with its parent company which are disclosed in more
detail in note 3.
The Company had no employees for the period ended 31 December
2016.
The Directors received no remuneration for their services to the
Company during the period.
12. AUDITOR'S REMUNERATION
The analysis of the auditor's remuneration is as follows:
23 Jun to
31 Dec 2016
(GBP)
Audit fees for annual financial statements 24,000
Non-audit fees related to corporate financial
services charged to issue costs on ZDP Shares 123,600
-------------------------------
147,600
===============================
13. SUBSEQUENT EVENTS
There are no subsequent events that require disclosure in these
financial statements.
COMPANY INFORMATION
Directors
Christopher Waldron
Jonathan Schneider
Matthew Mulford
Company Secretary
Capita Company Secretarial Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Registrar
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Auditor
Deloitte LLP
Chartered Accountants and Statutory Auditor
2 New Street Square
London EC4A 3BZ
United Kingdom
Registered Office
40 Dukes Place
London EC3A 7NH
United Kingdom
Sponsor, Broker and Placing Agent
Liberum Capital Limited
Level 12, Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
United Kingdom
Administrator
Sanne Fiduciary Services Limited
13 Castle Street
St Helier
Jersey JE4 5UT
Channel Islands
English and US Securities Law Legal Adviser
Travers Smith LLP
10 Snow Hill
London EC1A 2AL
United Kingdom
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IPMATMBBTBTR
(END) Dow Jones Newswires
April 28, 2017 11:15 ET (15:15 GMT)
Rdlz Real (LSE:RDLZ)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Rdlz Real (LSE:RDLZ)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024
