RMDL.L Regulatory News (RMDL)

Unaudited Statement of Comprehensive Income

For the period from incorporation on 21 February 2018 to 30 June 2018

Period ended30 June 2018

£'000

Income

Investment income

53

Administration expenses

(41)

Return before finance costs and taxation

12

Finance costs

(93)

Return on ordinary activities before taxation

(81)

Taxation

(3)

Return on ordinary activities after taxation

(84)

Return per Ordinary Share (pence)

(1.68p)

All items in the above statement derive from continuing operations.

Return on ordinary activities after taxation is also the 'Total comprehensive income for the period'.

The notes form an integral part of these unaudited financial statements.

Unaudited Statement of Financial Position

As at 30 June 2018

£'000

Non-current assets

Loan and receivables

10,923

Total non-current assets

10,923

Current assets

Cash and cash equivalents

18

Prepayments and other debtors

128

Total current assets

146

Total assets

11,069

Current liabilities

Other payables

(102)

Total current liabilities

(102)

Non-current liabilities

Zero Dividend Preference Shares

(10,963)

Total non-current liabilities

(10,963)

Total liabilities

(11,065)

Net assets

4

Capital and reserves: equity

Share capital

50

Capital contribution

38

Profit and loss reserve

(84)

Total Shareholders' funds

4

NAV per share - Ordinary Shares (pence)

8.00p

Accrued capital entitlement - ZDP Shares (pence)

100.86p

The Company is registered in England and Wales with registered company number 11217952.

The notes form an integral part of these unaudited financial statements.

Unaudited Statement of Changes in Equity

For the period from incorporation on 21 February 2018 to 30 June 2018

Share capital

Capital contribution

Profit and loss reserve

Total

£'000

£'000

£'000

£'000

Balance as at beginning of the period

-

-

-

-

Return on ordinary activities

-

-

(84)

(84)

Capital contribution

-

38

-

38

Issue of Ordinary Shares

50

-

-

50

Balance as at 30 June 2018

50

38

(84)

4

Share capital represents the nominal value of the Company's Ordinary Shares that have been issued.

The notes form an integral part of these unaudited financial statements.

Unaudited Statement of Cash Flows

For the period from incorporation on 21 February 2018 to 30 June 2018

Period ended30 June 2018

£'000

Operating activities

Return on ordinary activities before finance costs and taxation*

12

Adjustment for taxation

(3)

Increase in receivables

(168)

Increase in other payables

142

Net cash flow from operating activities

(17)

Investing activities

Loan investments

(10,923)

Net cash flow used in investing activities

(10,923)

Financing activities

ZDP Share issue proceeds

10,870

Share issue proceeds

50

Capital contribution

38

Net cash flow from financing activities

10,958

Increase in cash

18

Opening balance at beginning of the period

-

Balance as at 30 June 2018

18

* There was no cash inflow from investment income during the period.

The notes form an integral part of these unaudited financial statements.

Notes to the unaudited financial statements

1. General information

RM ZDP plc ("the Company" or "ZDP") was incorporated in England and Wales on 21 February 2018, with registered number 11217952 as a public company limited by shares under the Companies Act. The Company commenced its operations on 3 April 2018.

2. Significant accounting policies

The principal accounting policies followed by the Company are set out below:

 (a) Basis of accounting

The condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and the Disclosure Guidance and Transparency Rules ('DTRs') of the UK's Financial Conduct Authority. They do not include all of the information required for full annual financial statements and have been prepared on the historical cost basis.

The interim financial statements have been prepared on a going concern basis. The Company relies on its parent company's ability to repay the Loan and in its capacity as counterparty to the Deed of Undertaking (as detailed in note 3) to continue in operation as a going concern.

The functional and presentational currency of the Company is Sterling (£).

 (b) Financial instruments at amortised cost

Loan and receivables and Zero Dividend Preference Shares (ZDP Shares)

The loan made by the Company to its parent company and the ZDP Shares were initially recognised at cost and are subsequently measured at amortised cost using the effective interest rate method.

Financial assets are assessed for impairment at each reporting date.

(c) Income

Interest income is recognised on an accruals basis in the Statement of Comprehensive Income on a time-apportioned basis using the effective interest rate method.

 (d) Expenses

All expenses are accounted for on an accruals basis and recognised in the Statement of Comprehensive Income.

(e) Taxation

The charge for taxation is based upon the net return for the period using the applicable UK corporation tax rate for the reporting period. It takes into account both deductible and non-deductible income and expenses incurred in the reporting period. Deferred taxation will be recognised as an asset or a liability if transactions have occurred at the initial reporting date that give rise to an obligation to pay more taxation in the future, or a right to pay less taxation in the future. An asset will not be recognised to the extent that the transfer of economic benefit is uncertain.

(f) Estimates and assumptions

The preparation of financial statements requires the Directors to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Although these estimates are based on management's best knowledge of current facts, circumstances and, to some extent, future events and actions, the Company's actual results may ultimately differ from those estimates, possibly significantly.

3. Loan and receivables

 Period ended30 June 2018

 £'000

Amount advanced to RM Secured Direct Lending Fund plc

10,870

Investment income during the period

53

Closing balance

10,923

Intercompany Loan Agreement

The ZDP Loan Agreement was entered into immediately prior to Admission, between the Company (as lender) and RMDL (as borrower) pursuant to which, immediately following Admission, the Company lent RMDL the Gross ZDP Placing Proceeds, which has been applied by RMDL towards making investments in accordance with its Investment Policy and for working capital purposes.

The ZDP Loan Agreement provides that, interest will accrue on the ZDP Loan daily at a rate of 2% per annum, compounded annually on each anniversary of Admission of the ZDP Shares and will be rolled up and paid to the Company along with repayment of the principal amount of the ZDP Loan on the date falling 2 Business Days before the ZDP Repayment Date of 6 April 2021, provided that the ZDP Loan shall become repayable by the Company immediately upon the passing of a Winding-Up Resolution, a ZDP Recommended Resolution or a ZDP Reconstruction Resolution.

Deed of Undertaking

The Undertaking was entered into immediately prior to Admission, between the Company (as beneficiary) and RMDL (as grantor) pursuant to which, to the extent that the Final Capital Entitlement multiplied by the number of outstanding ZDP Shares as at the ZDP Repayment Date (or, if earlier, the accrued capital entitlement multiplied by the number of outstanding ZDP Shares following the date on which a Winding-Up Resolution is approved) exceeds the aggregate principal amount and accrued interest due from RMDL to the Company pursuant to the ZDP Loan Agreement as at the ZDP Repayment Date (the "Additional Funding Requirement"), RMDL shall: (i) subscribe an amount equal to or greater than the Additional Funding Requirement for Subsidiary Ordinary Shares (the "Additional Shares"); or (ii) make a capital contribution or gift or otherwise pay an amount equal to or greater than (where rounding is required) the Additional Funding Requirement. Where applicable, the Additional Shares may be Subsidiary Ordinary Shares or such other class of shares in the Company as is agreed between the Company and RMDL.

During the period to 30 June 2018, further to its initial subscription for Ordinary Shares, RMDL contributed £38,000 to the Company.

4. Taxation

 Period ended30 June 2018

Analysis of tax charge for the period

 £'000

Corporation tax

3

Total tax charge for the period

3

5. Basic and diluted loss per Ordinary Share

The calculation of loss per Ordinary Share is based on the net loss for the period of £84,000 and a weighted average number of 50,000 Ordinary Shares in the period.

6. Zero Dividend Preference ('ZDP') Shares

 Period ended30 June 2018

 £'000

Opening balance

-

Issue proceeds of ZDP Shares

10,870

Accrued interest during the period

93

Closing balance

10,963

On 3 April 2018, the Company issued 10,869,950 ZDP Shares of a nominal value of 1 pence each at a placing price of 100 pence each to raise gross proceeds of £10,869,950, which were allotted and fully paid up.

Rights attaching to the ZDP Shares

The ZDP Shares carry no right to receive dividends or other distributions out of revenue or any other profits of the Company.

The ZDP Shares will have a life of 3 years and, on that basis, a Final Capital Entitlement of 110.91 pence per ZDP Share on the ZDP Repayment Date of 6 April 2021, equivalent to a Redemption Yield of 3.5% per annum (compounded annually) on the Issue Price.

Under the obligations of ZDP Loan Agreement, the Ordinary Shares and the C Shares of RMDL rank behind the ZDP Shares.

Voting rights of ZDP Shares

The ZDP Shareholders shall have the right to receive notice of all general meetings of the Company for information purposes, but shall have no right to attend or vote at any such meeting of the Company. For the avoidance of doubt:

• any resolution to alter, modify or abrogate the special rights or privileges attached to the ZDP Shares shall require separate class consent (by special resolution) at a class meeting of ZDP Shareholders convened and held in accordance with the ZDP Articles (a "ZDP Class Consent"); and

• any ZDP Recommended Resolution or any resolution to approve a, ZDP Reconstruction Proposal (if required) shall only be approved by Ordinary Shareholders of the Company provided they have first been approved by way of a ZDP Class Consent.

7. Share capital

 As at 30 June 2018

Allotted, issued and fully paid:

Number ofshares

 Nominal£'000

Ordinary Shares of £1 each

50,000

50

On incorporation, the Company issued 50,000 Ordinary Shares of a nominal value of £1.00 each which were subscribed by RMDL and are fully paid up.

Voting rights

Save as described in note 6, the Ordinary Shares have full voting rights in the Company. The ZDP Shareholders shall have the right to receive notice of all general meetings of the Company for information purposes, but shall have no right to attend or vote at any such meeting of the Company.

8. Net asset value ('NAV') / Accrued capital entitlement per ZDP Share

As at 30 June 2018

Shares in issue

 Attributable to Shareholders (£'000)

 Accrued capital entitlement per share (p)

 NAV per share (p)

Ordinary Shares

50,000

4

n/a

8.00

Zero Dividend Preference Shares

10,869,950

10,963

100.86

n/a

The accrued capital entitlement per ZDP Share is considered to be an Alternative Performance Measure.

9. Related parties

Details of the loan agreement between the Company and its parent company, RMDL, are disclosed in note 3.

The Directors shall not be entitled to receive remuneration in respect of their performance of their duties as ZDP Directors nor shall they be entitled to receive any expenses in relation to their role of ZDP Directors. As at the period end, the Directors held no shareholding in the Company.

The Company had no employees during the period ended 30 June 2018.

10. Subsequent events

There are no post period end events other than those disclosed in this report.

11. Status of the report

These interim financial statements are not the Company's statutory accounts for the purposes of section 434 of the Companies Act 2006. They are unaudited. The unaudited Half-yearly financial report will be made available to the public at the registered office of the Company. The report will also be available in electronic format on the parent Company's website, www.rm-funds.co.uk.

The Half-yearly financial report was approved by the Board on 9 August 2018.