MCAP.L Regulatory News (MCAP)

Retail Charity Bonds plc

Audited Condensed Financial Statements

for the period ended 31 August 2014

Registered number: 8940313

Date of incorporation: 14th March, 2014

Retail Charity Bonds plc

Contents of the Condensed Financial Statements

for the Period Ended 31 August 2014

Contents

Retail Charity Bonds plc

Reference and Administrative Details

for the Period Ended 31 August 2014

Retail Charity Bonds plc

Report of the Independent Auditors

for the period ended 31 August 2014

We report on the condensed financial statements of Retail Charity Bonds plc ("the Company") on pages 6 to 14. The condensed financial statements have been prepared on the basis of the accounting policies set out at Note 1 of the condensed financial statements. This report is required by paragraph 8.2 of Annex VII of Appendix 3.1.1 of the Prospectus Rules and is given for the purpose of complying with that paragraph and for no other purpose.

The Directors of the Company are responsible for preparing the condensed financial statements in accordance with UK GAAP.

It is our responsibility to form an opinion on the condensed financial statements and to report our opinion to you.

Save for any responsibility arising under of Prospectus Rule 5.4.2R(2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law, we do not accept or assume responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 9.1 of Annex VII of Appendix 3.1.1 of the Prospectus Rules, or consenting to its inclusion in the Prospectus.

We conducted our work in accordance with Standards for Investment Reporting issued by the Financial Reporting Council in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the condensed financial statements. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the condensed financial statements and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the condensed financial statements are free from material misstatement whether caused by fraud or other irregularity or error.

In our opinion, the condensed financial statements give, for the purposes of the Prospectus, a true and fair view of the state of affairs of Retail Charity Bonds plc as at the dates stated and of its results, cash flows and changes in equity for the periods then ended in accordance with UK GAAP.

Yours faithfully

BAKER TILLY CORPORATE FINANCE LLP

Regulated by the Institute of Chartered Accountants in England and Wales 

Baker Tilly Corporate Finance LLP is a limited liability partnership registered in England and Wales, registered no. OC325347. A list of the names of members is open to inspection at the registered office 25 Farringdon Street London EC4A 4AB.

Retail Charity Bonds plc

Profit and Loss Account

for the period ended 31 August 2014

The period from incorporation on 14 March 2014 to 31 August 2014 represents the first period of trading for the company.

All of the above results are derived from continuing activities. All gains and losses recognised in the year are included above.

The notes on pages 9 to 14 form part of these financial statements.

Retail Charity Bonds plc

Balance sheet

as at 31 August 2014

The financial statements were approved by the Directors on 9 March 2015 and were signed on their behalf by:

The notes on pages 9 to 14 form part of these financial statements.

Retail Charity Bonds plc

Cash Flow Statement

Retail Charity Bonds plc

Notes to the Financial Statements

for the period ended 31 August 2014

1. ACCOUNTING POLICIES

The condensed financial statements have been prepared in accordance with applicable Financial Reporting Standards in the United Kingdom (UK GAAP).

A summary of the more important accounting policies, which have been consistently applied, are set out below:

Basis of preparation

The financial statements have been prepared on a going concern basis and the historical cost convention.

Financial instruments

Financial instruments are classified and accounted for according to the substance of the contractual arrangement.

Bonds and loans are held at amortised cost using the effective interest rate method. The discount and issue costs of the bond are amortised over its life.

Short term borrowings and overdrafts are classified as other liabilities and are held at cost.

Bond issuing costs

Costs in respect of the issue of new bonds are deducted from proceeds and amortised to the profit and loss account over the expected life of the bond.

2. STAFF COSTS

The company employs no staff. All staff are provided by Allia Bond Services Limited.

None of the directors had any interest in the company and none received remuneration for their services.

3. INTEREST RECEIVABLE AND SIMILAR INCOME

4. INTEREST PAYABLE AND SIMILAR CHARGES

5. TAX ON PROFIT OR ORDINARY ACTIVITIES

The tax assessed for the period is equal to the standard rate of corporation tax in the UK at 23%.

6. DEBTORS: AMOUNTS DUE AFTER MORE THAN ONE YEAR

The loan to Golden Lane Housing is unsecured (see note 9 for further details).

7. DEBTORS

8. CREDITORS:AMOUNTS FALLING DUE WITHIN ONE YEAR

9. CREDITORS:AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

On 29 July, 2014 the Company successfully issued a £11 million bond at a coupon of 4.375% with repayment due in full on 29 July 2021. The funds received after bond issue costs were £10,867,000 which equates to a fixed interest rate of 4.575%.

The costs of issuing the bond were £133,000 leaving a net balance of £10,867,000 which was lent to Golden Lane Housing Limited (the "Charity"), an independent charity established in 1998 by Mencap.

The bond issue costs are amortised over the term of the bond using the effective interest rate method. The Charity is liable to the Company for both the bond coupon and the amortisation cost of the bond issue cost, under an agreement between the companies.

The Company's rights to receive payments under the loan from the Charity and certain related rights under the issue documents for the Bonds (the "Charged Assets") are charged as security for the benefit of the investors in the Bonds. This means that if the Charity fails to make payments of interest or repayments of principal under the loan agreement and this results in the occurrence of an event of default under the terms and conditions of the Bonds, the Trustee (acting on the instructions of the Bondholders) may enforce the terms of the Loan against the Charity.

The bond prospectus stipulates that the obligations of the Company to pay amounts due on the Bond are limited to the Charged Assets. Therefore, the risk of default by the Charity is fully borne by the investors in the Bonds.

The borrowings are due as follows:

10. SHARE CAPITAL

During the period 50,000 £1 Ordinary shares were issued at par. £12,500 of the issued share capital is allotted, called up, but not paid. The remaining £37,500 is allotted, but not called up or paid.

In addition, one ordinary share was issued, which is designated as a "Special Share". In respect of any resolution proposed in relation to any alteration in the articles of association of the Company, the holder of the Special Share is entitled to cast such number of votes as is necessary to defeat the resolution and, in the event that the holder of the Special Share has not voted in respect of any such resolution, such resolution will be deemed not to have been passed. The holder of the Special Share shall not be entitled to vote in relation to any matter other than a proposed alteration in the articles of association of the Company.

11. PROFIT AND LOSS ACCOUNT

12. MOVEMENT IN SHAREHOLDER'S FUNDS

13. RELATED PARTIES

Philip Wright, a director of Retail Charity Bonds plc, is also a director of Allia Limited. Timothy Jones, a director of Retail Charity Bonds plc, is also Company Secretary and Chief Executive of Allia Limited. During the period to 31 August, 2014 the company received income of £31,000 from Allia Bond Services Limited, a wholly owned subsidiary of Allia Limited. At 31 August, 2014, the company owed Allia Bond Services Limited £25,000 and was owed £31,000 from Allia Bond Services Limited.

In addition, Allia Limited holds the £1 Special Share described in note 10.

14. ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY

The ultimate parent undertaking and controlling party is RC Bond Holdings Limited, which is a company limited by guarantee (registered company number 8936422). The results of the company are not consolidated in the accounts of any other company.

15. POST BALANCE SHEET EVENTS

There were no significant post balance sheet events requiring disclosure in these financial statements.