TIDMPCTZ
28 June 2016
PICTON ZDP LIMITED
ANNUAL RESULTS
(THE "COMPANY")
Picton ZDP Limited (LSE: PCTZ) announces its results for the year ended 31
March 2016.
The Company's principal objective is to provide Zero Dividend Preference Shares
with a predetermined final capital entitlement. It is recommended that these
accounts are read in conjunction with those of its parent, Picton Property
Income Limited, also issued today.
For further information:
Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150, jverstringhe@tavistock.co.uk
Picton Capital Limited
Michael Morris, 020 7011 9980, michael.morris@picton.co.uk
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Katie Le Page, 01481 745 001, team_picton@ntrs.com
Directors' report
The Directors present their report and the audited financial statements of
Picton ZDP Limited (the "Company") for the year ended 31 March 2016.
Comparatives are provided for the year ended 31 March 2015. It is recommended
that these accounts are read in conjunction with the consolidated accounts of
Picton Property Income Limited, (the "Parent") issued as at 28 June 2016.
Company's business and objective
Picton ZDP Limited is a Guernsey registered company, established to issue zero
dividend preference shares which mature in October 2016 ("ZDP shares"). The
Company is a wholly owned subsidiary of Picton Property Income Limited, an
investment company registered in Guernsey.
The Company's principal investment objective is to provide the ZDP shares with
a predetermined final capital entitlement. On repayment of the ZDP shares the
shareholders are entitled to receive an amount equal to 100 pence per share
increased daily at an equivalent annual rate of 7.25% per annum.
The repayment date is 15 October 2016 and the final capital entitlement will be
132.2 pence per ZDP share. Once repayment to the ZDP shareholders is made the
Directors intend to wind up the affairs of the Company.
The Parent has entered into a Contribution Agreement with the Company to
provide an undertaking to pay any costs and expenses incurred by the Company
and to enable the Company to meet its payment obligations in respect of the ZDP
shares. Although the Parent has entered into an undertaking to meet all
liabilities as they fall due, it is important to note that all risks are borne
by the ZDP shareholders who are not guaranteed to receive their full capital
entitlement.
Share capital
The Company has two ordinary shares in issue as at 31 March 2016.
In total 22,000,000 ZDP shares were admitted to the official list of the London
Stock Exchange on 15 October 2012.
Going concern
The financial statements have been prepared on a non-going concern basis as the
Directors intend to wind up the affairs of the Company following the repayment
of the ZDP shares, which will be funded by the Parent. In presenting the
financial statements on a non-going concern basis, with the exception of
presenting the zero dividend preference shares as current liabilities and the
amounts due from the Parent as current assets, the Directors do not consider
there to be a material difference in the values and presentation of the
Company's assets and liabilities compared to if the financial statements had
been prepared on a going concern basis. The Directors have not accrued for the
additional costs of winding up the Company as these will be covered by the
Parent.
Results
The results for the year are set out in the Statement of Comprehensive Income
on page 4.
Taxation
The Company is exempt from Guernsey Income Tax under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989 and is charged an annual exemption fee of GBP
1,200 (2015: GBP600).
Directors and directors' interests
The Directors of the Company holding office during the year were as follows:
Nicholas Thompson
Robert Sinclair
Trevor Ash (resigned 1 October 2015)
Vic Holmes
Roger Lewis
Michael Morris (appointed 1 October 2015)
All Directors were appointed on incorporation except Vic Holmes, who was
appointed on 1 January 2013, and Michael Morris, who was appointed on 1 October
2015. None of the Directors hold a beneficial interest in the Company, however
Mrs Elizabeth Thompson holds 45,249 ZDP shares. Any Director's interest in the
shares of the Parent is disclosed in the consolidated accounts of the Parent.
The Company has prepared these financial statements in compliance with the
Companies (Guernsey) Law, 2008.
Statement of directors' responsibilities
The Directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law they have elected to prepare the financial
statements in accordance with International Financial Reporting Standards as
issued by the IASB and applicable law.
The financial statements are required by law to 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:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business. The
financial statements have been prepared on a non-going concern basis as the
Directors intend to wind up the affairs of the Company following the repayment
of the ZDP shares.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies (Guernsey) Law, 2008. 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.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Directors' Report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's auditors are unaware; and each Director has
taken all the steps that he ought to have taken as a Director to make himself
aware of any relevant audit information and to establish that the Company's
auditor are aware of that information.
Auditor
The Directors re-appointed KPMG Channel Islands Limited (the "Auditor") as
auditor of the Company.
Responsibility statement
We confirm to the best of our knowledge:
* the financial statements, prepared in accordance with International
Financial Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company as required
by Disclosure and Transparency Rules ('DTR') 4.1.12 R; and
* the Directors' Report includes a fair review of development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that it faces as required
by DTR 4.1.12 R.
By order of the Board
Robert Sinclair
Director
27 June 2016
Independent auditor's report to the members of Picton ZDP Limited
We have audited the financial statements (the "financial statements") of Picton
ZDP Limited (the "Company") for the year ended 31 March 2016 which comprise the
statement of comprehensive income, the statement of changes in equity, the
balance sheet and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and International Financial
Reporting Standards as issued by the IASB. As described in note 2, the
financial statements have been prepared on a non-going concern basis.
This report is made solely to the Company's members, as a body, in accordance
with section 262 of the Companies (Guernsey) Law, 2008. 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.
Respective responsibilities of directors and auditor
As explained more fully in the statement of directors' responsibilities set out
on pages 1 and 2, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of the financial
statements. In addition, we read all the financial and non-financial
information in the annual report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications
for our report.
Opinion on the financial statements
In our opinion the financial statements:
* give a true and fair view of the state of the Company's affairs as at 31
March 2016 and of its result for the year then ended;
* are in accordance with International Financial Reporting Standards as
issued by the IASB; and
* comply with the Companies (Guernsey) Law, 2008.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:
* the Company has not kept proper accounting records; or
* the financial statements are not in agreement with the accounting records;
or
* we have not received all the information and explanations, which to the
best of our knowledge and belief are necessary for the purpose of our
audit.
Neale D Jehan
for and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors, Guernsey
27 June 2016
Statement of comprehensive income
For the year ended 31 March 2016
Notes 2016 2015
GBP000 GBP000
Expenses
Administration expenses 4 (10) (10)
Other operating expenses (21) (16)
Result from operating activities (31) (26)
Financing
Finance costs 8 (2,083) (1,949)
Total finance costs (2,083) (1,949)
Tax 5 - -
Total comprehensive loss for the year (2,114) (1,975)
Notes 1 to 12 form part of these financial statements.
Statement of changes in equity
For the year ended 31 March 2016
Notes Share Capital Accumulated Total
Capital Contribution Loss GBP000
GBP000 GBP000 GBP000
Balance as at 31 March 2014 - 3,083 (3,083) -
Total comprehensive loss for the year - - (1,975) (1,975)
Contribution by parent company 7 - 1,975 - 1,975
Balance as at 31 March 2015 - 5,058 (5,058) -
Total comprehensive loss for the year - - (2,114) (2,114)
Contribution by parent company 7 - 2,114 - 2,114
Balance as at 31 March 2016 - 7,172 (7,172) -
Notes 1 to 12 form part of these financial statements.
Balance sheet
As at 31 March 2016
Notes 2016 2015
GBP000 GBP000
Non-current assets
Amount due from parent company 7 - 25,864
Other assets 6 - 98
Total non-current assets - 25,962
Current assets
Amount due from parent company 7 27,952 -
Other assets 6 98 183
Total current assets 28,050 183
Total assets 28,050 26,145
Non-current liabilities
Zero dividend preference shares 8 - (26,134)
Total non-current liabilities - (26,134)
Current liabilities
Zero dividend preference shares 8 (28,034) -
Accounts payable and accruals (16) (11)
Total current liabilities (28,050) (11)
Total liabilities (28,050) (26,145)
Net assets - -
Equity
Share capital 9 - -
Capital contribution 7,172 5,058
Accumulated loss (7,172) (5,058)
Total equity - -
These financial statements were approved by the Board of Directors on 27 June
2016 and signed on its behalf by:
Robert Sinclair
Director
Notes 1 to 12 form part of these financial statements.
Notes to the financial statements
For the year ended 31 March 2016
1. General information
Picton ZDP Limited (the "Company") was incorporated on 2 September 2012 and is
registered in Guernsey. The Company is a wholly owned subsidiary of Picton
Property Income Limited (the "Parent"), which is an investment company
registered in Guernsey.
The financial statements are prepared for the year ended 31 March 2016 with
comparatives provided for the year ended 31 March 2015.
2. Significant accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost
convention, they give a true and fair view, have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as issued by the IASB
and are in compliance with the Companies (Guernsey) Law, 2008.
The financial statements are presented in pounds sterling which is the
Company's functional currency. All financial information presented in pounds
sterling has been rounded to the nearest thousand, except when otherwise
indicated.
The accounting policies applied by the Company are the same as those applied by
the Company in its financial statements for the year ended 31 March 2015, with
the exception of the following which have had no effect on the financial
statements:
* Annual Improvements to IFRSs (2010-2012 Cycle)
* Annual Improvements to IFRSs (2011-2013 Cycle)
* IAS 19 Employee Benefits - Defined Benefit Plans: Employee Contribution
At the date of approval of these financial statements, the Directors do not
consider that any standards or interpretations in issue but not yet effective
will have a material impact on the financial statements of the Company prior to
its winding up.
Going concern
The financial statements have been prepared on a non-going concern basis as the
Directors intend to wind up the affairs of the Company following the repayment
of the ZDP shares, which will be funded by the Parent. In presenting the
financial statements on a non-going concern basis, with the exception of
presenting the zero dividend preference shares as current liabilities and the
amounts due from the Parent as current assets, the Directors do not consider
there to be a material difference in the values and presentation of the
Company's assets and liabilities compared to if the financial statements had
been prepared on a going concern basis. The Directors have not accrued for the
additional costs of winding up the Company as these will be covered by the
Parent.
Statement of cash flows
No Statement of Cash Flows is presented as all funding activities are provided
by the Parent. The Company does not operate any bank accounts.
Capital contribution
Capital contributions from the Parent are recognised in the financial
statements to meet current and future obligations of the Company in accordance
with the Contribution Agreement entered into between the Parent and the Company
on 12 September 2012. These contributions are recognised directly in equity.
Loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value
of the consideration received associated with the borrowing. After initial
recognition, loans and borrowings are subsequently measured at amortised cost
using the effective interest rate method. Amortised cost is calculated by
taking into account any issue costs, and any discount or premium on settlement.
Gains and losses are recognised in profit or loss of the Statement of
Comprehensive Income when the liabilities are derecognised, as well as through
the amortisation process.
Significant estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets, liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making judgements
about the carrying values of assets and liabilities that are not readily
apparent from other sources. No critical judgements or estimates have been made
by the Directors in the period.
3. Operating segments
The Board sets the Company's strategy in accordance with the principal
objective and therefore retains full responsibility for investment policy and
strategy. The Board will always act under the terms of the Prospectus. The
Board has considered the requirements of IFRS 8 'Operating Segments'. The Board
is of the opinion that the Company operates in one reportable industry segment
therefore no segmental reporting is required.
4. Administration expenses
2016 2015
GBP000 GBP000
Administration fees 10 10
The Company receives administration services from Picton Capital Limited, a
fellow subsidiary of Picton Property Income Limited. The fees payable are fixed
at GBP10,000 per annum (2015: GBP10,000).
5. Tax
The Directors conduct the affairs of the Company such that the management and
control of the Company is not exercised in the United Kingdom and that the
Company does not carry on a trade in the United Kingdom.
The Company is exempt from Guernsey income tax under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989. A fixed fee of GBP1,200 is payable per year to
the States of Guernsey in respect of this exemption.
6. Other assets
2016 2015
GBP000 GBP000
Current
Capitalised issue costs 98 183
Non-current
Capitalised issue costs - 98
98 281
Issue costs totalling GBP729,000 have been capitalised and are being amortised
over the term of the ZDP share issue. For the year ended 31 March 2016, GBP
183,000 of these costs were written off to the Statement of Comprehensive
Income (2015: GBP183,000).
7. Amounts due from parent company
2016 2015
GBP000 GBP000
Carrying value at start of year 25,864 23,919
Additions under Contribution Agreement 2,114 1,975
Repayments (26) (30)
Carrying value at end of year 27,952 25,864
Funds raised through the ZDP share issue, after the deduction of issue costs of
GBP729,000 (see Note 6), totalled GBP21,271,000. These funds have been transferred
to the Parent as a non-interest bearing loan repayable on demand according to
the Loan Agreement dated 12 September 2012.
On 12 September 2012 the Company entered into a Contribution Agreement with the
Parent. The agreement provides an undertaking by the Parent to pay any costs
and expenses incurred by the Company in respect of its operation and the
continuation of its business and to enable the Company to meet its payment
obligations in respect of the ZDP shares. The Parent has agreed to support the
Company's obligations and has agreed to certain protections to ensure the
Parent does not make distributions or returns of capital without retaining
sufficient capital to meet its obligations to the Company. The Parent provided
an undertaking of costs totalling GBP2,114,000 (2015: GBP1,975,000), of which GBP
26,000 (2015: GBP30,000) was settled by the Parent during the year.
8. Zero dividend preference shares
2016 2015
GBP000 GBP000
Carrying value at start of year 26,134 24,368
Capital additions 1,900 1,766
Carrying value at end of year 28,034 26,134
On 15 October 2012 the Company issued 22,000,000 zero dividend preference
shares ('ZDP shares') at 100 pence per share. The ZDP shares have an
entitlement to receive a fixed cash amount on 15 October 2016, being the
maturity date, but do not receive any dividends or income distributions.
Additional capital accrues to the ZDP shares on a daily basis at a rate
equivalent to 7.25% per annum, resulting in a final capital entitlement of
132.2 pence per share. The ZDP shares are listed on the London Stock Exchange.
At the reporting date the Company has accrued for GBP6,034,000 (2015: GBP4,134,000)
of additional capital. The total amount repayable at maturity is GBP29,114,000.
The ZDP shares do not carry the right to vote at general meetings of the
Company, although they carry the right to vote as a class on certain proposals
which would be likely to materially affect their position. In the event of a
winding-up of the Company, the capital entitlement of the ZDP shares (except
for any undistributed revenue profits) will rank ahead of ordinary shares but
behind other creditors of the Company.
9. Share capital
The Company has one class of share which carries no right to fixed income. The
authorised share capital of the Company is two ordinary share issued at GBP1
each. The Company issued one ordinary share at par value to its Parent on 2
September 2012 and one ordinary share at par value to Picton Finance Limited on
27 February 2014.
10. Risk management
The Company's principal investment objective is to provide the ZDP shares with
a predetermined final capital entitlement. The Directors regularly monitor and
review all the risks noted below.
General risk
An investment in ZDP shares is suitable only for investors capable of
evaluating the risks and merits of such an investment and who have sufficient
resources to bear any loss (including total loss) which may result from the
investment. Although the Parent has entered into an undertaking to meet the
Company's liabilities, essentially all risks are borne by the holders of the
ZDP shares. The market offer price of the ZDP shares at 31 March 2016 was
128.25 pence per share (2015: 126 pence).
Credit risk
The obligations of the Parent to repay the ZDP shares and discharge its
obligations pursuant to the undertakings will be subordinated to the claims of
the Parent's other creditors on a winding up. If, at the repayment date, the
Parent has insufficient assets then its obligations to repay the ZDP shares may
be satisfied only in part or not at all.
Accordingly the Company may have insufficient assets to satisfy the current or
final capital entitlement of the ZDP shares.
Liquidity risk
The Company's exposure to liquidity risk depends upon the Parent's ability to
promptly meet all current and future obligations of the Company. The Parent's
liquidity risk is the risks that it will encounter in realising assets or
otherwise raising funds to meet its financial commitments. The Parent invests
in commercial property in which there is a market where investments are not
always readily realisable.
Interest rate risk
Returns from ZDP shares are fixed at the time of purchase, as are the final
redemption proceeds. Consequently, if a share is held until redemption date,
the total return achieved is unaltered from its purchase date.
Capital risk management
The capital structure of the Company consists of zero dividend preference
shares, as disclosed in Note 8, and equity attributable to the Parent
comprising issued capital and retained earnings. The Company is not subject to
any external capital requirements. The Company has entered into a Contribution
Agreement with its Parent to meet any liabilities arising from the Company's
operations.
11. Controlling and related parties
The Company is wholly owned by Picton Property Income Limited (the "Parent"), a
Guernsey registered company. The Parent is therefore the immediate and ultimate
controlling party.
On 12 September 2012 the Parent entered into a Contribution Agreement with the
Company to provide an undertaking to pay any costs and expenses incurred in
respect of the operation and continuation of the Company's business. As at 31
March 2016 the Parent owed GBP6,681,000 to the Company under the Contribution
Agreement (2015: GBP4,598,000).
The Company also entered into a non-interest bearing Loan Agreement with the
Parent dated 12 September 2012. As at 31 March 2016 the Parent owed GBP21.3
million to the Company under the Loan Agreement (2015: GBP21.3 million).
Picton Capital Limited, a fellow subsidiary of the Parent, was paid
administration expenses in the period of GBP10,000 by the Company (2015: GBP
10,000). As at 31 March 2016 the Company owed GBP2,500 to Picton Capital Limited
(2015: GBP2,500).
The Directors received no remuneration for their services to the Company during
the year.
12. Events after the balance sheet date
There are no subsequent events that require disclosure in these financial
statements.
Company information
Directors Registered office
Nicholas Thompson (Chairman) PO Box 255
Michael Morris (appointed 1 October 2015) Trafalgar Court
Vic Holmes Les Banques
Roger Lewis St Peter Port
Robert Sinclair Guernsey
Trevor Ash (resigned 1 October 2015) GY1 3QL
Administrator and Secretary Registered Number: 55586
Northern Trust International Fund Auditor
Administration KPMG Channel Islands Limited
Services (Guernsey) Limited Glategny Court
PO Box 255, Trafalgar Court Glategny Esplanade
Les Banques St Peter Port
St Peter Port Guernsey
Guernsey GY1 1WR
GY1 3QL Registrar (ZDP shares)
T: 01481 745001 Computershare Investor Services (Guernsey)
E: team_picton@ntrs.com Limited
Investment Manager to the Parent NatWest House
Picton Capital Limited Le Truchot
28 Austin Friars St Peter Port
London Guernsey
EC2N 2QQ GY1 1WD
T: 020 7628 4800 Brokers to the Parent
E: enquiries@picton.co.uk JP Morgan Securities Limited
Solicitors 25 Bank Street
As to English law London
Norton Rose Fulbright LLP E14 5JP
3 More London Riverside
London Stifel Nicolaus Europe Limited
SE1 2AQ 150 Cheapside
As to Guernsey law London
Carey Olsen EC2V 6ET
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey
GY1 4BZ
END
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