UIL : Finance Limited Report and Accounts for the year ended 30 June 2021

UIL Finance Limited

REPORT AND ACCOUNTS

FOR THE YEAR ENDED 30 JUNE 2021

UIL Finance Limited

REPORT AND ACCOUNTS

for the year ended 30 June 2021

Contents	Page
Company Directory	2
Strategic Report	3
Directors' Report	4
Statement of Directors' Responsibilities	6
Independent Auditor's Report	7
Income Statement	11
Statement of Changes in Equity	11
Statement of Cash Flows	11
Statement of Financial Position	12
Notes to the Accounts	13

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UIL Finance Limited

COMPANY DIRECTORY

Registered Office	Clarendon House
	2 Church Street
	Hamilton HM11
	Bermuda
Directors	Peter Burrows, AO (Chairman)
	Stuart Bridges
	Alison Hill
	Christopher Samuel
	David Shillson
Company Number	39479
Legal Entity Identifier	213800JPJWZ5P3QJX538
Auditor	KPMG LLP
	15 Canada Square
	Canary Wharf
	London E14 5GL
	United Kingdom
Date of Formation	17 January 2007
Nature of Business	Closed end investment company
Ordinary Shareholder and Parent Company	UIL Limited

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UIL Finance Limited

STRATEGIC REPORT

The Strategic Report is designed to provide shareholders with an insight into the operations of the Company during the period. In particular, it gives information on:

• the Company's objective and investment policy;
• the regulatory and competitive environment within which the Company operates;
• the Board's strategy for achieving its stated objectives;
• principal risks and risk management; and
• key performance indicators.

Objective

The Company's investment objective is to finance and fund the final capital entitlements of the zero dividend preference ("ZDP") shares.

Investment policy

The Company seeks to fund the final capital entitlements of the ZDP shares by lending current asset funds to its parent company, UIL Limited.

Regulatory and competitive environment

The Company is obliged to comply with Bermuda law, the Listing Rules of the Financial Conduct Authority and International Financial Reporting Standards as adopted by the European Union ("IFRSs as adopted by the EU"). The Company is exempt from taxation, except insofar as it is withheld from income received. Under Bermuda law, the Company may not distribute income by way of a dividend unless, after distribution of the dividend, the realisable value of the Company's assets would be greater than the aggregate of its liabilities. ICM Investment Management Limited ("ICMIM") is the Alternative Investment Fund Manager of UIL Limited and joint investment manager with ICM Limited ("ICM"). ICM was appointed as company secretary with effect from 1 July 2017.

Strategy for achieving objectives

The Company's performance in pursuing its objective is based on the ability of its parent company to repay the intragroup loan to the Company. UIL Limited has provided an undertaking to provide sufficient funds to the Company to meet each redemption as it falls due.

Principal risks

The principal underlying risk of the Company continues to relate to its ability to repay the ZDP shares when they fall due. This is dependent on the asset performance of the parent company. At 30 June 2021, the parent company had net assets of £363,751,000 (2020: £251,235,000) after providing for amounts due to ZDP shareholders. Details of the ZDP shares are set out in note 7 to the accounts.

A further risk faced by the Company is that of a regulatory nature. A regulatory or legal breach could lead to financial penalties or a qualified audit report. The Company uses all reasonable efforts to ensure that the Company adheres to the relevant statutory and regulatory requirements.

Key Performance Indicators

The Board assesses the Company's success in pursuing its objectives in the ability to provide for the amounts due to the ZDP shareholders which is based on the ability of its parent company to repay the intra-group loan to the Company. The KPIs for the parent company can be found in UIL Limited's Annual Report.

This Strategic Report was approved by the Board of Directors on 22 September 2021.

ICM Limited

Company Secretary

22 September 2021

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UIL Finance Limited

DIRECTORS' REPORT

The Directors present their report and accounts of the Company for the year ended 30 June 2021.

Principal activity and status

UIL Finance Limited (the "Company" or "UIL Finance") is a Bermuda exempted, closed ended investment company with company registration number 39479. The Company's issued ZDP shares are listed on the standard segment of the main market of the London Stock Exchange.

Corporate Governance

Bermuda does not have its own corporate governance code and, since the Company has a Standard Listing on the Official List of the Financial Conduct Authority, the Company is not required to comply or provide an explanation for any non-compliance with the UK Corporate Governance Code issued by the Financial Reporting Council.

The Board meets at least twice a year to consider strategic affairs and to approve the half yearly report and the annual report and accounts.

In the Directors' opinion, the interests of the Company and its shareholders are adequately covered by the governance procedures applicable to its parent company, UIL Limited. For example, UIL Limited's Audit & Risk Committee considers the financial reporting procedures and oversees the internal control and risk management systems for the Group as a whole and the Directors see no benefit in convening a separate Audit Committee or any other committee for the Company. An overview of the Group's internal control and risk management systems are set out in UIL Limited's report and accounts.

Results and Dividends

The results for the year are set out in the attached accounts which are prepared on a going concern basis and as set out in note 13, the Directors believe that it is appropriate to adopt the going concern basis in preparing the accounts as the Company can continue to operate due to the contractual obligation of the parent company to ensure that UIL Finance is able to redeem the ZDP shares on each repayment date and the Directors are comfortable that the parent company has the financial resources to do so.

The Company has not declared a dividend in respect of the year ended 30 June 2021 (2020: nil).

Directors

The following Directors held office throughout the year, unless otherwise stated:

Peter Burrows (Chairman)

Stuart Bridges

Alison Hill

Christopher Samuel

David Shillson

Directors' Disclosures

At 30 June 2021, no Director had any interest in the Company's shares (2020: none). No Director acquired or disposed of any interest in the shares in the Company during the year or since the year end.

Election and re-election of Directors

The Company's Bye-laws require that a Director shall retire and be subject to re-election at the first AGM after appointment and at least every three years thereafter. However, the directors have voluntarily agreed to be subject to annual re-election. Consequently, at the forthcoming AGM Mr Burrows, Mr Bridges, Ms Hill, Mr Samuel and Mr Shillson will stand for re-election.

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