2024
REPORT AND ACCOUNTS
1
Report and Accounts for the year to 30 June 2024
TRENDS DRIVING UIL’S INVESTMENT OPPORTUNITIES
UIL's objective is to maximise shareholder returns
by identifying and investing in compelling long
term investments worldwide, where the underlying
value is not fully recognised.
REVENUE EARNINGS
PER ORDINARY SHARE
10.15p
(2023: 6.68p)
DIVIDENDS PER
ORDINARY SHARE
8.00p
(2023: 8.00p)
NET ASSET VALUE
("NAV") TOTAL RETURN
PER ORDINARY SHARE
*
-15.3%
(2023: -20.6%)
SHARE PRICE
TOTAL RETURN PER
ORDINARY SHARE
*
-24.8%
(2023: -18.5%)
*
See Alternative Performance Measures on pages 104 to 106
IN THE YEAR TO 30 JUNE 2024
Disruptive
technologies and
business models
Focused on
infrastructure
and utilities in
emerging markets,
where structural
growth drivers
are accelerated
by global
infrastructure
megatrends
Technology
changes impacting
commodity
demands
Changes in
markets and
regulation opening
up business
opportunities
2
UIL Limited
CONTENTS
FINANCIAL CALENDAR
Year End
30 June
Annual General Meeting (“AGM”)
14 November 2024
Half Year
31 December
Dividends Payable
September, December, March
and June
PERFORMANCE
3 Group Performance Summary
4 Chairman’s Statement
8 Performance Since Inception (14 August 2003)
STRATEGIC REPORT AND INVESTMENTS
10 Investment Managers’ Report
14 Top Ten Companies as at 30 June 2024
15 Geographical Investment Exposure
16 Macro Trends Affecting Our Portfolio
18 Our Investment Approach
20 ESG Spotlight
21 Ten Largest Holdings
27 Capital Structure
29 ZDP Shares
31 Strategic Report
41 Investment Managers and Team
GOVERNANCE
44 Directors
45 Directors’ Report
50 Corporate Governance Statement
55 Directors’ Remuneration Report
58 Audit & Risk Committee Report
61 Statement of Directors’ Responsibilities
AUDIT
62 Independent Auditor’s Report
FINANCIAL STATEMENTS
66 Accounts
72 Notes to the Accounts
ADDITIONAL INFORMATION
101 Notice of Annual General Meeting
103 Company Information
104 Alternative Performance Measures
107 Historical Performance
The business of UIL Limited (“UIL” or
the “Company”) consists of investing
the pooled funds of its shareholders
in accordance with its investment
objective and policy, generating
a return for shareholders and
spreading the investment risk. UIL
has borrowings and gearing is also
provided by zero dividend preference
(“ZDP”) shares, issued by its wholly
owned subsidiary UIL Finance Limited
(“UIL Finance”). The joint portfolio
managers of UIL are ICM Investment
Management Limited (“ICMIM”) and
ICM Limited (“ICM”), together referred
to as the “Investment Managers”.
3
Report and Accounts for the year to 30 June 2024
GROUP PERFORMANCE SUMMARY
30 June
2024
30 June
2023
% change
2024/23
NAV total return per ordinary share
1
(for the year) (%) (15.3) (20.6) n/a
Share price total return per ordinary share
1
(for the year) (%) (24.8) (18.5) n/a
Annual compound NAV total return
1
(since inception
2
) (%) 6.5 7.8 n/a
NAV per ordinary share (pence) 164.04 199.87 (17.9)
Ordinary share price (pence) 103.50 145.00 (28.6)
Discount
1
(%) 36.9 27.5 n/a
Returns and dividends (pence)
Revenue return per ordinary share 10.15 6.68 51.9
Capital return per ordinary share (39.99) (59.70) 33.0
Total return per ordinary share (29.84) (53.02) 43.7
Dividends per ordinary share 8.00
3
8.00 0.0
FTSE All-Share total return Index 9,729 8,611 13.0
Equity holders' funds (£m)
Gross assets
1
240.2 304.9 (21.2)
Loans 2.9 42.7 (93.2)
ZDP shares 99.8 94.6 5.5
Equity holders' funds 137.5 167.6 (18.0)
Revenue account (£m)
Income 12.2 10.2 19.6
Costs (management and other expenses) 1.5 1.7 (11.8)
Finance costs 2.2 2.9 (24.1)
Net income 8.5 5.6 51.8
Financial ratios of the Group (%)
Ongoing charges figure
1
2.8 2.8 n/a
Gearing
1
73.6 83.5 n/a
1 See Alternative Performance Measures on pages 104 to 106
2 All performance data relating to periods prior to 20 June 2007 are in respect of Utilico Investment Trust plc, UIL's predecessor
3 The third and fourth quarterly dividends of 2.00p each have not been included as a liability in the accounts
4
UIL Limited
It has been another challenging
year for UIL with its focus
on smaller, value stocks.
Investment performance has
been disappointing with UIL’s
NAV total return down 15.3%
for the year to 30 June 2024.
UIL’s annual compound NAV
total return since inception in
2003 is 6.5% per annum.
Over the twelve months to
30 June 2024 inflation has
reduced significantly in most countries and markets
have moved higher as investors have gained
confidence in the economic outlook and the reduction
in interest rates for most markets. However, the
Australian market fell 4.8% over the year which, given
UIL’s 47.6% weighting to Australia and New Zealand,
has been a headwind.
A small positive is the reduction in UIL’s net debt to
£101.2m from £139.9m as at 30 June 2023, which has
seen UIL’s gearing decline. As at 30 June 2024 UIL’s
gearing stood at 73.6% (30 June 2023: 83.5%).
Since inception in August 2003, UIL has distributed
£99.7m in dividends, invested £36.9m in ordinary share
buybacks and made net gains of £184.0m for a total
return of 276.3% (adjusted for the exercise of warrants
and convertibles).
The Board is disappointed to see the ordinary shares
discount to NAV widen to 36.9% at the end of the year
(30 June 2023: 27.5%). This is partially explained by the
focus of applying cash resources to the repayment of
the outstanding bank loans and planning for the 2024
ZDP shares redemption. Consequently, no buybacks
were undertaken in the year ended 30 June 2024.
Since the year ended 30 June 2024, the Company has
bought back a modest amount of ZDP shares and
ordinary shares.
UIL’s 2024, 2026 and 2028 ZDP shares are trading at
significantly higher gross redemption yields compared
to those as at 30 June 2023, being 12.4%, 10.9% and
10.7% respectively. As at 30 June 2024, UIL’s average
blended rate of funding costs had decreased from 5.7%
to 5.2%, mainly as a result of the lower bank borrowings.
Total revenue income for the year to 30 June 2024
was £12.2m, an increase of 19.6% from £10.2m in the
prior year, a good outcome given the reduced level
of investments. Revenue finance costs decreased
significantly in the year to 30 June 2024 to £2.2m, down
24.1% from the prior year at £2.9m. This resulted in
revenue return earnings per share (“EPS”) of 10.15p,
representing a increase of 51.9% from 30 June 2023 of
6.68p.
The Board declared unchanged third and fourth
quarterly dividends of 2.00p per ordinary share which
maintains the total for the year at 8.00p, and a yield
on the closing ordinary share price of 7.7%. It is UIL's
current intention to maintain the annual dividend at
8.00p, payable quarterly, in the absence of unforeseen
circumstances.
CHAIRMAN’S STATEMENT
STUART BRIDGES
Chairman
COMMODITIES MOVEMENTS
from 30 June 2023 to 30 June 2024
Nickel GoldCopperOil
80
90
Jun 24
Apr 24
Feb 24
Dec 23
Oct 23
Aug 23
Jun 23
140
Source: Bloomberg
Rebased to 100 as at 30 June 2023
70
130
110
120
100
Aluminium
5
Report and Accounts for the year to 30 June 2024
The revenue reserves carried forward increased to
£15.2m as at 30 June 2024 from £11.7m as at 30 June
2023, representing revenue reserves per share of
18.15p (30 June 2023: 14.00p).
The capital return loss for the year ended 30 June 2024
was £33.5m.
GROUP DEBT REDUCTION
There have been significant realisations in UIL's
platform companies Somers Limited (“Somers“) and
Zeta Resources Limited (“Zeta”) helping UIL to repay
its Bank of Nova Scotia debt facility in full. In addition,
Somers paid dividends to its shareholders, of which
UIL received £9.5m, while Zeta offered to buy back
shares on the market from all its shareholders and UIL
received £4.7m from its tendered shares.
Within UIL’s portfolio there were realisations of
£52.4m, of which sales of Utilico Emerging Markets
Trust plc (“UEM”) (£19.8m), Permanent Investment
Limited (holder of 16.7% of Littlepay Mobility Limited
(“Littlepay”)) (£4.7m), Somers (£4.3m) and West
Hamilton Holdings Limited’s (“West Hamilton”) capital
distribution of £8.4m were the largest.
ZDP REDEMPTION
The redemption of the 2024 ZDP shares will take place
on 31 October 2024.
GLOBAL EVENTS
Several themes continue to dominate global events:
heightened geopolitical tensions, elections, China’s
emerging dominance, the outlook for inflation and
interest rates, climate change, technology and Artificial
Intelligence ("AI"). Most of these are well understood,
but thinking evolves and opportunities emerge.
The emergence of a strong China focused on moving
up the value chain is being achieved by encouraging
innovation and technology, and seeking resilience
for their economy and equality for their citizens.
The Chinese government has actively supported
businesses which achieve its aims resulting in China
dominating a number of world class research and
industrial manufacturing processes from solar to
electric vehicles (“EV”). China has shifted from being
the world’s supplier of high volume lower technology
products (shoes to tennis rackets) to lower volume
higher technology products (solar, wind and EV’s)
investing to meet not only its own but the world’s
demands.
The challenge for most economies is the inability to
respond at scale. That has led to rising protectionism
such as Canada’s imposition of 100% tariffs on EVs
and Chile’s imposition of steel tariffs. China wants to
build its middle class wealth while many of the world’s
countries want to protect their middle class.
We fully expect the ongoing friction between the USA
and China to continue to deepen and it is now difficult
to see how this reverses direction. Given the USA
CURRENCY MOVEMENTS vs STERLING
from 30 June 2023 to 30 June 2024
Euro
Australian Dollar
US Dollar
90
Jun 24
Apr 24Feb 24Dec 23Oct 23Aug 23Jun 23
Source: BloombergRebased to 100 as at 30 June 2023
105
100
95
6
UIL Limited
CHAIRMAN’S STATEMENT (continued)
and China are the two largest economies globally this
must pose significant risks at some point in the future,
especially for technology businesses on each side of
the Pacific Ocean.
The wars in Ukraine and Gaza have both gone on
longer than expected and today there continues to be
no clear way forward. Over time a solution will emerge,
but the risk of a wrong decision leading to escalation
remains high.
Inflation has moved markedly lower for most
economies over the year in the face of high interest
rates and central banks are now starting to cut rates.
This will no doubt be beneficial to markets as risk
assets are priced higher.
Despite the high interest rate environment labour
markets have remained remarkably strong. We believe
that a number of factors are driving this such as
nearshoring, green investments and the emerging
digital economy which enable companies such as
Airbnb and others to utilise underused economic
assets to generate returns.
An ever increasing factor for investors is climate
change. It has clearly had devastating impacts on a
number of communities from wildfires in Canada to
floods in Germany. We are seeing whole ecosystems
being impacted by prolonged droughts and record
temperatures. As investors we need to prepare for
these outcomes to continue across our portfolios.
There is a very perceptible shift to embrace AI by
most businesses and as with most technological
developments, those without legacy businesses
benefit the most, but eventually all businesses will
need to adapt or risk failure. This has been our
experience in the fintech sector. UIL has a number of
investments with significant exposure to AI, blockchain
and quantum computing.
BOARD
As noted in the half yearly financial report, Peter
Burrows stepped down as Chairman of the Board on
31 March 2024 and I was appointed Chairman. Peter
Burrows has been an excellent Chairman since his
appointment in 2015 and his chairmanship during this
challenging time was exemplary. We thank him warmly
for his contribution.
Peter Durhager joined the Board at the end of March
and has agreed to chair the Audit & Risk Committee.
Peter brings significant operational experience to UIL
which will be invaluable to the Board.
FUTURE OF THE COMPANY
While we have a number of potentially exciting
investments within the portfolio, such as the
merged Waverton Investment Management Group
("Waverton") and London & Capital Group (“London
& Capital”), and Diraq Pty Ltd ("Diraq"), our quantum
computing investment, we recognise that recent poor
investment performance has resulted in UIL not having
INDICES MOVEMENTS
from 30 June 2023 to 30 June 2024
Source: Bloomberg
Australian Securities Exchange ("ASX")
S&P 500
FTSE All-Share
80
90
100
110
Jun 24
Apr 24Feb 24Dec 23Oct 23Aug 23
Jun 23
120
Rebased to 100 as at 30 June 2023
MSCI All Countries World Index
130
7
Report and Accounts for the year to 30 June 2024
the scale to build up a sufficiently diversified portfolio.
In addition, the liquidity of the ordinary shares on
the market, given the significant major shareholder
ownership, is problematic while our general investment
mandate does not provide the focused offering which
the investor base in the UK now prefers.
Given this, the logical conclusion is to work towards
taking the Company private and cancelling its stock
exchange listings following the redemption of the 2028
ZDP shares.
The Investment Managers and majority shareholder
both recognise this and have combined to put forward
proposals, which the Board supports, to manage
UIL over the next four years with a view to realising
sufficient investments to enable the redemption of the
ZDP shares and provide an opportunity for the UIL
minority shareholders to exit.
To facilitate this, it is the intention to simplify the
platform structures. This is likely to result in merging
the Somers and Zeta investment vehicles into UIL,
thereby consolidating the investments of Somers
and Zeta with those of UIL. Such proposals will
increase UIL’s asset base, although the external
minority interests in UIL will decrease as a percentage
of the shares in issue, owing to the UIL majority
shareholder’s current shareholding in Somers and
Zeta. It is proposed that these consolidations will be
implemented at NAV to NAV.
As referred to above, it is UIL’s current intention, in the
absence of unforeseen circumstances, to maintain the
annual dividend at 8.00p, payable quarterly.
Furthermore, it is UIL’s aim to provide each year,
through a cost effective mechanism, the opportunity
for minority shareholders to exit a significant
proportion of their shares at a discount to NAV of
approximately 20%. Starting in the second half of 2025,
this will provide liquidity for minority shareholders
before the 2028 privatisation and, in addition, UIL
plans to continue to buy back ordinary shares and
ZDP shares in the market. It is hoped that these steps
will lead to improved liquidity in UIL's shares, provide
improved choice for ordinary shareholders to exit,
whilst maintaining an income yield to 2028, for those
shareholders who prefer regular income. It also
provides improved asset cover for the outstanding
ZDP shareholders.
As a first step, UIL and General Provincial Life
Pension Fund Limited who together hold 95.0% of
the outstanding share capital in Zeta, have formally
notified Zeta on 12 July 2024 that they are considering
acquiring the shares in Zeta that they do not currently
own, by compulsory acquisition in accordance with
s103 of the Companies Act 1981 of Bermuda. It is
contemplated that such offer would be at or near
Zeta’s NAV at the time the offer is made.
OUTLOOK
The outlook for worldwide economies increasingly
rests with global leadership, both political and central
bankers. The polarising of views to the left and right
of the political spectrum is driving fractures through
nations as leaders seek to navigate through escalating
challenges. The rising pressure to meet social
expectations and the impact of climate change, natural
disasters and conflict will be difficult to navigate.
Clearly the US election is a pivotal moment as are the
decisions by the US central bank. We remain focused
on reducing risk and helping investee companies
through these challenges to emerge stronger.
Stuart Bridges
Chairman
8 October 2024
8
UIL Limited
ANNUAL COMPOUND
NAV TOTAL RETURN
*
6.5%
NAV TOTAL RETURN
PER ORDINARY SHARE
*
276.3%
ANNUAL COMPOUND
SHARE PRICE TOTAL
RETURN
*
6.2%
SHARE PRICE TOTAL
RETURN PER ORDINARY
SHARE
*
251.4%
REVENUE EARNINGS
PER ORDINARY SHARE
141.29p
DIVIDENDS PER
ORDINARY SHARE
114.83p
DIVIDENDS PAID
OUT
£99.7m
REVENUE RESERVES
PER ORDINARY SHARE
CARRIED FORWARD
*
18.15p
PERFORMANCE SINCE INCEPTION (14 AUGUST 2003)
HISTORIC TOTAL RETURN PERFORMANCE (pence)
since inception to 30 June 2024
Source: ICM and Bloomberg
Ordinary share price
total return
1
FTSE All-Share
total return Index
NAV total return per
ordinary share
1
Rebased to 100 as at 14 August 2003
1 Adjusted for the exercise of warrants and convertibles
201020092008200620052004 20072003 201820172016201420132012 20152011 20242019 2020
50
150
250
350
450
550
650
750
850
MSCI All Countries World
total return Index (GBP adjusted)
950
2021
2022
2023
*
See Alternative Performance Measures on pages 104 to 106
9
Report and Accounts for the year to 30 June 2024
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Source: ICM
No dividends were paid in 2008 and 2009, and 2010 refers to a cash
distribution
Dividend per share – specialDividend per share – ordinary
2018
2016
2014
2012
2010
2006
2004
2020
2024
2022
0
100
200
300
400
500
600
Source: ICM
Ordinary shares
ZDP shares Bank loans
Jun 17
Jun 15
Jun 13
Jun 11
Jun 07
Jun 05
Jun 19
Jun 09
Aug 03
Jun 24
Jun 21
DIVIDENDS PER ORDINARY SHARE (pence)
from 30 June 2004 to 30 June 2024
ALLOCATION OF GROSS ASSETS (£m)
from 14 August 2003 to 30 June 2024
0
200
400
600
800
1,000
Source: ICM and Bloomberg
2 Inception of Utilico Investment Trust PLC
3 Adjusted for the exercise of warrants and convertibles
NAV total return per ordinary share
3
FTSE All-Share total return Index
NAV total
return of
276.3%
Jun
20
Jun
19
Jun
18
Jun
17
Jun
16
Jun
15
Jun
14
Jun
13
Jun
12
Jun
11
Jun
10
Jun
09
Jun
08
Jun
07
Jun
06
Jun
05
Jun
04
Aug
03
Jun
24
Jun
21
MSCI All Countries World total return Index (GBP adjusted)
Jun
22
Jun
23
CUMULATIVE TOTAL RETURN COMPARATIVE PERFORMANCE (pence)
from 14 August 2003 to 30 June 2024 (Rebased to 100 as at 14 August 2003
2
)
10
UIL Limited
The need to repay UIL’s
bank debt of £37.5m during
the year to 30 June 2024
created continued pressure
on substantial portfolio
realisations in difficult markets.
Consequently, this has been a
difficult year for the Company to
navigate.
UIL’s loss for the year to 30 June
2024 was £25.0m resulting
in NAV per share of 164.04p,
a decline of 17.9%. This has dragged UIL’s annual
compound NAV total return since inception in 2003
down to 6.5% per annum, a disappointing outcome.
Total net debt reduced by £38.8m to £101.2m and
gearing reduced by 9.9% to 73.6%, which was positive.
PORTFOLIO
There was significant activity over the year including
realisations within the top ten holdings, which enabled
them to fund capital distributions, dividends and
buybacks. The investment portfolio reduced from
£308.3m to £238.8m, with the reduction comprising
£28.2m from losses on investments and £41.3m being
net proceeds of portfolio sales.
It should be noted that UEM and Zeta’s share price
discounts to NAV widened and now represent a £13.3m
reduction to the underlying valuations.
Somers’ valuation was largely unchanged in the year
to 30 June 2024, being up by 0.4%. However, Somers
distributed material dividends to its shareholders and
adding these back, Somers’ total return was 8.9% for the
year. Within Somers’ portfolio a significant transaction
completed on 28 June 2024, when Waverton merged
its business with London & Capital creating a £19.3bn
wealth and asset management business. This is a
transformative transaction for Waverton and we remain
excited about its prospects. The combined business
has the scale, capability and momentum to significantly
outperform the market. As part of the merger, Somers
reduced its investment in Waverton by two thirds and
now owns an 18.0% interest in the enlarged wealth
and asset management group. The cash released
from the transaction allowed Somers to repay its debt
and distribute dividends to its shareholders and UIL
received £9.2m. In addition, UIL sold 302,000 of its
Somers shares at fair value to a fellow shareholder,
Union Mutual Pension Fund Limited ("UMPF"). During
the year, Waverton gained in value for a total return of
9.9%.
Within the Somers portfolio, Resimac Group Limited
("Resimac") largely stood still with its share price
declining by 2.3% which was more than offset by
dividend distributions of 8.5%. It should be noted
that UIL holds a direct investment in Resimac, which
continues to be in UIL’s top ten investments, in addition
to Somers' investment in Resimac.
Zeta’s NAV per share decreased by 22.8% over the year
and its share price declined by 18.0%. This is mainly due
to the collapse in nickel prices, the consequent valuation
decline of Panoramic Resources Limited which entered
administration, and the share price decline of 61.9% at
Alliance Nickel Limited. Together these two investments
contributed losses of AUD 48.9m in the year to Zeta.
Hudbay Minerals gained £2.5m in the year and Zeta
took the opportunity to profitably exit its holding
realising £23.3m. Zeta used the funds to buy back
shares from shareholders and UIL successfully tendered
8.2% of its holding realising £4.7m for UIL.
UEM’s NAV total return over the twelve months was up
7.6%. However, UEM’s share price discount widened
over the year from 14.0% to 18.6% reducing the total
returns to UIL to 2.5%. UIL reduced its shareholding in
UEM selling nearly half of its holding, realising £19.8m
given the need for UIL to repay its bank loan.
The valuation of Allectus Quantum Holdings Limited
("Allectus Quantum") was flat over the year. Its sole
investment is Diraq, a next generation quantum
computing company. Diraq continues to meet its
milestones including raising external funding in these
challenging markets. Globally there is significant interest
in quantum computing from the technology industry,
investors and governments. Diraq is seen as an industry
leader and its valuation remains modest relative to its
market position, competitors and the amount of patents
and intellectual property owned.
Allectus Capital Limited’s ("Allectus Capital") valuation
reduced by 40.9% due to write downs which mirrored
sharp declines in peer group multiple valuations.
West Hamilton, a listed Bermuda property developer,
completed the sale of its major asset in Bermuda. It
used the proceeds to reduce its debt and to fund a
CHARLES JILLINGS
Investment Manager
INVESTMENT MANAGERS’ REPORT
11
Report and Accounts for the year to 30 June 2024
significant distribution to its shareholders of which UIL’s
share was £8.4m.
The Market Limited continues to underwhelm and its
share price decline of 48.3% during the year to 30 June
2024 was reflective. However, it has a strong Australian
digital footprint and good brand positioning in Gumtree,
Carsguide and Autotrader, with over AUD 2.0bn in
annual transactions on its platforms, but unlocking of
this ecommerce platform value will be challenging.
UIL sold Permanent Investments Limited, which held
16.7% in Littlepay, to Somers. It should be noted that UIL
on a look through basis holds 19.8% of Littlepay as at
30 June 2024.
Carebook Technologies Inc ("Carebook") and WT
Financial Group Limited ("WT Financial") entered into the
top ten holdings due to the sale of Littlepay and reduced
valuation of Arria NLG Limited.
As we have highlighted before, within the Somers’
portfolio is an investment in AK Jensen Group Limited
(“AKJ”) which comprises a platform for both traditional
hedge funds and hedge funds trading digital assets. In
addition, AKJ has issued tokens, a crypto currency, which
have been sold to investors and hedge fund managers
in the crypto platform. Valuing the token is difficult as
few metrics allow comparability and the industry has
not settled on a methodology we can readily adopt.
While investors and hedge fund managers on the AKJ
platform are buying AKJ tokens at EUR 0.37 the volume
held by Somers would likely see a discount driven by
lower liquidity opportunities and reduced fee discount
benefits held by these hedge fund managers. Somers
holds 75.0m AKJ tokens directly and holds further AKJ
Tokens indirectly through its investments in AKJ group
companies who in turn hold AKJ Tokens in treasury.
Somers values these tokens at EUR 0.185 per token.
Each EUR 0.05 represents £5.7m swing in valuation for
Somers and £2.3m for UIL. Further details on AKJ can be
found on their website and note 29 to the accounts.
FOREIGN EXCHANGE
As at 30 June 2024 UIL held no forward FX derivative
positions. Last year we noted that UIL was expected
to be less vulnerable to volatility in the FX markets for
the coming year. This has turned out to be correct. In
the year ended 30 June 2024, forward contract FX and
currency losses amounted to £0.1m (30 June 2023:
£3.6m).
COMMODITIES
Commodities were stronger during the year to 30 June
2024, with one exception, nickel was down 16.2%. Oil,
copper and gold were all up by 15.4%, 17.4% and 21.2%
respectively.
PORTFOLIO ACTIVITY
During the year to 30 June 2024, UIL invested £11.1m and
realised £52.4m. The realisations include UEM, £19.8m,
West Hamilton capital distribution of £8.4m and Zeta’s
buy back of £4.7m.
PLATFORM INVESTMENTS
UIL currently has three platform investments, Somers,
Zeta and Allectus Capital in its top ten holdings. These
investments account for 66.8% of the total portfolio as
at 30 June 2024 (30 June 2023: 58.6%). During the year
to 30 June 2024, net withdrawals from these platforms,
including dividends, amounted to £16.7m (30 June 2023:
£36.0m). We have excluded UEM as a platform given the
reduction in shareholding following the sale of 49.1% of
UIL’s holding in UEM.
DIRECT INVESTMENTS
UIL has seven direct investments in its top ten holdings,
UEM, Resimac, Allectus Quantum, West Hamilton, The
Market Limited, Carebook and WT Financial.
GEOGRAPHIC AND SECTOR REVIEW
The geographical and sector split as set out on page 12
reflects movements as a result of the above, the halving
of the investment in UEM and 20.2% loss of value at
Zeta, and the realisation of two thirds of Waverton sees
Australia and New Zealand rise. Financial Services was
up, and Infrastructure nearly halved due to the partial
divestment of UEM.
LEVEL 3 INVESTMENTS
UIL’s investment in level 3 companies amounted to
61.3% (30 June 2023: 56.0%) of the total portfolio. The
total value reduced from £172.7m as at 30 June 2023 to
£146.3m as at 30 June 2024, mainly as a result of West
Hamilton's capital distribution, Somers’ dividend and
a further mark down in the Allectus Capital portfolio.
The level 3 investments are revalued twice a year, but
where there is a material event that impacts a level 3
investment, it is revalued at the time, thereby keeping
the valuations current.
12
UIL Limited
INVESTMENT MANAGERS’ REPORT (continued)
AUSTRALIA & NEW ZEALAND
REMAINS UIL’S LARGEST
EXPOSURE AT
47.6%
(2023: 40.1%)
UK REMAINS UIL’S SECOND
LARGEST COUNTRY EXPOSURE AT
10.9%
(2023: 19.2%)
AFRICA IS NOW UIL’S THIRD
LARGEST EXPOSURE AT
10.4%
(2023: 6.9%)
EUROPE IS NOW UIL’S FOURTH
LARGEST EXPOSURE AT
8.7%
(2023: 5.4%)
BERMUDA IS NOW UIL’S FIFTH
LARGEST COUNTRY EXPOSURE AT
8.2%
(2023: 9.5%)
ASIA IS NOW UIL’S SIXTH
LARGEST EXPOSURE AT
6.4%
(2023: 6.0%)
SECTOR SPLIT OF INVESTMENTS
Financial Services
47.9%
Technology
22.9%
Resources
12.4%
Infrastructure
Investments
7.7%
Gold Mining
5.1%
Other
4.0%
Source: ICM
IN THE YEAR TO 30 JUNE 2024
See page 15 for the full geographic exposure
INVESTED
*
£11.1m
(2023: £120.6m)
REALISED
*
£52.4m
(2023: £188.4m)
TOTAL REVENUE INCOME
£12.2m
(2023: £10.2m)
LEVEL 1 & 2
INVESTMENTS
*
£92.5m
(2023: £135.7m)
LEVEL 3
INVESTMENTS
*
£146.3m
(2023: £172.7m)
LEVEL 3
% OF TOTAL PORTFOLIO
61.3%
(2023: 56.0%)
IN THE YEAR TO 30 JUNE 2024
(2023: 40.6%) (2023: 23.6%) (2023: 14.4%)
(2023: 11.6%) (2023: 3.4%) (2023: 6.4%)
*
See note 10 to the accounts
13
Report and Accounts for the year to 30 June 2024
GEARING
Notwithstanding the significant pull back in portfolio
valuations during the year, this was more than offset
by the reduction in bank debt. As a result, gearing
decreased to 73.6% as at 30 June 2024 from 83.5% as
at 30 June 2023 and this remains well inside UIL’s target
gearing of under 100.0%. At an absolute level UIL’s net
debt decreased over the year from £139.9m to £101.2m
as at 30 June 2024. UIL’s debt has almost halved over
the last two years.
The blended costs of borrowing as at 30 June 2024
decreased from 5.7% in the previous year to 5.2% as a
result of the lower loan debt.
ZDP SHARES
On a consolidated basis the ZDP shares increased
by 5.5% from £94.6m to £99.8m, reflecting the
compounding capital return. The 2024 ZDP shares
are due for redemption on 31 October 2024 and UIL
is taking steps to fund the redemption. The liability of
£40.8m as at 30 June 2024 has been moved to current
liabilities in the Group balance sheet.
UIL continues to hold 2.3m 2026 ZDP shares and 0.6m
2028 ZDP shares as at 30 June 2024.
BANK AND OTHER DEBT
Bank and other loans decreased to £2.9m as at
30 June 2024 (30 June 2023: £42.7m). The Bank of Nova
Scotia's £37.5m committed senior secured multi-
currency revolving facility was repaid in the year to 30
June 2024 and today UIL has no bank facility.
As at 30 June 2024, UMPF had loaned £2.9m to UIL. This
loan was repaid in August 2024.
REVENUE RETURNS
Revenue income for the year to 30 June 2024 increased
to £12.2m from £10.2m, an increase of 19.6%.
Management and administration fees and other
expenses were down 11.8% at £1.5m (30 June 2023:
£1.7m). Finance costs were significantly lower, down by
24.1% at £2.2m for the year to 30 June 2024 from £2.9m
in the prior year, mainly as a result of the repayment of
loans.
Revenue profit increased by 51.8% to £8.5m (30 June
2023: £5.6m) and EPS increased by 51.9% to 10.15p
(30 June 2023: 6.68p).
CAPITAL RETURNS
Capital total income reported a loss of £28.3m (30 June
2023: loss of £44.0m) which was driven mainly by the
£28.2m loss on investments, representing losses of 9.1%
on the opening portfolio.
Finance costs reduced by 14.8% to £5.2m (30 June 2023:
£6.1m) largely reflecting the lower number of ZDP shares
in issue following the redemption of the 2022 ZDP
shares in October 2022.
The resultant capital return loss for the year to 30 June
2024 was £33.5m (30 June 2023: loss of £50.0m) and
EPS loss was 39.99p per ordinary share (30 June 2023:
loss of 59.70p).
EXPENSE RATIO
The ongoing charges figure, including and excluding
performance fees, was unchanged at 2.8% for the
year ended 30 June 2024 (30 June 2023: 2.8%). No
performance fee was earned at the UIL level or the
platform companies.
All expenses are borne by the ordinary shareholders.
Charles Jillings
ICM Investment Management Limited and ICM
Limited
8 October 2024
14
UIL Limited
TOP TEN COMPANIES AS AT 30 JUNE 2024
Note: % relates to % of total investments
1
44.2%
Somers Limited
Financial Services
A financial services
investment platform,
which primarily
invests in the wealth
management and
asset financing
sectors.
105,481
Fair value £’000s
5
6.1%
Allectus Quantum
Holdings Limited
Technology
An investment
holding company
for Australia based
quantum computing
startup Diraq.
14,681
Fair value £’000s
3
8.6%
Utilico Emerging
Markets Trust plc
Investment Fund
A UK listed fund
uniquely focused on
global infrastructure
megatrends in
emerging markets.
20,494
Fair value £’000s
2
17.5%
Zeta Resources
Limited
Resources
A resources-focused
investment platform,
which invests in a
range of resource
entities and base
metals exploration
and production
companies.
41,796
Fair value £’000s
4
6.9%*
Resimac Group
Limited
Financial Services
A lender for
residential mortgages
and asset finance in
Australia and New
Zealand.
16,426
Fair value £’000s
6
5.1%
Allectus Capital
Limited
Technology
An investment
platform with
a growth-stage
portfolio of
technology
companies.
12,157
Fair value £’000s
10
1.0%
WT Financial Group
Limited
Financial Services
A financial services
company that
provides wealth
management,
retirement planning
and personal risk
insurance advice
services.
2,525
Fair value £’000s
8
2.5%
The Market Limited
Financial Services
A multi-platform
and financial news
business operating in
Australia and Canada,
and the owner of a
number of online
classified listings
businesses.
5,992
Fair value £’000s
7
2.8%
West Hamilton
Holdings Limited
Investment Fund
A Bermuda
property holding
and management
company.
6,718
Fair value £’000s
9
1.7%
Carebook
Technologies Inc
Technology
A digital health
company providing
employee health and
wellness solutions to
employers globally
as well as pharmacy
management
solutions to
pharmacies.
4,001
Fair value £’000s
*25.1% on a look-through basis
USA
2.6%
(2.5%)
15
Report and Accounts for the year to 30 June 2024
GEOGRAPHICAL INVESTMENT EXPOSURE
(% of total investments on a look-through basis)
Source: ICM
Latin
America
2.8%
(4.7%)
Africa
10.4%
(6.9%)
Bermuda
8.2%
(9.5%)
UK &
Channel Islands
10.9%
(19.2%)
Canada
2.4%
(5.7%)
Asia
6.4%
(6.0%)
Australia &
New Zealand
47.6%
(40.1%)
Europe
(excluding UK)
8.7%
(5.4%)
Figures in brackets as at 30 June 2023
USA
2.6%
(2.5%)
16
UIL Limited
MACRO TRENDS AFFECTING OUR PORTFOLIO
GEOPOLITICS AND GLOBAL TRADE
• Global geopolitical tensions and rising populism/nationalism is leading to rising
protectionism by countries resulting in export restrictions (tariffs) and companies
reassessing their supply chains.
• The increasingly multi-polar world and reshaping of the competitive trade environment
are presenting new trading dynamics - there has been an increasing in “shoring”
(onshoring, nearshoring and friendshoring) and the need to diversify supply chains.
• Increasing importance of emerging market economies in the share of world trade is
changing the economics of how global trade has traditionally been executed.
RESOURCES AND ENERGY GROWTH AND TRANSITION
• Growing demand for energy resources as global economic growth continues, requiring
ongoing investment in energy infrastructure.
• Geopolitical tensions continue to highlight the need for countries to ensure energy
independence and cutting reliance on imported energy sources.
• Increasing focus on renewable energy resources, as lower or net zero emission targets
to combat climate change require decarbonisation of the energy matrix.
• Drive to reach net zero targets increasing long term demand for several commodities
including nickel, copper, lithium and graphite.
• Heightened multi-polar world driving demand for safe haven assets such as gold.
GROWTH OF EMERGING MARKETS
• Emerging markets economies continue to be driven by underlying structural growth
drivers of:
– Positive demographics – typically a young, growing and increasingly better educated
working class age population
– Increasing urbanisation – driving need for investment into infrastructure to support
urban growth
– Rise of the middle class – growing discretionary income increasing demand for goods
and services leading to better quality of life
– Strong gross domestic product growth – importance of emerging markets’ share of
global trade continues to increase.
• Structural growth drivers pushing demand for supporting investment in infrastructure
assets such a transportation, utilities and telecommunications.
17
Report and Accounts for the year to 30 June 2024
DIGITALISATION
• Developments in AI algorithms and processing capacity driving new opportunities to
optimise resources, drive efficiencies, reduce risk and accelerate innovation across a
broad range of industries.
• 5G mobile and full-fibre broadband rollout presents opportunities for businesses and
benefits to consumers driven by enhanced connected applications in sectors including
e-commerce, e-government, online education, telemedicine, automotive, logistics,
communications and media.
• Increased use of internet connected sensors (internet of things), cloud storage and
AI data processing driving further automation in manufacturing, healthcare, security,
smart cities and transportation.
FINTECH
• Innovative solutions in financial technology disintermediating the traditional financial
sector business models with lower cost, lower risk, more secure, more convenient
solutions for payments, lending, leasing, tax collection, social security payments,
insurance, savings, pensions and investments.
• Changing demographics and improved financial sophistication of individuals are
altering demand for financial services products, providing a fertile ground for innovative
products and services e.g. Buy Now Pay Later and e-commerce.
• Growing emphasis on individual responsibility for personal savings and investments
as government and company schemes come under increasing demographic driven
pressures.
18
UIL Limited
OUR INVESTMENT APPROACH
ICM is a long term investor and typically operates
focused portfolios with narrow investment remits.
ICM has several dedicated research teams who have
deep knowledge and understanding in their specific
sectors, which improves the ability to source and make
compelling investments. ICM has approximately
USD 1.6bn of assets directly under management and is
responsible indirectly for a further USD 9.4bn of assets
in subsidiary investments.
ICM looks to exploit market and pricing opportunities
and concentrates on absolute performance. The
investments are not market index driven and the
investment portfolio comprises a series of bottom-up
decisions. ICM typically does not participate in either
an IPO or an auction unless there is compelling value.
UIL seeks to leverage ICM’s investment abilities to
both identify and make investments across a range of
industries. New investments usually offer an attractive
valuation with strong risk/return expectations at the
time of investment.
When reviewing investment opportunities, as part of
the investment process ICM will look to understand the
material ESG factors.
In-depth analysis of the key
issues that face potential and
current holdings, as well as a
deep understanding of the
industry in which they operate.
Incorporate the output of the
‘Understanding’ component
into the full company analysis to
ensure a clear and complete
picture of the investment
opportunity is obtained.
Engage with investee
companies on the key issues
on a regular basis, both virtually
and on location, where possible,
to discuss and identify any
gaps in their ESG policies to
further develop and improve
their ESG disclosure and
implementation.
Understanding Engagement
Integration
ICM incorporates ESG factors into the
investment process in
three key ways:
19
Report and Accounts for the year to 30 June 2024
Values
Team
Investment Practices
Financial
Platforms
Communities
ICM works to create value by harnessing our experience and
expertise to generate and grow strong relationships with our
stakeholders
We are focused on creating sustainable long term value for our shareholders and supporting the broader
community through our:
We are proud of our diverse and inclusive environment for our teams to work in, which reflects the
diversity of our communities.
Our deep and extensive research and understanding of the companies, sectors and markets we
invest in moderates our risk and creates value for our investors. Our status as a signatory to the
United Nations-supported Principles of Responsible Investment emphasises our commitment to
integrating ESG factors into our investment decision making process.
Strong balance sheet and disciplined capital allocation to drive sustainable growth and shareholder
value.
Technology, digital and analytics enable our investment platforms to deliver growth for our
shareholders.
ICM supports the ICM Foundation, which has identified sustainable, effective and focused
education where the biggest impact can be made on individuals and in communities. Over the past
decade ICM and its stakeholders have contributed over USD 17.6m to not-for-profit and community
organisations.
ICM’s origins date back to 1988 and our organisation has evolved with offices now spanning
the globe. We are focused on our values of:
• Independence and Integrity • Excellence
• Creativity and Innovation • Accountability
20
UIL Limited
ESG SPOTLIGHT
A leading alternative lender for
residential mortgages and asset
finance in Australia, with a broad
suite of competitive, award-
winning products that cater to
diverse customer types and needs.
ESG ANALYSIS:
In November 2023 Resimac released its updated ESG
framework, centering its environmental and social
approach on three of the 17 Sustainable Development
Goals (“SDGs”). In alignment with the strategic direction
set by the Resimac board and management, Resimac
now focuses on the following SDGs:
Climate Action
Resimac has teamed up with Plant Trees Australia,
an online platform that Carbon Positive Australia
runs, which helps fund community tree-planting
projects. Resimac has allowed its customers to select
a community tree planting project to support as part
of the loan settlement process. Under their previous
decade-long partnership with Carbon Conscience, they
have funded the planting of over 46,000 trees, resulting
in the removal of nearly 5.0m kilograms of carbon
dioxide over the trees' lifetime.
Good Health and Well-Being
Resimac supports a number of community initiatives
run by several charities. One of these charities is Food
Ladder, a not-for-profit and global pioneer in the use
of environmentally sustainable technologies aiming
to create food and economic security for remote
communities. Since Resimac began supporting Food
Ladder, it has funded three hydroponic greenhouses.
This has helped develop the local communities of
Brisbane, Sydney and Adelaide in which they have been
provided.
Quality Education
Through Resimac’s commitment to supporting
education, it has initiated a partnership with the GO
Foundation, which provides scholarships to Aboriginal
and Torres Strait Islander students from primary and
tertiary levels. This year, Resimac contributed USD
10,000 to the GO Foundation’s annual fundraiser,
The Big Lunch. All funds raised have been dedicated
to positively impacting the educational journeys of
scholars.
Crucially, further to a strong environmental and social
position, Resimac has a strong governance framework.
This framework is supported by appropriate policies
that are reviewed and tested annually. This ensures all
regulatory obligations are adhered to in line with, and
beyond, its Australian Financial Services and Australian
Credit Licence requirements.
ICM ESG CONCLUSION:
Resimac's updated ESG Framework, aligned with a
globally recognised framework, provides a clear and
targeted strategy. The framework is supported by a
number of appropriate policies, annual training and
key performance measures that assist Resimac with
supporting and furthering its ESG commitment.
The Board believes that it is in the shareholders’ interests to consider ESG factors when selecting and retaining investments
and has therefore asked the Investment Managers to take these into account when investing. Where companies in the
portfolio are assessed as having a relatively low ESG score or where an individual risk has been identified, ICM’s approach is
to engage, where possible, with the companies directly with the objective of seeing improvements over time. Details of how
ESG forms part of the integrated research analysis, decision-making and ongoing monitoring are set out on pages 38 and
39. Set out below is an example of the approach taken with one of UIL’s investments.
21
Report and Accounts for the year to 30 June 2024
TEN LARGEST HOLDINGS
THE VALUE OF THE TEN LARGEST
HOLDINGS REPRESENTS
96.4%
(2023: 94.2%) OF THE
GROUP’S TOTAL INVESTMENTS
THE VALUE OF FIXED INCOME
SECURITIES REPRESENTS
1.1%
(2023: 0.5%) OF THE GROUP’S
PORTFOLIO
THE TOTAL NUMBER
OF COMPANIES INCLUDED IN THE
PORTFOLIO IS
25
(2023: 29 COMPANIES)
22 23
UIL Limited Report and Accounts for the year to 30 June 2024
22
UIL Limited
TEN LARGEST HOLDINGS (continued)
Somers is a financial services investment holding company, whose
shares are listed on the Mezzanine Market of the Bermuda Stock
Exchange (“BSX”). Somers is managed by ICM.
As at 31 March 2024, Somers’ three largest investments, which made up
86.7% of its portfolio, were a 54.6% holding in Resimac, a leading non-bank
Australian financial institution, with AUD 14.0bn assets under management
(“AUM”), a 60.9% holding in Waverton, a UK wealth manager with over £15.4bn
funds under management and administration (“FUMA”), and a 39.8% holding
in ICM Mobility, a UK holding company focused on the mobility sector for
private and public transport.
Somers shareholders’ equity was £299.4m as at 31 March 2024 (31 March
2023: £281.7m) and Somers’ NAV per share of £12.26 was up 6.2% year on
year. Somers’ gearing ratio was 26.2% (31 March 2023: 30.5%). The NAV
increase followed valuation increases in the majority of Somers’ investments
during the first half of the year. Waverton continued to experience strong
growth in its FUMA and Resimac’s share price increased by 14.2% in the six
months to 31 March 2024. There were also valuation increases for the AKJ
Token which offset a reduction in the value of ICM Mobility. Somers paid a
dividend of USD 1.22 per share to shareholder in June 2024 reducing Somers’
fair value to £262.3m as at 30 June 2024.
In June 2024, Somers’ largest holding, Waverton, completed its merger with
London & Capital. Somers received cash on completion and an 18% economic
interest in the combined group's holding company. Somers used the proceeds
of this transaction to reduce its bank and other debt including the repayment
of its loan notes.
Zeta is a resource-focused investment company, which is listed on the
ASX. Zeta is managed by ICM.
In the year ended 30 June 2024, Zeta realised a gain on initial investment of
162% in Hudbay Minerals (through its initial investment in Copper Mountain
Mining), exiting its position at an average share price of CAD 7.06. Zeta deployed
AUD 21.2m in support of new and existing investments during the year and
completed its deleveraging effort, ending the year with net cash of AUD 18.7m
(USD 12.1m).
Over the year to 30 June 2024, gold, aluminium, copper, and oil were up
21.2%, 17.4%, 17.4% and 15.4% respectively, whilst nickel was down 16.2%. As
a leveraged commodity investment company, the value of Zeta’s net assets
typically rises more when commodity prices rise, while falling more when
commodity prices fall as the impact on mining companies is magnified. Zeta has
a relatively concentrated portfolio, having built up cornerstone shareholdings in
aluminium, gold, and nickel. Koumbia Bauxite Investments Limited, Zeta’s largest
holding, holds certain economic rights to an advancing bauxite development,
which made material progress toward reaching first production and is
positioned well to generate positive returns in the near term. However, nickel,
Zeta’s third largest exposure, faced significant headwinds, contributing to a fall in
Zeta’s NAV per share of 22.8% during the year to 30 June 2024. Zeta’s share price
closed the year at a discount of 20.5% (30 June 2023: 22.0%) to NAV per share.
Sector Financial
Services
Fair Value
£’000s 105,481
% of total
investments 44.2%
Sector Resources
Fair Value
£’000s 41,796
% of total
investments 17.5%
1
2
VALUATION
0.4%
SHARE PRICE
18.0%
22 23
UIL Limited Report and Accounts for the year to 30 June 2024
UEM is a closed-end investment trust, whose ordinary shares are listed
in the closed-ended investment funds category of the Official List of
the Financial Conduct Authority and are traded on the Main Market of
the London Stock Exchange. UEM is managed by ICMIM and ICM.
UEM predominately invests in infrastructure and utilities assets in emerging
markets which are benefitting from structural growth drivers accelerated
by global infrastructure megatrends. In the twelve months to 30 June 2024,
UEM’s NAV total return was up by 7.6%, underperforming the MSCI Emerging
Markets total return Index (GBP adjusted) which increased by 13.2% during
the same period due to the Index’s higher exposure to tech stocks.
Further, despite the strong operational performance of many UEM investee
companies who delivered strong revenue and EBITDA growth, alongside
margin expansion and resilient cashflow, this was not fully reflected in
the investee companies’ share price performances as the global macro
backdrop of “higher for longer” US interest rates put pressure on some
emerging markets. In particular this was witnessed in Brazil, where UEM had
23.6% of its assets as at 30 June 2024. Although in local currency terms, the
Brazilian Bovespa reported a positive return, the weakness of the Brazilian
Real, not helped by unnecessary local political noise and concerns over the
country’s fiscal accounts added additional pressure.
In the year to 30 June 2024, UEM’s share price decreased by 0.9%, and
disappointingly the discount to NAV remained stubbornly wide increasing
to 18.6% from 14.0% as at 30 June 2023. Dividends per share increased to
8.60p from 8.45p.
UIL’s shareholding in UEM decreased by 49.1% during the year under review.
Resimac is an ASX listed residential mortgage lender and multichannel
distribution business specialising in prime and specialist mortgage
lending.
Resimac is considered one of Australia’s and New Zealand’s premier
nonbank lenders. It operates in targeted market segments and asset classes
in Australia and New Zealand. Its primary activities are as a mortgage
manager and in originating, servicing and securitising mortgage assets. As
at 30 June 2024, Resimac reported total home loan AUM of AUD 12.9bn, a
decrease year on year of 1.9%. Net interest income for the year ended 30
June 2024 was AUD 159.6m, a 21.8% decrease from 2023 reflecting a higher
cost of funds and the intense competition in the mortgage market. Resimac
generated normalised net profit after tax for the year of AUD 43.1m. Total
loan settlements during the year was AUD 5.1bn of which the asset finance
division reported settlements of AUD 0.8bn. During the year, Resimac issued
AUD 3.8bn of Australian and New Zealand Prime and Specialist RMBS.
The stabilisation of the home loans portfolio in the second half of the year
and the significant growth of the asset finance business with settlements up
60%, suggests improved performance in the coming year.
Sector Investment
Fund
Fair Value
£’000s 20,494
% of total
investments 8.6%
Sector Financial
Services
Fair Value
£’000s 16,426
% of total
investments 6.9%
3
4
SHARE PRICE
0.9%
SHARE PRICE
2.3%
24 25
UIL Limited Report and Accounts for the year to 30 June 2024
TEN LARGEST HOLDINGS (continued)
Allectus Quantum is an unlisted investment holding company with an
investment in Sydney-based quantum computing start-up Diraq.
Diraq is building a quantum computing platform that leverages the advanced
manufacturing capabilities of the semiconductor industry. Diraq was spun
out of the University of New South Wales in May 2022 and is led by Professor
Andrew Dzurak who has over two decades of experience in the quantum
computing field, having invented Diraq’s approach to quantum computing
in 2004. Diraq has established foundational IP in quantum computing
hardware and is now focused on producing the technology at scale as it
works toward the long term goal of providing commercial applications of
quantum computing.
For the year to 30 June 2024, Diraq successfully completed a fundraising
round of USD 22.0m from leading deeptech investors. It also showed its
quantum computing device designs can be manufactured on standard
semiconductor processes and produce world record results. As an extension
of this, Diraq announced its partnership with GlobalFoundries, a leading
semiconductor foundry, which will manufacture Diraq’s designs over
the coming months. This is critical for Diraq, whose key advantage over
competitors is the manufacturability of its devices. Diraq has hired over 15
new employees and is focused on building its presence in the US over the
next year.
The valuation of Allectus Quantum has increased due to a rise in the fair
value of Diraq.
Allectus Capital is an unlisted investment company with a focused
portfolio of technology businesses and is managed by ICM.
Allectus Capital invests in early and growth-stage companies developing
potentially disruptive technologies. Its key verticals comprise fintech, AI,
digital health and deep tech. Allectus Capital maintains a selective approach
to high conviction opportunities in technology companies, which leverage its
global relationships and synergies with other portfolio companies in the ICM
group.
Allectus Capital made several new investments during the year to 30 June
2024, which included Atelier (Australian cloud manufacturing software
platform), Effi Technology (Australian AI mortgage platform) and Mist
Financial (Australian education payments platform). Allectus Capital also
re-invested in existing portfolio company LifeQ (US based wearables health
tech company). Three investments were also significantly impaired, reflecting
the challenging market for technology globally and difficulties faced by non
cashflow positive companies in this environment.
Throughout 2024, there was a continued slowdown in financing rounds
and increased pricing pressure. In response, Allectus Capital is focusing on
finding deep value companies in sectors where valuations are significantly
below previous years comparables.
Sector Technology
Fair Value
£’000s 14,681
% of total
investments 6.1%
Sector Technology
Fair Value
£’000s 12,157
% of total
investments 5.1%
5
6
VALUATION
0.1%
VALUATION
40.9%
24 25
UIL Limited Report and Accounts for the year to 30 June 2024
West Hamilton is a BSX listed investment and management company
with property assets in Bermuda.
West Hamilton sold its properties at 69 and 71 Pitts Bay Road in November
2023. The net proceeds from this sale were used to reduce West Hamilton’s
bank debt by USD 3.1m and a dividend of USD 6.75 per share was paid
to shareholders in November 2023. Following the sale, West Hamilton
now has one remaining property asset, The Belvedere Residences, a
mixed use building located at 71A Pitts Bay Road housing nine executive
condominiums, a penthouse office suite and a gymnasium. The Belvedere
Residences is fully occupied with all commercial space let, seven apartments
let on leases and two apartments sold.
For the year ended 30 September 2023, West Hamilton reported solid
results with revenue of USD 3.0m (September 2022: USD 3.0m) and net
operating income for the year of USD 1.2m (September 2022: USD 1.1m).
Total assets as at 30 September 2023 were USD 44.1m (September 2022:
USD 42.3m).
The Market Limited operates online listing marketplaces and
discussion forums for consumers in Australia and Canada. In
November 2023, The Market Herald changed its name to The Market
Limited and operates mainly in classified advertising and capital
markets.
Following its acquisition of The Gumtree Group in October 2022, The
Market Limited has struggled to grow the business materially, buffeted
both by a longer than expected, at higher cost IT migration as well as a
global reduction in advertising spend and decline of comparable online
marketplaces. The business recorded revenue of AUD 91m for FY24, with
a c.2m EBITDA loss for the period reflecting higher than expected IT costs,
as well as decreasing investment into the product during the period as the
business viewed the core IT systems migration was a gating item to any new
development.
Management are hopeful that with the major transitional work done,
that the platforms can turn the corner and return to growth on profit, in
particular by adding payments/checkout as well as expanding through
verticals such as cars, pets and real estate that exist on the platform
today. The business has signed several partnerships in these verticals
with 2025 being a pivotal year for the execution of new revenue initiatives.
The Gumtree Group, including the car related websites Carsguide and
Autotrader remain the best prospects for this growth.
Sector Investment
Fund
Fair Value
£’000s 6,718
% of total
investments 2.8%
Sector Financial
Services
Fair Value
£’000s 5,992
% of total
investments 2.5%
7
8
VALUATION
2.7%
SHARE PRICE
48.3%
26 27
UIL Limited Report and Accounts for the year to 30 June 2024
Carebook Technologies is a digital health company providing employee
health and wellness solutions to employers globally as well as
pharmacy management solutions to pharmacies.
For the three months to 31 March 2024 revenues increased as well as
adjusted EBITDA compared to a loss in the previous year, a significant
improvement as a result of revenue growth, driven by increases in the
pharmacy vertical and licence revenue from CoreHealth division. Annual
recurring revenue was CAD 11.8m as at 31 March 2024, an increase of 10.0%
year on year. This increase was primarily due to new enterprise customers
and organic growth with existing customers. Of the CAD 11.8m of ARR,
62.0% originated from clients outside of Canada.
Carebook is exploring five strategies to position its growth, these include
engaging in more prospecting and outbound sales activity targeting large
and medium sized employers; product partnering; offering standard
product suites to employers to accelerate their decisions and shorten the
current sales cycle; improve user experience; and leverage data use to
support sales and product development.
WT Financial is an Australian financial adviser network and its adviser
networks manage over AUD 23.0bn in assets and handle more than
AUD 430.0m in annual personal insurance premiums.
In its latest report for the year to 30 June 2024, the group's consolidated
EBITDA decreased by 3.1% to AUD 6.3m, compared to AUD 6.5m in the
previous corresponding period. The statutory income tax expense was AUD
935k, in the prior year it was AUD 735k, resulting in a consolidated profit
after tax of AUD 3.9m (prior year: AUD 4.1m). Operating cash flow rose by
89.7% to AUD 5.5m (prior year: AUD 2.9m), with a cash balance of AUD 8.0m
as at 30 June 2024.
In December 2023, WT Financial acquired 100% of Millennium3 Financial
Services Pty Ltd ("M3") from Insignia Financial Limited for AUD 2.0m in cash.
The M3 network, one of Australia’s oldest financial advice networks with
around 75 practices nationwide, added approximately AUD 5.0bn in funds
under advice and over AUD 150.0m in-force risk insurance premiums to the
group.
Sector Technology
Fair Value
£’000s 4,001
% of total
investments 1.7%
Sector Financial
Services
Fair Value
£’000s 2,525
% of total
investments 1.0%
9
10
SHARE PRICE
21.4%
SHARE PRICE
3.8%
TEN LARGEST HOLDINGS (continued)
27
Report and Accounts for the year to 30 June 2024
26 27
UIL Limited Report and Accounts for the year to 30 June 2024
ORDINARY SHARES
The number of ordinary shares in issue, and the voting
rights, as at 30 June 2024 was 83,842,918 shares. The
ordinary shares are entitled to all the revenue profits
of the Company available for distribution and resolved
to be distributed by the Directors by way of a dividend.
The Directors consider the payment of dividends on a
quarterly basis.
On a winding up, holders of ordinary shares will be
entitled, after payment of all debts and the satisfaction
of all liabilities of the Company, to the winding up
revenue profits of the Company and thereafter, after
paying to UIL Finance for its ZDP shareholders their
accrued capital entitlement, to all the remaining assets
of the Company.
ZDP SHARES
The ZDP shares are issued by UIL Finance, a wholly
owned subsidiary of UIL. The ZDP shares carry no
entitlement to income and the whole of any return will
take the form of capital.
2024 ZDP SHARES
30,000,000 2024 ZDP shares were in issue as at 30
June 2024. The 2024 ZDP shares rank for payment
in priority to the ordinary shares (save for any
undistributed revenue profit on winding up) and
the 2026 and 2028 ZDP shares but rank behind the
Company’s borrowings for capital repayment of
138.35p per 2024 ZDP share on 31 October 2024.
The capital repayment is equivalent to a redemption
yield of 4.75% per annum based on the initial capital
entitlement of 100.00p.
2026 ZDP SHARES
25,000,000 2026 ZDP shares were in issue as at 30
June 2024, of which 2,309,620 were held by UIL. The
2026 ZDP shares rank for payment in priority to the
ordinary shares (save for any undistributed revenue
profit on winding up) and the 2028 ZDP shares but rank
behind the Company’s borrowings, and the 2024 ZDP
shares for capital repayment of 151.50p per 2026 ZDP
share on 31 October 2026. The capital repayment is
equivalent to a redemption yield of 5.00% per annum
based on the initial capital entitlement of 100.00p.
2028 ZDP SHARES
25,000,000 2028 ZDP shares were in issue as at 30
June 2024, of which 583,735 were held by UIL. The
2028 ZDP shares rank for payment in priority to the
ordinary shares (save for any undistributed revenue
profit on winding up) but rank behind the Company’s
borrowings and the 2024 and 2026 ZDP shares for
capital repayment of 152.29p per 2028 ZDP share on
31 October 2028. The capital repayment is equivalent
to a redemption yield of 5.75% per annum based on
the initial capital entitlement of 100.00p.
BORROWINGS
As at 30 June 2024, UIL had borrowings of £2.9m, a
loan from UMPF, which was repaid in August 2024.
SENSITIVITY OF RETURNS AND RISK PROFILES
Ordinary shares rank behind the ZDP shares (save for
any undistributed revenue profit on a winding up) and
the Company’s borrowings such that they represent a
geared instrument. For every £100 of gross assets of
the Company as at 30 June 2024, the ordinary shares
could be said to be interested in £57.26 of those assets
after deducting the prior claims as above. This makes
the ordinary shares more sensitive to movements
in gross assets. Based on these amounts, a 1.0%
movement in gross assets would change the NAV
attributable to ordinary shares by 1.7%.
The interest cost of UIL’s borrowings, combined
with the annual accruals in respect of ZDP shares,
represents a blended rate of 5.2% as at 30 June 2024.
Based on their final entitlement of 138.35p per share,
the final entitlement of the 2024 ZDP shares was
covered 5.49 times by gross assets as at 30 June
2024. Should the gross assets fall by 81.8% over the
remaining life of the 2024 ZDP shares, then the 2024
CAPITAL STRUCTURE
UIL has a geared balance sheet structure, with the
ordinary shares leveraged by the ZDP shares and
borrowings.
28 29
UIL Limited Report and Accounts for the year to 30 June 2024
ZDP shares would not receive their final entitlement in
full. Should gross assets fall by 98.8%, the 2024 ZDP
shares would receive no payment at the end of their
life.
Based on their final entitlement of 151.50p per share,
the final entitlement of the 2026 ZDP shares was
covered 2.96 times by gross assets as at 30 June
2024. Should the gross assets fall by 66.2% over the
remaining life of the 2026 ZDP shares, then the 2026
ZDP shares would not receive their final entitlement
in full. Should gross assets fall by 81.8%, equivalent
to an annual fall of 51.8%, the 2026 ZDP shares would
receive no payment at the end of their life.
Based on their final entitlement of 152.29p per share,
the final entitlement of the 2028 ZDP shares was
covered 2.02 times by gross assets as at 30 June
2024. Should the gross assets fall by 50.6% over the
remaining life of the 2028 ZDP shares, then the 2028
ZDP shares would not receive their final entitlement in
full. Should gross assets fall by 66.2%, equivalent to an
annual fall of 22.1%, the 2028 ZDP shares would receive
no payment at the end of their life.
SPLIT OF GROSS ASSETS
as at 30 June 2024
CONSOLIDATED FUNDING COST STRUCTURE
as at 30 June 2024
Ordinary shares
Loans
2024 ZDP shares
2028 ZDP shares
2026 ZDP shares
1.2%
57.2%
£30.5m
£28.5m
£40.8m
12.7%
11.9%
17.0%
£2.9m
£137.5m
by value by percentage
Blended
cost of
prior
charges
to
ordinary
shares
Loans
4.75%
5.00%
2024
ZDP
shares
2026
ZDP
shares
2028
ZDP
shares
5.20%
8.30%
5.75%
CAPITAL STRUCTURE (continued)
29
Report and Accounts for the year to 30 June 2024
28 29
UIL Limited Report and Accounts for the year to 30 June 2024
ZDP SHARES
0
20
40
60
80
100
120
Jun 24Jun 23Jun 22Jun 21Jun 20Jun 19Jun 18Jun 17
0
200
400
600
800
1,000
NAV total return (pence)
3
Gearing (%)
(%)
(pence)
3 Rebased to 100 as at 14 August 2003 Source: ICM
GEARING/NAV TOTAL RETURN
from 30 June 2017 to 30 June 2024
ZDP SHARES
1
(pence)
30 June
2024
30 June
2023
% change
2024/23
2024 ZDP shares
Capital entitlement
2
per ZDP share 136.15 130.04 4.7
ZDP share price 133.00 123.50 7.7
2026 ZDP shares
Capital entitlement
2
per ZDP share 135.15 128.75 5.0
ZDP share price 119.00 114.50 3.9
2028 ZDP shares
Capital entitlement
2
per ZDP share 119.49 113.02 5.7
ZDP share price 98.00 96.50 1.6
1 Issued by UIL Finance, a wholly owned subsidiary of UIL
2 See pages 27 and 28
TOTAL ZDP SHARES
ISSUED SINCE INCEPTION
£379.5m
TOTAL ZDP SHARES
REDEEMED SINCE INCEPTION
£466.4m
30 31
UIL Limited Report and Accounts for the year to 30 June 2024
TOTAL BORROWINGS
Jun 2017
£’000s
Jun 2018
£’000s
Jun 2019
£’000s
Jun 2020
£’000s
Jun 2021
£’000s
Jun 2022
£’000s
Jun 2023
£’000s
Jun 2024
£’000s
2014 ZDP
2016 ZDP
2018 ZDP 72,622 50,858
2020 ZDP 48,704 51,940 55,387 59,087
2022 ZDP 52,452 55,873 59,499 63,407 48,052 51,166
2024 ZDP 29,408 31,582 33,250 34,996 36,833 38,765 40,778
2026 ZDP 11,275 13,474 24,791 25,299 27,589 29,005 30,513
2028 ZDP 23,726 25,225 26,819 28,505
Total 173,778 199,354 159,942 180,535 132,073 140,813 94,589 99,796
Bank and other debt
4
47,846 28,495 50,971 54,402 45,437 54,907 45,329 1,365
Total debt 221,624 227,849 210,913 234,937 177,510 195,720 139,918 101,161
Blended interest rate % 6.2 6.1 5.5 5.2 4.5 4.7 5.7 5.2
4 includes net bank overdrafts
Source: ICM
ZDP SHARES – TIMES COVERED BY UIL’S GROSS ASSETS
5
Jun 2017 Jun 2018 Jun 2019 Jun 2020 Jun 2021 Jun 2022 Jun 2023 Jun 2024
2014 ZDP
2016 ZDP
2018 ZDP 3.51 6.50
2020 ZDP 2.38 3.71 4.92 4.23
2022 ZDP 1.72 2.44 2.97 2.58 5.41 3.83
2024 ZDP 1.84 2.42 2.11 3.83 2.80 3.57 5.49
2026 ZDP 1.63 2.08 1.81 3.03 2.23 2.49 2.96
2028 ZDP 2.50 1.85 1.90 2.02
5 Gross assets divided by the aggregate redemption liabilities of the ZDP shares and any bank debt or other borrowings ranking in priority to the ZDP
shares.
Source: ICM
TOTAL ZDP, BANK AND
OTHER DEBT AS AT
30 JUNE 2024
£101.2m
GEARING AS AT
30 JUNE 2024
73.6%
*
TOTAL NET DEBT
DECREASE DURING THE
YEAR
£38.8m
AVERAGE COST OF
DEBT FUNDING
5.2%
*
See Alternative Performance Measures on pages 104 to 106
ZDP SHARES (continued)
31
Report and Accounts for the year to 30 June 2024
30 31
UIL Limited Report and Accounts for the year to 30 June 2024
STRATEGIC REPORT
PRINCIPAL ACTIVITY
UIL carries on business as an investment company and
its principal activity is portfolio investment.
INVESTMENT OBJECTIVE
UIL’s investment objective is to maximise shareholder
returns by identifying and investing in investments
worldwide where the underlying value is not fully
recognised.
STRATEGY AND BUSINESS MODEL
UIL invests in accordance with the objective set
out above. The Board is collectively responsible to
shareholders for the long-term success of the Company.
Since the Company has no employees, it outsources
its activities to third party service providers, including
the appointment of external investment managers to
deliver investment performance. The Board oversees
and monitors the activities of the service providers with
the Board setting investment policy and risk guidelines,
together with investment limits.
ICMIM, an English incorporated company authorised
and regulated by the Financial Conduct Authority (“FCA”)
as an alternative investment fund manager (“AIFM”)
pursuant to the AIFM Regulations, is the Company’s
AIFM and joint portfolio manager alongside ICM. The
investment team responsible for the management of
the portfolio is headed by Duncan Saville and Charles
Jillings.
ICMIM and ICM, operating under guidelines determined
by the Board, have direct responsibility for the decisions
relating to the day to day running of the Company
and are accountable to the Board for the investment,
financial and operating performance of the Company.
Other service providers include JP Morgan Chase Bank
N.A. – London Branch which provides administration
services, JPMorgan Chase Bank N.A. – Jersey which
provides custodial services, J.P. Morgan Europe Limited
(“JPMEL”) which acts as the Company’s Depositary under
the AIFM Regulations and Computershare Investor
Services which acts as registrar. ICM has also been
appointed Company Secretary.
INVESTMENT POLICY
UIL’s investment policy is to identify and invest in
opportunities where the underlying value is not
fully recognised. This perceived undervaluation may
arise from factors such as technological change,
market motivation, prospective financial engineering
opportunities, competition, underperforming
management or shareholder apathy.
UIL aims to maximise value for shareholders through
a relatively concentrated portfolio of investments
including separate closed-end investment companies
(“Platforms”) which have been or will be established to
focus on investments in dedicated market sectors.
UIL has the flexibility to invest in shares, bonds,
convertibles, and other types of securities, including
non-investment grade bonds and to invest in unlisted
securities. UIL may also invest in other investment
companies or vehicles, including any managed by the
Investment Managers, where such investment would be
complementary to UIL’s investment objective and policy.
UIL may also use derivative instruments such as
American Depositary Receipts, promissory notes,
foreign currency hedges, interest rate hedges, contracts
for difference, financial futures, call and put options
and warrants and similar instruments for investment
purposes and efficient portfolio management, including
protecting UIL’s portfolio and balance sheet from major
corrections and reducing, transferring, or eliminating
investment risks in its investments. These investments
will be long term in nature.
UIL has the flexibility to invest in markets worldwide
although investments in the utilities and infrastructure
sectors are principally made in the developed markets
of Australasia, Western Europe, and North America, as
UIL’s exposure to the emerging markets infrastructure
and utility sectors is primarily through its holding in
UEM. UIL has the flexibility to invest directly in these
sectors in emerging markets with the prior agreement
of UEM.
UIL believes it is appropriate to support investee
companies with their capital requirements whilst at
the same time maintaining an active and constructive
shareholder approach through encouraging a review
of the capital structure and business efficiencies. The
Investment Managers’ team maintains regular contact
with investee companies and UIL may often be among
the largest shareholders. There are no limits on the
proportion of an investee company that UIL may hold
and UIL may take legal or management control of a
company from time to time.
32 33
UIL Limited Report and Accounts for the year to 30 June 2024
There will be no material change to the investment
policy (including the investment limits and the borrowing
limits) without the prior approval of shareholders. Any
such change would also require the approval of the ZDP
shareholders.
INVESTMENT LIMITS
The Board has prescribed the following limits on
the investment policy, all of which are at the time of
investment unless otherwise stated.
There are no fixed limits on the allocation of investments
between sectors and markets, however the following
investment limits apply:
• investments in unlisted companies will, in
aggregate, not exceed 25% of gross assets at the
time that any new unlisted investment is made.
This restriction does not apply to loans to listed
Platforms;
• no single investment will exceed 30% of gross
assets at the time such investment is made, save
that this limit shall not prevent the exercise of
warrants, options or similar convertible instruments
acquired prior to the relevant investment reaching
the 30% limit. This restriction does not apply to
investments in any Platform; and
• no single investment in a Platform will exceed 50%
of gross assets at the time such investment is made,
save that this limit shall not prevent the exercise of
warrants, options or similar convertible instruments
acquired prior to the relevant investment
reaching the 50% limit and provided that no single
investment held by such Platform will exceed 30%.
of the gross assets at the time such investment is
made on a look-through basis.
Where UIL directly or indirectly owns 100% of the issued
ordinary share capital of any company that holds an
underlying investment portfolio, the investment limits
set out above will be applied to, and take into account,
the underlying investee companies on a look-through
basis and will not be applied to, or take into account, any
such intermediate holding company.
None of the above restrictions will require the realisation
of any of UIL’s assets where any restriction is breached
as a result of an event outside of the control of the
Investment Managers which occurs after the investment
is made, but no further relevant assets may be acquired,
or loans made by UIL until the relevant restriction can
again be complied with.
BORROWING LIMITS
Under UIL’s Bye-laws, the Group is permitted to borrow
(excluding the gearing provided through the Group’s
capital structure) an aggregate amount equal to 100% of
its gross assets. Borrowings may be drawn down in any
currency appropriate for the portfolio.
However, the Board has set a current limit on gearing
(being total borrowings excluding ZDP shares measured
against gross assets) not exceeding 33.3% at the time
of draw down. Borrowings may be drawn down in
Sterling, US Dollars, or any currency for which there are
corresponding assets within the portfolio (at the time of
draw down, the value drawn must not exceed the value
of the relevant assets in the portfolio).
As at 30 June 2024 the Company’s borrowings
comprised a loan from UMPF of £2.85m which
was repaid in August 2024. UIL repaid all amounts
outstanding under its committed senior secured multi-
currency facility with the Bank of Nova Scotia at its
maturity in March 2024.
DIVIDEND POLICY
The Board’s objective is to maintain or increase the
total annual dividend. Dividends are expected to be
paid quarterly each year in December, March, June
and September. In determining dividend payments,
the Board will take account of factors such as income
forecasts, retained revenue reserves, the Company’s
dividend payment record and Bermuda law. The Board
also has the flexibility to pay dividends from capital
reserves.
RESULTS AND DIVIDENDS
Details of the Company’s performance are set out in
the Investment Managers’ Report. The results for the
year ended 30 June 2024 are set out in the attached
accounts. The dividends in respect of the year, which
total 8.00p, have been declared by way of four interim
dividends.
KEY PERFORMANCE INDICATORS
Delivery of shareholder value is achieved through the
increase in capital value of the Company’s shares and by
its income return. The Board reviews performance by
STRATEGIC REPORT (continued)
32 33
UIL Limited Report and Accounts for the year to 30 June 2024
reference to a number of Key Performance Indicators
(“KPIs”) that include the following:
• NAV total return relative to the FTSE All-Share Index
• Share price
• Share price discount to NAV
• Revenue earnings
• Dividends per share
• Ongoing charges figure
While some elements of performance against KPIs are
beyond management control, they provide measures
of the Group’s absolute and relative performance and
are therefore monitored by the Board on a regular
basis. These KPIs fall within the definition of Alternative
Performance Measures under guidance issued by
the European Securities and Markets Authority and
additional information explaining how these are
calculated is set out on pages 104 to 106.
30 June 2024 2023
NAV total return (%) (15.3) (20.6)
FTSE All-Share total return Index (%) 13.0 7.9
Share price (pence) 103.50 145.00
Discount to NAV (%) 36.9 27.5
Percentage of issued shares bought
back during the year (based on opening
share capital) (%) 0.0 0.0
Revenue earnings per share (pence) 10.15 6.68
Dividends per share (pence) 8.00 8.00
Ongoing charges figure – excluding
performance fees (%) 2.8 2.8
The ten year record on page 107 shows historic data for
the Company.
Discount to NAV: The Board monitors the premium/
discount at which the Company’s shares trade in relation
to the assets. During the year the Company’s shares
traded at a discount relative to NAV in a range of 25.4%
to 44.0% and an average discount of 36.7%. The Board
and the Investment Managers closely monitor both
movements in the Company’s share price and significant
dealings in the shares. On 26 July 2019, UIL announced
that the Board intends to focus on reducing the discount
of the ordinary shares, targeting a discount to NAV of
approximately 20% over the medium term. In order to
avoid substantial overhangs or shortages of shares in
the market the Board asks shareholders to approve
resolutions which allow for the buyback of shares and
their issuance which can assist in the management
of the discount. However, in light of UIL’s focus on the
repaying of its bank facility during the year, no ordinary
shares were bought back during the year ended 30 June
2024.
Earnings and dividends per share: As referred to
in “Dividend Policy” above, the Board’s objective is to
maintain or increase the total annual dividend. The
Board and the Investment Managers attach great
importance to maintaining dividends per share since
dividends form a key component of the total return to
shareholders.
The Board declared four quarterly dividends of 2.00p
per share in respect of the year ended 30 June 2024. The
fourth quarterly dividend will be paid on 8 November
2024 to shareholders on the register as at 27 September
2024. The total dividend for the year was 8.00p per
share (2023: 8.00p per share).
Ongoing charges: These are calculated in accordance
with the industry measure of costs as a percentage
of NAV. The expenses of the Company are reviewed
at every Board meeting, with the aim of managing
costs incurred and their impact on performance. The
ongoing charges figure appears high when compared
to other investment companies as the expenses are
expressed as a percentage of average net assets (after
the deduction of the ZDP shares) and comprises all
operational, recurring costs that are payable by the
Company or incurred within underlying investee funds.
This ratio is sensitive to the size of the Company as well
as the level of costs.
OVERVIEW OF THE INVESTMENT VALUATION PROCESS
In preparing UIL’s half-yearly and annual financial
accounts, the most important accounting judgements
and estimates relate to the carrying value of the unlisted
investments which are stated at fair value. As at 30 June
2024, 61.3% of UIL’s investment portfolio consisted of
level 3 investments that were valued using inputs that
were not based on observable market data. Given the
importance of this area to the integrity of the financial
reporting, the Board and the Investment Managers
carefully review the valuation policies and processes and
the individual valuation methodologies at each reporting
date. However, the valuation of unlisted securities
34 35
UIL Limited Report and Accounts for the year to 30 June 2024
is inherently subjective, as it is made on the basis of
assumptions which may not prove to be accurate. As
detailed in note 29 to the accounts, small changes to
inputs may result in material changes to the carrying
value of the investments.
VALUATION PROCESS
UIL’s valuation policy is the responsibility of the Board,
with additional oversight and annual review from the
Audit & Risk Committee. The policy is reviewed at least
annually.
The valuation of the unlisted investments is the
responsibility of the Board, with valuation support and
analysis provided by the Investment Managers’ valuation
team. The investment portfolio is valued at fair value
and this is achieved by valuing each investment using
an appropriate valuation technique and applying a
consistent valuation approach for all investments.
The concept of fair value is key to the valuation process
and is defined as “the price that would be received to
sell an asset in an orderly transaction between market
participants at the measurement date” (International
Private Equity and Venture Capital (“IPEV”) guidelines,
December 2022).
Maximum use is made of market-based information and
the valuation methodologies used are those generally
used by market participants. Valuations are compliant
with IFRS fair value guidelines and guidelines issued by
the IPEV valuation board, which set out recommended
practice for fair valuing of unlisted investments
within the IFRS framework. The valuation of unlisted
investments requires the exercise of judgment, and
every effort is made to ensure that this judgment is
applied objectively and is not used to overstate or
understate the valuation result.
The Board reviews the unlisted valuations at each
meeting and in conjunction with UIL’s external financial
reporting process. The Board receives a detailed
report from the Investment Managers’ valuation
team recommending a proposed valuation for each
of UIL’s investments. The report includes details of
all material valuations, explanations for movements
and confirmation of the valuation process adopted.
Representatives of the Investment Managers are in
attendance at these meetings to answer any questions
the Board may have on the valuation process and the
choice of valuation techniques and inputs. The Board
reviews and challenges the assumptions behind the
unlisted asset valuations.
VALUATION METHODOLOGIES
The valuation of unlisted investments is normally
determined by using one of the following valuation
methodologies and, depending on the investment and
relevance of the approach, any or all of these valuation
methods could be used.
Earnings Multiples
This valuation methodology is used where the
investment is profitable and where a set of comparable
listed companies with similar characteristics to its
holding can be determined. As these investments are
not traded on an active market, the valuations are then
adjusted by a liquidity discount with the discount varying
depending on the nature of the underlying investment
entity and its sector and whether restrictions exist
on UIL’s ability to sell the asset in an orderly fashion.
In certain instances, UIL may use a revenue multiple
approach if this is deemed more appropriate.
It is UIL’s policy to use reported earnings adjusted for
non-recurring items, which are typically sourced from
the investee companies’ management accounts or
audited financial reports. In certain cases, current or
projected maintainable earnings provide a more reliable
indicator of the company’s performance and in these
instances an estimate of maintainable earnings is used
in the valuation calculation.
Multiples are derived from comparable listed companies
in the same business sector. Adjustments are made for
relative performance versus the comparables and other
company specific factors including size, product offering
and growth rates.
Discounted Cash Flow
This methodology may be used for valuing investments
with long term stable cash flows and uses maintainable
earnings discounted at appropriate rates to reflect the
value of the business. Generally, the latest historical
accounts are used unless reliable forecast results for the
current year are available. Earnings are adjusted where
appropriate for exceptional or non-recurring items.
Net Assets
This valuation technique derives the value of an
investment by reference to the value of its net assets.
STRATEGIC REPORT (continued)
34 35
UIL Limited Report and Accounts for the year to 30 June 2024
This is used for investments whose value derives mainly
from the underlying fair value of their assets rather
than their earnings, such as unlisted fund investments,
property holding companies and other investment
businesses. In addition, this valuation approach may
also be used for investments that are not making an
adequate return on assets and for which a greater value
can be realised by liquidating the business and selling its
assets.
For unlisted investment companies and limited
partnerships, the fair value estimate is based on a
summation of the estimated fair value of the underlying
investments attributable to the investor. This fund NAV
approach may be used where there is evidence that the
valuation is derived using fair value principles and the
most recent available fund NAV may be adjusted to take
account of changes or events to UIL’s reporting date.
Recent Investments
For an initial or recent transaction, UIL may value its
investment using the recent transaction price for a
limited period following the transaction, where the
transaction price continues to be representative of fair
value.
Imminent Investment Realisation
Where realisation of an investment or a flotation of an
investment is imminent and the pricing of the relevant
transaction has been substantially agreed, a discount
to the expected realisation proceeds or flotation value
valuation technique is used. Judgement is applied as
to the likely eventual exit proceeds and certainty of
completion. This technique is only utilised where a sale
or flotation process is materially complete, and the
remaining risks are estimated to be small.
Note 29 to the accounts sets out more details on UIL’s
unlisted investments and the valuation methodologies
adopted.
PRINCIPAL RISKS AND RISK MITIGATION
During the year ended 30 June 2024, ICMIM was the
Company’s AIFM and had sole responsibility for risk
management subject to the overall policies, supervision,
review and control of the Board.
As required by the Association of Investment Companies
(“AIC”) Code of Corporate Governance, the Board has
undertaken a robust assessment of the principal risks
facing the Company. It seeks to mitigate these risks
through regular review by the Audit & Risk Committee
of the Company’s risk register which identifies the
risks facing the Company and the likelihood and
potential impact of each risk, together with the controls
established for mitigation.
During the year the Audit & Risk Committee also
discussed and monitored a number of emerging risks
that could potentially impact the Company, the principal
ones being geopolitical risk and climate change risk. The
Audit & Risk Committee has determined that they are
not currently sufficiently material to be categorised as
separate key risks and are considered within investment
risk and market risk below.
The principal risks and uncertainties currently faced by
the Company and the controls and actions to mitigate
those risks, are described below. There have been no
significant changes to the principal risks during the year.
KEY RISK FACTORS
INVESTMENT
RISK:
The risk that the
investment strategy
does not achieve
long-term positive
total returns for
the Company’s
shareholders.
Insufficient
consideration of ESG
factors could lead to
poor performance
and/or a reduction
in demand for the
Company’s shares.
The Board monitors the performance of the Company and has established
guidelines to ensure that the approved investment policy is pursued by the
Investment Managers. The Board regularly reviews strategy in relation to a range of
issues including the balance between quoted and unquoted stocks, the allocation
of assets between geographic regions and sectors and gearing.
The investment process employed by the Investment Managers combines
assessment of economic and market conditions in the relevant countries with stock
selection. Fundamental analysis forms the basis of the Company’s stock selection
process, with an emphasis on an investment's balance sheet, cash flows and
dividends, as well as market conditions. In addition, ESG factors are also considered
when selecting and retaining investments and political risks associated with
investing in specific countries are also assessed. Overall, the investment process
aims to achieve absolute returns through an active fund management approach
and the Board monitors the implementation and results of the investment process
with the Investment Managers.
36 37
UIL Limited Report and Accounts for the year to 30 June 2024
MARKET RISK: Adverse market
movements in the
prices of equity
and fixed interest
securities, interest
rates and foreign
currency exchange
rates and adverse
liquidity could lead to
a fall in NAV.
The Company’s portfolio is exposed to equity market risk, interest rate risk, foreign
currency risk and liquidity risk. Adverse market conditions may result from factors
such as economic conditions, political change, geopolitical confrontations, climate
change, natural disasters and health epidemics. At each Board meeting the Board
reviews the composition of the portfolio, asset allocation, stock selection, unquoted
investments and levels of gearing and has set investment restrictions and
guidelines which are monitored and reported on by the Investment Managers.
The Company’s results are reported in Sterling, although the majority of its assets
are priced in foreign currencies and therefore any rise or fall in Sterling will lead,
respectively, to a fall or rise in the Company’s reported NAV. Such factors are
out of the control of the Board and the Investment Managers and may give rise
to distortions in the reported returns to shareholders. It can be difficult and
expensive to hedge some currencies.
KEY STAFF RISK: Loss by the
Investment Managers
of key staff could
affect investment
returns.
The quality of the investment management team is a crucial factor in delivering
good performance. There are training and development programs in place for
employees and the remuneration packages have been developed in order to
retain key staff. Any material changes to the management team are considered by
the Board at its next meeting; the Board discusses succession planning with the
Investment Managers at regular intervals.
DISCOUNT RISK: The Company’s
shares may trade at
a discount to their
NAV and a widening
discount may
undermine investor
confidence in the
Company.
The Board monitors the price of the Company’s shares in relation to their NAV and
is focused on reducing the discount at which they trade. The Board may agree to
buy back shares if there is a significant overhang of stock in the market; it targets a
discount to NAV of approximately 20% over the medium term.
OPERATIONAL
RISK:
Failure by any service
provider to carry
out its obligations
to the Company in
accordance with
the terms of its
appointment could
have a materially
detrimental impact
on the operation
of the Company
and could affect
the ability of
the Company to
successfully pursue
its investment policy.
The Company’s main service providers are listed on page 103. The Audit & Risk
Committee monitors the performance and controls (including business continuity
procedures) of the key service providers at regular intervals.
Most of UIL’s investments are held in custody for the Company by JPMorgan
Chase Bank N.A., Jersey. JPMEL, the Company’s depositary services provider, also
monitors the movement of cash and assets across the Company’s accounts. The
Audit & Risk Committee reviews the JP Morgan SOC1 reports, which are reported
on by Independent Service Auditors, in relation to its administration, custodial and
information technology services.
The Board reviews the overall performance of the Investment Managers and all
the other service providers on a regular basis. The risk of cyber-crime is high, as
it is with most organisations, but the Board regularly seeks assurances from the
Investment Managers and other key service providers on the preventative steps
that they are taking to reduce this risk.
GEARING RISK: Whilst the use of
borrowings should
enhance total return
where the return
on the Company’s
underlying securities
is rising and exceeds
the cost of borrowing,
it will have the
opposite effect where
the underlying return
is falling.
The ordinary shares rank behind borrowings and ZDP shares, making them a
geared instrument.
The gearing level is high due to the capital structure of the balance sheet. As at
30 June 2024, gearing on net assets, including borrowings and ZDP shares, was
73.6% (30 June 2023: 83.5%). The Board reviews the level of gearing at each Board
meeting.
STRATEGIC REPORT (continued)
36 37
UIL Limited Report and Accounts for the year to 30 June 2024
REGULATORY
RISK:
Failure to comply
with applicable
legal and regulatory
requirements could
lead to suspension of
the Company’s Stock
Exchange listings,
financial penalties, a
qualified audit report
or the Company
being subject to tax
on capital gains.
The Investment Managers and the Company’s professional advisers monitor
developments in relevant laws and regulations and provide regular reports to the
Board in respect of the Company’s compliance.
VIABILITY STATEMENT
The Board makes an assessment of the longer-term
prospects of the Company beyond the timeframe
envisaged under the going concern basis of accounting,
having regard to the Company’s current position and
the principal risks it faces. The Company is a long-term
investment vehicle and the Board believes that it is
appropriate to assess the Company’s viability over a
long-term horizon. For the purposes of assessing the
Company’s prospects in accordance with provision
31 of the UK Corporate Governance Code, the Board
considers that assessing the Company’s prospects
over a period of five years is appropriate given the
nature of the Company and its investment objective
and appropriately reflects the long-term strategy of the
Company.
In its assessment of the viability of the Company, the
Board has considered the Company's prospects and
outlook, each of the Company’s principal risks and
uncertainties detailed above, as well as the impact of
a significant fall in world equity and foreign exchange
markets on the value of the Company’s investment
portfolio and the Company’s ability to repay the
£120.3m ultimate liability in respect of the 2024,
2026 and 2028 ZDP shares and its borrowings. The
Board is also satisfied that it operates an effective risk
management process and has concluded a robust
assessment of the principal risks facing the Company.
The Board has also considered the Company’s income
and expenditure projections and the fact that the
Company’s operating expenses comprise a very small
percentage of net assets while a material proportion of
the Company’s investments comprise listed securities
which could likely be sold to meet funding requirements,
if necessary. The Board continues to consider the key
risks set out in this Strategic Report, the controls and
actions to mitigate these risks and the prospects for the
Company’s portfolio holdings and has concluded that
they are unlikely to affect the going concern status or
viability of the Company.
As part of this assessment the Board considered a
number of stress tests, including short term reverse
stress testing, and scenarios which considered the
impact of severe stock market and currency volatility
on shareholders’ funds over a five-year period. Initially,
the Company’s projections were adjusted to reflect a
material reduction in the value of its investments in
line with that experienced during the emergence of the
Covid-19 pandemic in the first quarter of 2020. The first
stress test considered a fall in the market of 40% in the
first year with recovery of 10% per annum thereafter. A
second test considered a fall in the markets of 20% and
adverse sterling movement, the Company’s reporting
currency, of 10% in the first year with a further fall in
markets of 20% in the second year and no movement
thereafter. The results demonstrated the impact on the
Company’s NAV, its expenses, and its ability to meet its
liabilities over that period. As a result of this analysis,
the Board has 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
next five years.
PROMOTING THE SUCCESS OF THE COMPANY
Although the Company is domiciled in Bermuda , the
Board has considered the guidance set out in the AIC
Code of Corporate Governance in relation to Section
172 of the UK Companies Act 2006. This requires the
Directors to have a duty to promote the success of the
Company for the benefit of its members as a whole
and includes having regard (amongst other matters) to
fostering relationships with the Company’s stakeholders
and maintaining a reputation for high standards of
business conduct.
38 39
UIL Limited Report and Accounts for the year to 30 June 2024
38
UIL Limited
As an externally managed investment company, UIL
has no employees, customers, operations or premises.
Therefore, the Company’s key stakeholders (other than its
shareholders) are considered to be its service providers,
including lenders. The need to promote business
relationships with the service providers and maintain
a reputation for high standards of business conduct is
central to the Directors’ decision making. The Directors
believe that fostering constructive and collaborative
relationships with the Company’s service providers will
assist in their promotion of the success of the Company
for the benefit of all shareholders and their performance
is monitored by the Board and its committees. The
principal service provider is the Investment Managers,
who are responsible for managing the Company’s assets
in order to achieve its stated investment objective, and
the Board maintains a good working relationship with
them. Whilst strong long term investment performance
is essential, the Board recognises that to provide an
investment vehicle that is sustainable over the long term,
both it and the Investment Managers must have regard
to ethical and environmental issues that impact society.
Accordingly, ESG considerations are an important part
of the Investment Managers’ investment process as
explained more fully below.
The Board seeks to engage with the Investment Managers
and its other service providers in a collaborative and
collegiate manner, whilst also ensuring that appropriate
and regular challenge is brought, and evaluation
conducted. The aim of this approach is to enhance
service levels and strengthen relationships with a view
to ensuring the interests of the Company’s shareholders
are best served by keeping cost levels proportionate and
competitive, and by maintaining the highest standards of
business conduct.
The Directors aim to act fairly as between the Company’s
shareholders and the approach to shareholder relations
is summarised in the Corporate Governance Statement
on pages 50 to 54. The Chairman is available to meet
with shareholders as appropriate and the Investment
Managers meet regularly with shareholders and their
respective representatives, reporting back on views to
the Board. Shareholders may also communicate with
the Company at any time by writing to the Board at the
Company’s registered office or contacting the Company’s
broker. These communication opportunities help inform
the Board when considering how best to promote the
success of the Company for the benefit of all shareholders
over the long term.
In addition to ensuring that the Company’s stated
investment objective was being pursued, the Directors
confirm that they have considered promoting the success
of the Company when making decisions, including in
relation to:
• the six month extension of the Company’s senior
secured multicurrency revolving facility with Bank of
Nova Scotia, to March 2024;
• the realisation of investments in advance of the
maturity date of the Company’s senior secured
multicurrency revolving facility in March 2024;
• the recommendation that shareholders vote in favour
of the Company’s dividend policy at the forthcoming
AGM; and
• the recommendation that shareholders vote in
favour of the renewal of the buyback and allotment
authorities as set out in the notice of AGM.
RESPONSIBLE INVESTMENT POLICY
The Board believes that it is in the shareholders’ interests
to consider ESG factors when selecting and retaining
investments, and has asked the Investment Managers to
take these into account when investing. The concept of
responsible investing has always been a core component
of the investment process and the Investment Managers
employ a disciplined investment process that seeks to
both uncover opportunities and evaluate potential risks,
while striving for the best possible return outcomes. When
reviewing any investment opportunity, the Investment
Managers look to understand the relevant ESG issues
in conjunction with the financial, macro and political
drivers as part of their investment process, populating an
internally built ESG framework due to lack of appropriate
coverage from external providers. Relevant and material
ESG opportunities and risks can meaningfully affect
investment performance, therefore the consideration of
ESG issues forms part of the integrated research analysis,
decision-making and ongoing monitoring.
The Investment Managers believe that “G” is the
core foundation on which all else is built, as strong
governance within a company ensures that minority
shareholder interests are aligned with other shareholders,
management and stakeholders. The Investment
Managers’ “G” assessment therefore includes questions
STRATEGIC REPORT (continued)
38 39
UIL Limited Report and Accounts for the year to 30 June 2024
covering shareholders’ rights, transparency and
related parties, as well as audit and accounting, board
composition and effectiveness, executive oversight and
compensation. Each area is assessed and weighted, and
the Investment Managers then apply an aggregated
weighting towards “G” in line with the strong empirical
evidence linking robust corporate governance and
performance. The questions and expectations that
the Investment Managers have of companies stays
consistent. This is regardless of the size of company,
sector or geographical location.
The “E” and “S” are also focal points for the Investment
Managers, as assessing key environmental and social risks
are essential to a long-term sustainable business model.
The Investment Managers identify the most material “E”
and “S” risks that are believed to affect each sector. Once
identified, many investees are then assessed against each
risk. The results from this analysis feed into an “E” and
“S” score for each company reflecting, for each material
risk, whether suitable/sustainable strategies are in
place. Where this is data is not disclosed, the Investment
Managers will engage with the investee to ensure that the
correct data is captured. To manage individual ESG risks
the Investment Managers will capture or ask the investee
if not disclosed, how the company is managing the risk.
ESG considerations provide a way to identify and review
the long-term drivers of an investment that are not
found within the financial accounts, thereby enabling
the Investment Managers to fully question a company’s
investment potential from a few perspectives. An example
of the ESG approach taken with one of UIL's investments
is set out on page 20.
Where possible, the Investment Managers aim to visit
companies to access an in-person opportunity to ask
management teams what they perceive to be the key
operational, social, and environmental issues, as well
as a chance to see assets operating first-hand. ESG
disclosures are not always easy to understand given they
may not be openly reported or consistently disclosed.
The Investment Managers believe that engaging with
companies directly is the best first step. Where necessary,
the Investment Managers will question and challenge an
investee company’s management team directly to ensure
a full understanding of any challenges and opportunities.
Given the Investment Managers are long term investors,
engagement with management teams is and will remain
paramount to the investment approach. On behalf of UIL
as shareholder, the Investment Managers work actively
with investee companies to incorporate stronger ESG
principles and vote in a considered manner (including
against resolutions) to drive positive change. Voting
proposals are reviewed carefully with final execution
taking into consideration the analysis and engagement
completed. As referred to previously, the Investment
Managers believe that governance factors are
fundamental to an investment.
ICM is a signatory to the United Nations-supported
Principles of Responsible Investment, which is an
international network of investors working together to
implement its six aspirational principles. The Investment
Managers believe that good stewardship is essential and
these principles align with their philosophy to protect and
increase the value of UIL's investments.
MODERN SLAVERY ACT
Due to the nature of the Company’s business, being
a company that does not offer goods and services to
customers, the Board considers that it is not within the
scope of the Modern Slavery Act 2015 because it has no
turnover. The Company is therefore not required to make
a slavery and human trafficking statement. In any event,
the Board considers the Company’s supply chains, dealing
predominantly with professional advisers and service
providers in the financial services industry, to be low risk
in relation to this matter.
GENDER DIVERSITY
The Board consists of three male directors and one
female director. The Company has no employees and
therefore there is nothing further to report in respect
of gender representation within the Company. The
Company’s policy on diversity is detailed in the Corporate
Governance Statement on page 53.
GREENHOUSE GAS EMISSIONS AND STREAMLINED
ENERGY AND CARBON REPORTING (“SECR”)
All the Company’s activities are outsourced to third
parties. The Company therefore has no greenhouse gas
emissions to report from its operations. In addition, the
Company considers itself to be a low energy user under
the SECR regulations and therefore is not required to
disclose energy and carbon information.
40 41
UIL Limited Report and Accounts for the year to 30 June 2024
BRIBERY ACT
The Company has a zero tolerance policy towards bribery
and is committed to carrying out business fairly, honestly
and openly. The Investment Managers also adopt a zero
tolerance approach and have policies and procedures in
place to prevent bribery.
CRIMINAL FINANCE ACT
The Company has a commitment to zero tolerance
towards the criminal facilitation of tax evasion.
SOCIAL, HUMAN RIGHTS AND COMMUNITY MATTERS
As an externally-managed investment company, the
Company does not have any employees or maintain any
premises. It therefore has no material, direct impact on
the environment or any particular community and the
Company itself has no environmental, human rights,
social or community policies. The Board, however, notes
the Investment Managers’ policy statement in respect of
responsible investing, as outlined on pages 38 and 39.
OUTLOOK
The Board’s main focus is on the achievement of the
Company’s objective of delivering a long-term total return
and the future of the Company is dependent upon the
success of its investment strategy. The outlook for the
Company is discussed in the Chairman’s Statement
and the main trends and factors likely to affect the
future development, performance and position of the
Company’s business can be found in the Investment
Managers’ Report.
This Strategic Report was approved by the Board of
Directors on 8 October 2024.
By order of the Board
ICM Limited
Company Secretary
8 October 2024
STRATEGIC REPORT (continued)
40 41
UIL Limited Report and Accounts for the year to 30 June 2024
CHARLES JILLINGS
Charles Jillings, a director of ICM and chief executive of ICMIM, is responsible
for the day-to-day running of UIL and the investment portfolio. He qualified as
a chartered accountant and has extensive experience in corporate finance and
asset management. He is an experienced director having previously been a non-
executive director of Special Utilities Investment Trust PLC, Utilico Emerging Markets
Limited and other companies in the financial services, water and waste sectors.
He is currently a director of Somers Limited and the newly merged company L&C
Waverton.
INVESTMENT MANAGERS AND TEAM
ICMIM, a company authorised and regulated by
the FCA, was the Company’s AIFM during the year
ended 30 June 2024 with sole responsibility for
risk management, subject to the overall policies,
supervision, review and control of the Board and is
joint portfolio manager of the Company, alongside ICM.
The Investment Managers are focused on finding
investments at valuations that do not reflect their true
long term value. Their investment approach is to have
a deep understanding of the business fundamentals
of each investment and its environment versus its
intrinsic value. The Investment Managers are long term
investors.
DUNCAN SAVILLE
Duncan Saville, a director of ICM, is a chartered accountant with experience in
corporate finance and asset management. He was formerly a non-executive director
of Special Utilities Investment Trust PLC and Utilico Investment Trust plc and is an
experienced non-executive director having been a director of multiple companies
in the financial services, utility, mining and technology sectors. He is currently a
non-executive director of ASX listed Resimac Group Limited and a director of H.R.L.
Morrison & Co Group GP Limited.
ICM manages over
£1.3bn
in funds directly and is responsible indirectly for a further £7.4bn of assets in subsidiary investments. ICM has
over 80 staff based in offices in Bermuda, Cape Town, Dublin, London, Seoul, Singapore, Sydney, Vancouver and
Wellington.
UIL has a broad investment mandate. To better execute the mandate UIL has set up a number of platforms to focus
the investment process and decisions. The Investment Managers have mirrored these platforms in establishing
investment teams dedicated to each.
The investment teams are led by Duncan Saville and Charles Jillings.
42 43
UIL Limited Report and Accounts for the year to 30 June 2024
INVESTMENT MANAGERS AND TEAM (continued)
UTILITIES & INFRASTRUCTURE
Jacqueline Broers, deputy portfolio manager of UEM, has been involved in the running of UIL
and UEM since September 2010. Mrs Broers is focused on the infrastructure and utilities sectors
worldwide with particular emphasis on emerging markets. Prior to joining the investment team,
Mrs Broers worked in the corporate finance team at Lehman Brothers and Nomura. Mrs Broers is a
qualified chartered accountant.
Mark Lebbell has been involved in the running of UIL and UEM since their inception and before
that was involved with Utilico Investment Trust plc and The Special Utilities Investment Trust
PLC since 2000. Mr Lebbell is focused on the communications sector worldwide with particular
emphasis on emerging markets. Mr Lebbell is an associate member of the Institute of Engineering
and Technology.
FIXED INCOME
Gavin Blessing joined ICM in 2012. He has over twenty-five years of experience, mostly in the
corporate fixed income markets, both investment grade and high yield. He worked as a credit
research analyst and portfolio manager at Goldman Sachs Asset Management in London for 10
years. Prior to joining ICM he was head of bond credit research at Canaccord Genuity in Dublin. Mr
Blessing is a qualified chartered accountant and CFA Charterholder.
Core teams assisting them at a senior level are:
Tristan Kingcott joined ICM in 2018 and is based in Vancouver, Canada. He is the portfolio
manager for Zeta Resources Limited and responsible for ICM’s Canadian office. He is focused on the
resources sector worldwide, and on the technology and financial services sectors in North America.
He has over fourteen years’ experience in financial and commercial analysis. He holds a Bachelor of
Commerce degree in finance from the University of Alberta, Canada, is a CFA Charterholder and a
Member of the CFA Society in Vancouver.
RESOURCES
Matthew Gould is responsible for ICM's quantum endeavour. He has experience across a range of
emerging technologies including Artificial Intelligence, Virtual Reality, and Fintech. Prior to joining
ICM, he was CEO of Arria NLG Limited, an AI software company. Mr Gould was with Hewlett Packard
("HP") where he led the Emerging Technologies practice, before transferring as the Chief Strategy
Officer for HP’s Professional Services division. He is a registered financial advisor and member of
the Institute of Directors, New Zealand.
TECHNOLOGY
Jason Cheong is the Managing Director of ICM AU Pty Ltd and holds various technology portfolio
directorships. He has fourteen years’ experience in private markets investing across venture capital
and private equity in Australia and the United Kingdom. Prior to joining ICM, he was a private
equity investor at Brookfield Asset Management and a mergers and acquisitions lawyer at Baker &
McKenzie, LLP. Mr Cheong is a qualified solicitor, admitted to practice in Australia.
42 43
UIL Limited Report and Accounts for the year to 30 June 2024
FINANCIAL SERVICES
Alasdair Younie is Chief Executive Officer and a director of ICM. Mr Younie is responsible for the
day to day running of the Somers Group, and he has significant experience in financial markets and
corporate finance. He worked for six years within the corporate finance department of Arbuthnot
Securities Limited in London. He is a director of Allectus Capital Limited, Somers Limited and West
Hamilton Holdings Limited. Mr Younie is a member of the Institute of Chartered Accountants in
England and Wales.
CORPORATE FINANCE
Sandra Pope is Chief Operating Officer and a director of ICMIM. She has over thirty years’
experience in corporate finance, having previously worked in corporate finance at Deloitte Haskins
& Sells, Hill Samuel Bank and Close Brothers for ten years and has worked for the ICM Group
since 1999. Mrs Pope is a qualified chartered accountant and is a director of a number of private
companies.
COMPANY SECRETARY, ICM LIMITED
Alastair Moreton joined ICM in 2017 to provide company secretarial services to the Company and
to UEM. He is a chartered accountant and has over thirty years’ experience in corporate finance
with Samuel Montagu, HSBC, Arbuthnot Securities and, prior to joining ICM, Stockdale Securities,
where he was responsible for the company’s closed-end fund corporate clients.
Dugald Morrison is responsible for Australasia and leads the team responsible for the ICM Mobility
Group. He is an experienced investment analyst, having worked in stockbroking, investment
banking and investment management firms in New Zealand, the United Kingdom and the United
States since 1987. Mr Morrison is a member of the New Zealand Institute of Directors.
ICM MOBILITY
44
UIL Limited
DIRECTORS
PETER DURHAGER*
Peter Durhager was appointed a Director and Chairman of the Audit & Risk Committee
in March 2024. Mr Durhager has over twenty five years of experience in financial,
telecommunications and energy sectors. He is currently an executive director of the
Allan & Gill Gray Foundation and a non-executive director of Harrington Re. He was
formerly the President of RenaissanceRe Services Ltd and EVP & Chief Administrative
Officer of RenaissanceRe Holdings Ltd. He was also formerly the Chairman of
Ascendant Group Limited, America’s Cup Bermuda, Somers Limited and the Bermuda
Community Foundation.
STUART BRIDGES
*
(CHAIRMAN)
Stuart Bridges was appointed a Director in October 2019 and Chairman in March
2024. He is chief financial officer of Inigo Limited, a nonlife insurance group operating
out of Lloyds of London. He is a chartered accountant and his previous roles included
chief financial officer of Control Risks Group, Nex Group plc (formerly ICAP plc) and
Hiscox plc. Prior to Hiscox, he held various senior positions in a number of financial
services companies in the United Kingdom and United States including Henderson
Global Investors.
ALISON HILL
*
Alison Hill, FCMA, CGMA, was appointed a Director in November 2015 and is an
executive director and chief executive officer of The Argus Group in Bermuda, which
provides insurance, retirement and financial services. Ms Hill has over twenty five
years’ experience in global corporations in the financial services sector. Ms Hill is a
trustee and a member of committees of a number of non-corporate organisations in
Bermuda. Ms Hill is a Fellow of the Chartered Institute of Management Accountants
and a Chartered Global Management Accountant.
DAVID SHILLSON
David Shillson, LLM (Hons), who was appointed a Director in November 2015, is an
experienced corporate and commercial lawyer and a senior partner of Dentons
Kensington Swan, the New Zealand member of Dentons, the global law firm. He has
acted for a variety of clients, particularly in acquisitions and investment structuring,
advising on transactional and governance matters across the utilities, transport,
energy, technology and finance sectors. Mr Shillson is a member of the New Zealand
Law Society and the New Zealand Institute of Directors.
*
Independent Director and member of the Audit & Risk Committee and Management Engagement Committee
45
Report and Accounts for the year to 30 June 2024
The Directors present the Annual Report and Accounts
of the Company for the year ended 30 June 2024.
STATUS OF THE COMPANY
UIL is a Bermuda exempted closed-end investment
company with registration number 39480. The
Company’s ordinary shares are admitted to trading
on the Specialist Fund Segment of the Main Market
of the London Stock Exchange and have a secondary
listing on the Bermuda Stock Exchange. UIL Finance’s
ZDP shares are listed in the Non-equity shares and
non-voting equity shares category of the Official List of
the Financial Conduct Authority and are traded on the
Main Market of the London Stock Exchange. UIL is a
member of the AIC in the UK.
The Company’s subsidiary undertaking, UIL Finance,
carries on business as an investment company.
THE ALTERNATIVE INVESTMENT FUND MANAGERS
DIRECTIVE (“AIFMD”)
The Company is a non-EU Alternative Investment Fund
(“AIF”) for the purposes of the AIFMD. The Company
has appointed ICMIM, an English incorporated
company which is regulated by the FCA, as its AIFM,
with sole responsibility for risk management and ICM
and ICMIM jointly to provide portfolio management
services.
The AIFMD requires certain information to be made
available to investors in AIFs before they invest and
requires that material changes to this information be
disclosed in the annual report of each AIF. An Investor
Disclosure Document, which sets out information
on the Company’s investment strategy and policies,
leverage, risk, liquidity, administration, management,
fees, conflicts of interest and other shareholder
information, is available on the Company’s website at
www.uil.limited.
UIL has also appointed JPMEL as its depositary
services provider. JPMEL’s responsibilities include
general oversight over the issue and cancellation of
the Company’s shares, the calculation of the NAV, cash
monitoring and asset verification and record keeping.
JPMEL receives a fee of 2.2bps on UIL’s NAV for its
services, subject to a minimum fee of £25,000 per
annum, payable monthly in arrears.
FUND MANAGEMENT ARRANGEMENTS
The aggregate fees payable by the Company to
ICMIM and ICM under the Investment Management
Agreement (“IMA”) are 0.5% per annum of gross assets
after deducting current liabilities (excluding borrowings
incurred for investment purposes), payable quarterly
in arrears, with such fees to be apportioned between
ICMIM and ICM as agreed by them. The Investment
Managers may also become entitled to a performance-
related fee. The IMA may be terminated on one year’s
notice in writing and further details of the management
and performance fees are disclosed in note 4 to the
accounts.
Under the IMA, ICM has been appointed as Company
Secretary.
The Board continually reviews the policies and
performance of the Investment Managers. The Board’s
philosophy and the Investment Managers’ approach
are that the portfolio should consist of shares thought
attractive irrespective of their inclusion or weighting
in any index. Over the long term, the Board expects
the combination of the Company’s and Investment
Managers’ approach to generate a positive return for
shareholders. The Board continues to believe that the
appointment of ICMIM and ICM on the terms agreed is
in the interests of shareholders as a whole.
ADMINISTRATION
The provision of accounting and administration
services has been outsourced to JPMorgan Chase
Bank N.A. – London Branch (the “Administrator”).
The Administrator provides financial and general
administrative services to the Company for an annual
fee based on the Company’s month end NAV (5 bps
on the first £100m NAV, 3bps on the next £150m
NAV, 2bps on the next £250m NAV and 1.5bps on the
next £500m NAV). The Administrator and any of its
delegates are also entitled to reimbursement of certain
expenses incurred by it in connection with its duties.
In addition, ICMIM has appointed Waverton to provide
certain support services (including middle office,
market dealing and information technology support
services). Waverton is entitled to receive an annual
fee of 3bps of the Company’s gross assets and the
Company reimburses ICMIM for its costs and expenses
incurred in relation to this agreement.
DIRECTORS’ REPORT
46 47
UIL Limited Report and Accounts for the year to 30 June 2024
DIRECTORS’ REPORT (continued)
Annually, the Management Engagement Committee
considers the ongoing administrative requirements of
the Company and assesses the services provided.
SAFE CUSTODY OF ASSETS
During the year ended 30 June 2024, most of UIL’s
investments were held in custody for the Company by
JPMorgan Chase Bank N.A., Jersey (the “Custodian”).
Operational matters with the Custodian are carried
out on the Company’s behalf by ICMIM and the
Administrator in accordance with the IMA and the
Administration Agreement. The Custodian is paid
a variable fee dependent on the number of trades
transacted and the location of the securities held.
FINANCIAL INSTRUMENTS
The Company’s financial instruments comprise its
investment portfolio, cash balances, bank borrowings
and debtors and creditors which arise directly from
its operations such as sales and purchases awaiting
settlement, and accrued income. The financial risk
management objectives and policies arising from
its financial instruments and the exposure of the
Company to risk are disclosed in note 29 to the
accounts.
DIVIDENDS
Dividends of 2.00p per share were paid on 21 December
2023, 23 May 2024 and 31 July 2024. A dividend of 2.00p
per share was declared on 16 September 2024 for
payment on 8 November 2024 to shareholders on the
register as at 27 September 2024. In aggregate, the four
interim dividends in respect of the year amount to 8.00p
per ordinary share.
ISA AND NMPI
The ordinary shares and the ZDP shares remain
qualifying investments under the Individual Savings
Account (“ISA”) regulations and it is the intention of
the Board to continue to satisfy these regulations.
Furthermore, the Company currently conducts its
affairs so that its shares can be recommended by
IFAs to ordinary retail investors in accordance with
the FCA’s rules in relation to non-mainstream pooled
investments and intends to continue to do so for the
foreseeable future.
GOING CONCERN
The Board has reviewed the going concern basis of
accounting for the Company. A material proportion of
the Company’s investments comprise listed securities.
16.5% of the total portfolio as at 30 June 2024 is in
level 1 investments which, in most circumstances,
could likely be sold to meet funding requirements,
if necessary. The Board has performed a detailed
assessment of the Company’s operational risk and
resources including its ability to meet its liabilities as
they fall due, by conducting stress tests and scenarios
which considered the impact of severe stock market
and currency volatility. This is set out in note 28 to
the accounts. In light of this work and there being no
material uncertainties related to events or conditions
that may cast significant doubt about the ability of the
Company to continue as a going concern, the Board
has a reasonable expectation that the Company
has adequate resources to continue in operational
existence for a period of at least the next twelve
months from the date of approval of these financial
statements. Accordingly, the Board considers it
appropriate to continue to adopt the going concern
basis in preparing the accounts.
DIRECTORS
UIL has a Board of four non-executive Directors who
oversee and monitor the activities of the Investment
Managers and other service providers and ensure that
the Company’s investment policy is adhered to. The
Board is supported by an Audit & Risk Committee and
a Management Engagement Committee, which deal
with specific aspects of the Company’s affairs. The
Corporate Governance Statement, which is set out on
pages 50 to 54, forms part of this Directors’ Report.
The Directors have a range of business, financial and
asset management skills as well as experience relevant
to the direction and control of the Company. Brief
biographical details of the members of the Board are
shown on page 44. All the Directors are independent
other than Mr Shillson, who is a partner of Dentons
Kensington Swan, a New Zealand law firm which has
acted for members of the UIL and ICM groups.
UIL’s Bye-laws require that a Director be subject to
election at the first AGM after appointment and shall
retire and be subject to re-election at least every three
years thereafter. However, in accordance with the AIC
46 47
UIL Limited Report and Accounts for the year to 30 June 2024
Code of Corporate Governance, all the directors are
subject to annual re-election. Consequently, at the
forthcoming AGM, Mr Durhager will stand for election
and Mr Bridges, Ms Hill and Mr Shilson will stand for
re-election.
The nature of an investment company and the
relationship between the Board and the Investment
Managers are such that it is considered unnecessary
to identify a senior independent director. Any of the
Directors is available to shareholders if they have
concerns which have not been resolved through the
normal channels of contact with the Chairman or the
Investment Managers, or for which such channels are
inappropriate.
The duty to Promote the Success of the Company
section on pages 37 and 38 forms part of this
Directors' Report.
DIRECTORS’ INDEMNITY AND INSURANCE
As permitted by the Company’s Bye-laws, the Directors
have the benefit of an indemnity under which the
Company has agreed to indemnify each Director, to the
extent permitted by law, in respect of certain liabilities
incurred as a result of carrying out his/her role as a
Director of the Company. The indemnity was in place
during the year and as at the date of this report.
UIL also maintains Directors’ and Officers’ liability
insurance which provides appropriate cover for any
legal action brought against the Directors.
DIRECTORS’ INTERESTS
The Directors’ interests in the ordinary share capital
of the Company are disclosed in the Directors’
Remuneration Report.
No Director was a party to, or had any interests in,
any contract or arrangement with the Company at any
time during the year or at the year end. There are no
agreements between the Company and its Directors
concerning compensation for loss of office.
A Director must avoid a situation where he/she has,
or can have, a direct or indirect interest that conflicts,
or possibly may conflict, with the Company’s interests.
The Directors have declared any potential conflicts of
interest to the Company which are reviewed regularly
by the Board. The Directors have undertaken to advise
the Company Secretary and/or Chairman as soon
as they become aware of any potential conflicts of
interest.
SHARE CAPITAL
As at 30 June 2024 the issued ordinary share capital
of the Company and the total voting rights were
83,842,918 ordinary shares. As at the date of this
report the issued share capital and total voting
rights were 83,755,585 ordinary shares. There are
no restrictions on the transfer of securities in the
Company and there are no special rights attached to
any of the shares.
SHARE ISSUES AND REPURCHASES
UIL has the authority to purchase shares in the
market and to issue new shares for cash. During the
year ended 30 June 2024 no ordinary shares were
purchased by the Company. The current authority
to repurchase shares was granted to Directors on
9 November 2023 and expires at the conclusion of
the next AGM. The Directors are proposing that their
authority to buy back up to 14.99% of the Company’s
shares and to issue new shares up to 10% of the
Company’s issued ordinary share capital be renewed
at the forthcoming AGM.
SUBSTANTIAL SHARE INTERESTS
As at the date of this report, the Company had
received notification from Mr Duncan Saville that he
had an interest in 63,498,387 ordinary shares (75.8%
of UIL’s issued share capital) which included the
holding of General Provincial Life Pension Fund Limited
(54,861,466 ordinary shares (65.5%)).
THE COMMON REPORTING STANDARD
Tax legislation under The OECD (Organisation for
Economic Co-operation and Development) Common
Reporting Standard for Automatic Exchange of
Financial Account Information (the “Common Reporting
Standard”) was introduced on 1 January 2016. The
legislation requires UIL, as an investment company,
to provide personal information on shareholders to
the Company’s local tax authority in Bermuda. The
Bermuda tax authority may in turn exchange the
information with the tax authorities of another country
or countries in which the shareholder may be tax
resident, where those countries (or tax authorities
in those countries) have entered into agreements
48 49
UIL Limited Report and Accounts for the year to 30 June 2024
to exchange financial account information. The
Company’s registrars have been engaged to collate
such information and file reports on behalf of the
Company.
All new shareholders, excluding those whose shares
are held as depositary interests, who are entered on
the share register will be sent a certification form for
the purposes of collecting this information.
AUDIT INFORMATION AND AUDITOR
The Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as they are
aware, there is no relevant audit information of which
the Company’s auditor is unaware; and each Director
has taken all the steps that they ought to have taken as
a Director to make themselves aware of any relevant
audit information and to establish that the Company’s
auditor is aware of that information.
LISTING RULE 6.6.1R
The ordinary shares of UIL are admitted to the
Specialist Fund Segment and therefore the Listing
Rules do not technically apply to it. However it
has agreed to comply voluntarily with certain key
provisions of the Listing Rules, including Listing
Rule 6.6, and confirms that there are no instances
where the Company is required to make disclosures
in respect of Listing Rule 6.6.1R (information to be
included in annual report and accounts).
ANNUAL GENERAL MEETING
The following information to be discussed at the
forthcoming AGM is important and requires your
immediate attention. If you are in any doubt about the
action you should take, you should seek advice from
your stockbroker, bank manager, solicitor, accountant
or other financial adviser authorised under the
Financial Services and Markets Act 2000 (as amended).
If you have sold or transferred all of your shares in the
Company, you should pass this document, together
with any other accompanying documents including the
form of proxy, at once to the purchaser or transferee,
or to the stockbroker, bank or other agent through
whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
The business of the AGM consists of 11 resolutions.
Resolutions 1 to 10 (inclusive) will be proposed
as ordinary resolutions and resolution 11 will be
proposed as a special resolution.
Ordinary Resolution 1 – Annual Report and Financial
Statements
This resolution seeks shareholder approval to receive
the Directors’ Report, the Independent Auditor’s
Report and the Financial Statements for the year
ended 30 June 2024.
Ordinary Resolution 2 – Approval of the Directors’
Remuneration Report
This resolution is an advisory vote on the Directors’
Remuneration Report.
Ordinary Resolution 3 – Approval of the Company’s
dividend policy
This resolution seeks shareholder approval of the
Company’s dividend policy to pay four interim
dividends per year. Under the Company’s Bye-laws, the
Board is authorised to approve the payment of interim
dividends without the need for the prior approval of
the Company’s shareholders.
Having regard to corporate governance best practice
relating to the payment of interim dividends without
the approval of a final dividend by a company’s
shareholders, the Board has decided to seek express
approval from shareholders of its dividend policy to
pay four interim dividends per year. If this resolution
is not passed, it is the intention of the Board to
refrain from authorising any further interim dividends
until such time as the Company’s dividend policy is
approved by its shareholders.
Ordinary Resolutions 4 to 7 (inclusive) – Election and
re-election of Directors
The biographies of the Directors are set out on page
44 and are incorporated into this report by reference.
Resolution 4 relates to the election of Mr Peter
Durhager who was appointed on 31 March 2024. Mr
Durhager has many years of experience in the financial,
telecommunications and energy sectors. He brings
this strong background and skills to his role as the
Company’s Audit & Risk Committee Chairman, as well
as his deep knowledge of Bermuda.
Resolution 5 relates to the re-election of Mr Stuart
Bridges who was appointed Chairman on 31 March
DIRECTORS’ REPORT (continued)
48 49
UIL Limited Report and Accounts for the year to 30 June 2024
2024, having joined the Board on 2 October 2019. Mr
Bridges’ leadership of the Board as Chairman draws on
his long and varied experience on the boards of many
listed and unlisted companies. His focus is on long-
term strategic issues, which are key topics of Board
discussion.
Resolution 6 relates to the re-election of Ms Alison
Hill who was appointed on 16 November 2015. Ms
Hill is based in Bermuda and is an executive director
and chief executive officer of the financial services
company, The Argus Group. She therefore brings
extensive financial services experience and knowledge
of Bermuda to her role on the Board.
Resolution 7 relates to the re-election of Mr David
Shillson who was appointed on 16 November 2015. Mr
Shillson brings significant legal experience to his role
on the Board which draws on a track record of advising
on acquisitions and investment structuring in many of
the sectors in which the Company invests.
Ordinary Resolutions 8 and 9 – Appointment of the
external Auditor and the Auditor’s Remuneration
These resolutions relate to the appointment and
remuneration of the Company’s auditor. In June 2024,
the Board decided to appoint KPMG Audit Limited
as auditor of the Company, replacing KPMG LLP
which had been auditor since 2012. The Company,
through its Audit & Risk Committee, has considered
the independence and objectivity of the external
auditor and is satisfied that the proposed Auditor is
independent. Further information in relation to the
assessment of the existing Auditor’s independence can
be found in the report of the Audit & Risk Committee.
Resolutions relating to the following items of special
business will be proposed at the forthcoming AGM:
Ordinary Resolution 10 – Authority to buy back
shares
This resolution seeks to renew the authority granted
to Directors enabling the Company to purchase its
own shares. The Directors will consider repurchasing
shares in the market if they believe it to be in
shareholders’ interests and as a means of correcting
any imbalance between supply and demand for the
Company’s shares. Any shares purchased pursuant to
this resolution shall be cancelled immediately upon
completion of the purchase or held, sold, transferred
or otherwise dealt with as treasury shares.
The Directors are seeking authority to purchase in the
market up to 12,554,000 ordinary shares (representing
approximately 14.99% of the issued ordinary shares as
at the date of the Notice of AGM). This authority, unless
renewed at an earlier general meeting, will expire at
the conclusion of the next AGM of the Company to be
held in 2025.
Special Resolution 11 – Authority to disapply pre-
emption rights
The Company’s Bye-laws provide that, unless
otherwise determined by a special resolution, the
Company is not able to allot ordinary shares for cash
without offering them to existing shareholders first in
proportion to their shareholdings. This resolution will
grant the Company authority to dis-apply these pre-
emption rights in respect of up to 8,375,000 ordinary
shares (representing approximately 10% of the issued
ordinary shares as at the date of the Notice of AGM).
Any such sale of shares would only be made at prices
greater than NAV and would therefore increase
the assets underlying each share. This resolution
will expire at the conclusion of the next AGM of the
Company to be held in 2025 unless renewed prior to
that date at an earlier general meeting.
Resolution 11 is a special resolution and will require
the approval of a 75% majority of votes cast in respect
of it.
RECOMMENDATION
The Board considers that each of the resolutions to be
proposed at the AGM is likely to promote the success
of the Company for the benefit of its members as a
whole and are in the best interests of the Company
and its shareholders as a whole. The Directors
unanimously recommend that shareholders vote in
favour of these resolutions as they intend to do in
respect of their own beneficial holdings.
By order of the Board
ICM Limited
Secretary
8 October 2024
50
UIL Limited
CORPORATE GOVERNANCE STATEMENT
Four non-executive directors (NEDs)
CHAIRMAN:
Stuart Bridges
AUDIT & RISK
COMMITTEE
MANAGEMENT
ENGAGEMENT
COMMITTEE
NOMINATION
COMMITTEE
FUNCTION
REMUNERATION
COMMITTEE
FUNCTION
All the independent
Directors
CHAIRMAN:
Peter Durhager
KEY OBJECTIVE:
• to oversee the
financial reporting
and control
environment.
All the independent
Directors
CHAIRMAN:
Stuart Bridges
KEY OBJECTIVES:
• to review the
performance of
the Investment
Managers and the
Administrator; and
• to review the
performance of
other service
providers.
The Board as a
whole performs
this function
KEY OBJECTIVES:
• to regularly review
the Board’s structure
and composition;
and
• to consider any new
appointments.
The Board as a
whole performs
this function
KEY OBJECTIVE:
• to set the
remuneration policy
for the Directors of
the Company.
THE BOARD
KEY OBJECTIVES:
• to set strategy, values and
standards;
• to provide leadership within
a framework of prudent and
effective controls which enable
risks to be assessed and
managed; and
• to constructively challenge
and scrutinise performance
of all outsourced activities.
THE COMPANY‘S CORPORATE GOVERNANCE FRAMEWORK
Corporate Governance is the process by which the board of directors of a company protects shareholders’
interests and by which it seeks to enhance shareholder value. Shareholders hold the directors responsible for the
stewardship of a company’s affairs, delegating authority and responsibility to the directors to manage the company
on their behalf and holding them accountable for its performance. Responsibility for good governance lies with
the Board. The Board considers the practice of good governance to be an integral part of the way it manages
the Company and is committed to maintaining high standards of financial reporting, transparency and business
integrity.
The governance framework of the Company reflects the fact that, as an investment company, it has no full-time
employees and outsources its activities to third party service providers.
51
Report and Accounts for the year to 30 June 2024
THE AIC CODE OF CORPORATE GOVERNANCE
The Board’s principal governance reporting obligation
is in relation to the UK Corporate Governance Code
(the “UK Code”) issued by the Financial Reporting
Council (“FRC”) in July 2018. However, it is recognised
that investment companies have special circumstances
which have an impact on their governance
arrangements. An investment company typically has
no employees and the roles of portfolio management,
administration, accounting and company secretarial
tend to be outsourced to third parties. The AIC has
therefore drawn up its own set of guidelines known as
the AIC Code of Corporate Governance (the “AIC Code”)
issued in February 2019, which recognises the nature
of investment companies by focusing on matters such
as board independence and the review of management
and other third party contracts. The FRC has endorsed
the AIC Code and confirmed that companies which
report against the AIC Code will be meeting their
obligations in relation to the UK Code and paragraph LR
6.6.6 of the FCA’s Listing Rules. The Board believes that
reporting against the principles and recommendations
of the AIC Code will provide better information to
shareholders.
The UK Code is available from the FRC’s website at
www.frc.org.uk. The AIC Code is available from the
Association of Investment Companies’ website at
www.theaic.co.uk.
COMPLIANCE WITH THE AIC CODE
During the year ended 30 June 2024, the Company
complied with the recommendations of the AIC Code
and the relevant provisions of the UK Code, except
those relating to:
• the role of the chief executive;
• executive directors’ remuneration;
• the need for an internal audit function;
• nomination of a senior independent director; and
• membership of the Audit & Risk Committee by the
Chairman of the Board.
For the reasons set out in the AIC Code and as
explained in the UK Code, the Board considers these
provisions are not relevant to the position of UIL, being
an externally managed investment company. The Board
is composed entirely of non-executive directors and
therefore the Board does not believe it is necessary to
nominate a senior independent director. In addition,
as explained in the Audit & Risk Committee Report, the
Chairman of the Board is also a member of the Audit &
Risk Committee, as permitted by the AIC Code.
Information on how the Company has applied the
principles of the AIC Code and the UK Code is set out
below.
THE BOARD
The Board is responsible to shareholders for the overall
stewardship of the Company. A formal schedule of
matters reserved for the decision of the Board has been
adopted. Investment policy and strategy are determined
by the Board and it is also responsible for the gearing
policy, dividend policy, public documents, such as the
Annual Report and Financial Statements, the buy-back
policy and corporate governance matters. In order to
enable the Directors to discharge their responsibilities
effectively the Board has full and timely access to
relevant information.
The Board meets at least three times a year, with
additional Board and Committee meetings being held
on an ad hoc basis to consider investment performance
and particular issues as they arise. Key representatives
of the Investment Managers attend each meeting and
between these meetings there is regular contact with
the Investment Managers. Board meetings may be held
in countries where the Company holds investments and
the Board will then meet with investee companies and
local experts.
The Board has direct access to the advice and services
of the Company Secretary, who is an employee of
ICM. The Company Secretary, with advice from the
Company’s lawyers and financial advisers, is responsible
for ensuring that the Board and Committee procedures
are followed and that applicable rules and regulations
are complied with. The Company Secretary is also
responsible to the Board for ensuring timely delivery
of information and reports and that the statutory
obligations of the Company are met. The Company
Secretary is responsible for advising the Board, through
the Chairman, on all governance matters.
There is an agreed procedure for Directors, in the
furtherance of their duties, to take legal advice at the
Company’s expense, having first consulted with the
Chairman.
52
UIL Limited
CORPORATE GOVERNANCE STATEMENT (continued)
During the year, none of the Directors took on any
significant new commitments or appointments. All of
the Directors consider that they have sufficient time to
discharge their duties.
There were three Board meetings, three Audit &
Risk Committee meetings and one Management
Engagement Committee meeting held during the year
and the attendance by the Directors was as follows:
Board
Audit & Risk
Committee
Management
Engagement
Committee
Number of scheduled
meetings held during
the year 3 3 1
Stuart Bridges 3 3 1
Peter Burrows
(retired 31 March
2024)
2/2 2/2 1
Peter Durhager
(appointed 31 March
2024)
1/1 1/1 0/0
Alison Hill 3 3 1
David Shillson 3 n/a n/a
Apart from the meetings detailed above, there were a
number of meetings held by committees of the Board
to discuss investment performance, approve the
declaration of quarterly dividends and other ad hoc
items.
AUDIT & RISK COMMITTEE
The Audit & Risk Committee comprises all the
independent Directors of the Company and is chaired
by Mr Durhager who took over from Mr Bridges
following his appointment as Chairman during the
year. Further details of the Audit & Risk Committee are
provided in its report starting on page 58.
MANAGEMENT ENGAGEMENT COMMITTEE
The Management Engagement Committee, which is
chaired by Mr Bridges, comprises all the independent
Directors of the Company and meets at least once a
year.
The Investment Managers’ performance is considered
by the Board at every meeting, with a formal evaluation
by the Management Engagement Committee annually.
The Board received detailed reports and views from
the Investment Managers on investment policy, asset
allocation, gearing and risk at each Board meeting in the
year ended 30 June 2024, with ad hoc market/ company
updates if there were significant movements in the
intervening period.
The Management Engagement Committee also
considers the effectiveness of the administration
services provided by the Investment Managers and
Administrator and the performance of other third
party service providers. In this regard the Committee
assessed the services provided by the Investment
Managers, the Administrator and the other service
providers to be good.
REMUNERATION COMMITTEE
The Board as a whole undertakes the work which
would otherwise be undertaken by a Remuneration
Committee. Further details are provided in the
Directors’ Remuneration Report starting on page 55.
INTERNAL CONTROLS
The Directors acknowledge that they are responsible for
ensuring that the Company maintains a sound system
of internal financial and non-financial controls (“internal
controls”) to safeguard shareholders’ investments and
the Company’s assets.
The Company’s system of internal control is designed to
manage rather than eliminate risk of failure to achieve
the Company’s investment objective and/or adhere to
the Company’s investment policy and/or investment
limits. The system can therefore only provide
reasonable and not absolute assurance against material
misstatement or loss.
The Investment Managers, Administrator and Custodian
maintain their own systems of internal controls and the
Board and the Audit & Risk Committee receive regular
reports from these service providers.
The Board meets regularly, at least three times a year.
It reviews financial reports and performance against
relevant stock market criteria and the Company’s peer
group, amongst other things. The effectiveness of
the Company’s system of internal controls, including
financial, operational and compliance and risk
management systems is reviewed at least bi-annually
against risk parameters approved by the Board. The
Board confirms that the necessary actions are taken to
remedy any significant failings or weaknesses identified
53
Report and Accounts for the year to 30 June 2024
from its review. No significant failings or weaknesses
occurred during the year ended 30 June 2024 or
subsequently up to the date of this report.
BOARD DIVERSITY, APPOINTMENT, RE-ELECTION
AND TENURE
The Board as a whole undertakes the responsibilities
which would otherwise be assumed by a nomination
committee since the Board is composed solely of non-
executive Directors. It considers the size and structure
of the Board, including the balance of expertise and
skills brought by individual Directors. It supports the
principles of boardroom diversity, including gender
and ethnicity, progressive refreshing and succession
planning and such matters are discussed by the Board
as a whole at least annually. The Company’s policy is
that the Board should be comprised of directors with
a diverse range of skills, knowledge and experience
and that any new appointments should be made on
the basis of merit, against objective criteria including
diversity. Listing Rule 6.6.6, against which the Company
has agreed to comply voluntarily, requires companies to
report against the following three diversity targets:
(i) At least 40% of individuals on the board are women;
(ii) At least one of the senior board positions (defined
in the Listing Rules as the chair, CEO, SID and CFO) is
held by a woman; and
(iii) At least one individual on the board is from a
minority ethnic background.
As at 30 June 2024, UIL’s Board consists of three men
and one woman and UIL does not comply with targets (i)
and (iii). As provided for in the Listing Rules, investment
companies do not need to report against target (ii) if it
is inapplicable. The Board believes that, since UIL is an
externally managed investment company which does
not have executive management functions, including
the roles of CEO or CFO, this target is not applicable.
The Board has chosen to align its diversity reporting
reference date with the Company’s financial year end. As
required by the Listing Rules, further details in relation
to the three diversity targets are set out in the tables
below. The information was obtained by asking each of
the Directors how they wished to be categorised for the
purposes of these disclosures:
30 June 2024
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on
the Board (CEO,
CFO, SID, Chair)
Men 3 75%
Not applicable*
Women 1 25%
30 June 2024
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on
the Board (CEO,
CFO, SID, Chair)
White British
or other White
(including
minority-white
groups) 4 100%
Not applicable*
Mixed/Multiple
Ethnic groups – –
Asian/Asian
British – –
Black/African/
Caribbean/Black
British – –
Other Ethnic
group – –
Not specified/
prefer not to say – –
* This column is inapplicable as the company is externally managed
and does not have executive management functions, specifically it
does not have a CEO , CFO.
Whilst the current composition of the Board does not
satisfy targets (i) and (iii), the Board will continue to
have regard to boardroom diversity, including gender
and ethnicity, during its consideration of succession
planning and future Board appointments.
The Board is of the view that length of service does
not necessarily compromise the independence or
contribution of directors of an investment company,
where continuity and experience can add significantly
to the strength of the Board. This is supported by the
views on independence expressed in the AIC Code.
No limit on the overall length of service of any of the
Company’s Directors, including the Chairman, has
been imposed. All Directors are subject to annual re-
election.
The Board reviews succession planning at least
annually. Appointments of new Directors will be made
on a formalised basis with the Chairman agreeing, in
54
UIL Limited
conjunction with his colleagues, a job specification
and other relevant selection criteria and the methods
of recruitment (where appropriate using an external
recruitment agency), selection and appointment. The
potential Director would meet with Board members
prior to formal appointment. An induction process
will be undertaken, with new appointees to the
Board being given a full briefing on the workings and
processes of the Company and the management of the
Company by the Chairman, the Investment Managers,
the Company Secretary and other appropriate
persons. All appointments are subject to subsequent
confirmation by shareholders in general meeting.
BOARD, COMMITTEE AND DIRECTORS’
PERFORMANCE APPRAISAL
The Directors recognise the importance of the AIC
Code’s recommendations in respect of evaluating
the performance of the Board, the Committees
and individual Directors. This encompasses both
quantitative and qualitative measures of performance
including:
• attendance at meetings;
• the independence of individual Directors;
• the ability of Directors to make an effective
contribution to the Board and Committees
through the range and diversity of skills and
experience each Director brings to their role; and
• the Board’s ability to challenge the Investment
Managers’ recommendations, suggest areas
of debate and set the future strategy of the
Company.
The Board opted to conduct performance evaluation
through questionnaires and discussion between
the Directors, the Chairman and the chairmen
of the Committees. This process is conducted by
the Chairman reviewing individually with each of
the Directors their performance, contribution and
commitment to the Company and the possible further
development of skills. In addition, the Chair of the
Audit & Risk Committee reviews the performance of
the Chairman with the other Directors, taking into
account the views of the Investment Managers. The
relevant points arising from these meetings are then
reported to, and discussed by, the Board as a whole.
This process has been carried out in respect of the
year under review and will be conducted on an annual
basis. The result of this year’s performance evaluation
process was that the Board, the Committees of the
Board and the Directors individually were all assessed
to have performed satisfactorily. No follow-up actions
were required.
It is not felt appropriate currently to employ the
services of, or to incur the additional expense of, an
external third party to conduct the evaluation process
as an appropriate process is in place; this will, however,
be kept under review.
RELATIONS WITH SHAREHOLDERS
UIL welcomes the views of shareholders and
places great importance on communication with
shareholders.
The prime medium by which the Company
communicates with shareholders is through the
half-yearly and annual financial reports, which aim
to provide shareholders with a full understanding
of the Company’s activities and its results. This
information is supplemented by the calculation and
publication, via a Regulatory Information Service, of
the NAV of the Company’s shares and by monthly
fact sheets produced by the Investment Managers.
Shareholders can visit the Company’s website:
www.uil.limited in order to access copies of half-yearly
and annual financial reports, factsheets and regulatory
announcements.
The Investment Managers hold meetings with the
Company’s largest shareholders and report back
to the Board on these meetings. The Chairman and
other Directors are available to discuss any concerns
with shareholders, if required and shareholders may
communicate with the Company at any time by writing
to the Board at the Company’s registered office or
contacting the Company’s broker.
By order of the Board
ICM Limited
Company Secretary
8 October 2024
CORPORATE GOVERNANCE STATEMENT (continued)
55
Report and Accounts for the year to 30 June 2024
DIRECTORS’ REMUNERATION REPORT
The Board presents the report on Directors’
remuneration for the year ended 30 June 2024. The
report comprises a remuneration policy, which is
subject to a triennial binding shareholder vote, or
sooner if an alteration to the policy is proposed, and a
report on remuneration, which is subject to an annual
advisory vote. An ordinary resolution for the approval
of this report will be put to shareholders at the
Company’s forthcoming AGM.
The Board’s policy on remuneration is set out below.
A key element is that fees payable to Directors should
reflect the time spent by them on the Company’s
affairs and should be sufficient to attract and retain
individuals with suitable knowledge and experience
to promote the long term success of the Company
whilst also reflecting the time commitment and
responsibilities of the role. There were no changes to
the policy during the year.
The Board is composed solely of non-executive
Directors, none of whom has a service contract
with the Company and therefore no remuneration
committee has been appointed. The Board as a whole
undertakes the responsibilities which would otherwise
be assumed by a remuneration committee.
DIRECTORS’ REMUNERATION POLICY
The Board considers the level of the Directors' fees
at least annually. The Board determines the level of
Directors’ fees within the limit currently set by the
Company’s Bye-laws, which limit the aggregate fees
payable to the Directors to a total of £250,000 per
annum.
The Board’s policy is to set Directors’ remuneration at
a level commensurate with the skills and experience
necessary for the effective stewardship of the
Company and the expected contribution of the Board
as a whole in continuing to achieve the investment
objective. Time committed to the Company’s business
and the specific responsibilities of the Chairman,
Directors and the chairman of the Audit & Risk
Committee are taken into account. The policy aims
to be fair and reasonable in relation to comparable
investment companies.
The fees are fixed and are payable in cash, quarterly
in arrears. Directors are entitled to be reimbursed for
any reasonable expenses properly incurred by them
in connection with the performance of their duties
and attendance at Board and general meetings and
Committee meetings. Directors are not eligible for
bonuses, pension benefits, share options, long-term
incentive schemes or other benefits.
Directors are provided with a letter of appointment
when they join the Board. There is no provision for
compensation upon early termination of appointment.
The letters of appointment are available on request at
the Company’s registered office during business hours.
DIRECTORS’ REMUNERATION
The Board reviews the fees payable to the Chairman
and Directors annually. The review in respect of the
year ending 30 June 2025 has resulted in the increases
being applied to the annual fees as detailed in the
table below.
Year ending 30 June
2025
£’000s
2024
*
£’000s
Chairman 53.6 52.5
Directors 39.6 38.9
Chairman of Audit & Risk Committee 51.2 50.2
*
Actual
VOTING AT ANNUAL GENERAL MEETING
A resolution to approve the Remuneration Report was
put to shareholders at the AGM of the Company held
on 9 November 2023. Of the votes cast, 99.96% were
in favour and 0.04% were against; this resolution will
be put to shareholders again this year. The Company
seeks shareholder approval for its remuneration policy
on a triennial basis and a binding resolution was last
put to shareholders at the AGM held on 9 November
2023. Of the votes cast, 99.96% were in favour and
0.04% were against. A resolution to approve the
remuneration policy will be put to shareholders at the
AGM to be held in 2026.
56 57
UIL Limited Report and Accounts for the year to 30 June 2024
DIRECTORS’ REMUNERATION REPORT (continued)
DIRECTORS’ ANNUAL REPORT ON REMUNERATION
A single figure for the total remuneration of each
Director is set out in the table below for the year
ended 30 June 2024.
Year ended
30 June
2024
£
2023
£
Peter Burrows
1
39,375 50,000
Stuart Bridges
2
50,738 47,750
Peter Durhager
3
12,538 –
Alison Hill 38,850 37,000
Christopher Samuel
4
– 33,917
David Shillson 38,850 37,000
Total 180,351 205,667
(1) Mr Burrows retired from the Board on 31 March 2024
(2) Mr Bridges was appointed Chairman on 31 March 2024
(3) Mr Durhager was appointed to the Board on 31 March 2024
(4) Mr Samuel retired from the Board on 31 May 2023
ANNUAL PERCENTAGE CHANGE IN DIRECTORS’
REMUNERATION
The following table sets out the annual percentage
change in Directors’ remuneration compared to the
previous year.
Year ended
30 June
2024
%
2023
%
2022
%
2021
%
2020
%
Peter Burrows
1
5.0 5.0 3.5 100.0 (48.9)
Stuart Bridges 5.0 4.9 3.4 0.0 n/a
Peter Durhager n/a n/a n/a n/a n/a
Alison Hill 5.0 5.1 3.5 0.0 2.3
David Shillson 5.0 5.1 3.5 0.0 2.3
(1) Mr Burrows waived 50% of his fee entitlement during the year ended
30 June 2020.
RELATIVE IMPORTANCE OF SPEND ON PAY
The following table compares the remuneration
paid to the Directors with aggregate distributions
paid to shareholders relating to the year to 30 June
2024 and the prior year. Although this disclosure is
a statutory requirement, the Directors consider that
comparison of Directors’ remuneration with annual
dividends and share buybacks does not provide a
meaningful measure relative to the Company’s overall
performance as an investment company with an
objective of providing shareholders with long-term
total return.
Year ended
30 June
2024
£’000s
2023
£’000s
CHANGE
£’000s
Aggregate Directors’
emoluments 180 206 (26)
Aggregate dividends 6,706 6,708 (2)
Aggregate share buybacks – – –
DIRECTORS’ BENEFICIAL SHARE INTERESTS
(AUDITED)
The Directors’ (and any connected persons) holdings of
ordinary shares are detailed below:
As at 30 June
19 SEPT
2024
30 JUNE
2024
30 JUNE
2023
Peter Burrows n/a 909,617
1
909,617
Stuart Bridges 243,263 230,782 182,007
Peter Durhager 11,923 – –
Alison Hill 156,097 146,861 116,511
David Shillson 184,401 175,165 159,069
(1) As at 31 March 2024, the date Mr Burrows retired from the Board
56 57
UIL Limited Report and Accounts for the year to 30 June 2024
SHARE PRICE TOTAL RETURN (pence)
from 30 June 2014 to 30 June 2024 (rebased to 100 as at 30 June 2014)
Source: ICM
20242022202120192018 20202017201620152014
UIL ordinary share price total return FTSE All-Share total return Index
50
100
150
200
250
300
2023
350
COMPANY PERFORMANCE
The graph below compares, for the ten years ended 30 June 2024, the ordinary share price total return (see
page 107) to the FTSE All-Share total return Index. The FTSE All-Share total return Index has been chosen since it
represents a comparable broad equity market index and it is used by the Company to compare its performance
against over the long term.
On behalf of the Board
Stuart Bridges
Chairman
8 October 2024
58 59
UIL Limited Report and Accounts for the year to 30 June 2024
As chairman of the Audit &
Risk Committee, I am pleased
to present the Committee’s
report to shareholders for the
year ended 30 June 2024.
ROLE AND RESPONSIBILITIES
UIL has established a
separately chaired Audit
& Risk Committee whose
duties include considering
and recommending to the
Board for approval the
contents of the half yearly and annual financial
statements and providing an opinion as to whether
the annual report and accounts, taken as a whole,
are fair, balanced and understandable and provide
the information necessary for shareholders to assess
the Company’s performance, business model and
strategy. The Committee also reviews the external
auditor’s report on the annual financial statements and
is responsible for reviewing and forming an opinion
on the effectiveness of the external audit process
and audit quality. Other duties include reviewing the
appropriateness of the Company’s accounting policies
and ensuring the adequacy of the internal control
systems and standards.
The Audit & Risk Committee meets at least three times
a year. Two of the planned meetings are held prior
to the Board meetings to review the half yearly and
annual results. Representatives of the Investment
Managers attend all meetings.
During the year the Audit & Risk Committee decided to
change the Company’s auditors from KPMG in the UK
to the KPMG team based in Bermuda, which is where
the Company’s registered office is located. Further
details are set out in Auditor and Audit Tenure below.
COMPOSITION
During the year ended 30 June 2024, the Audit & Risk
Committee consisted of all the independent Directors
of the Company. It is considered that there is a range of
recent and relevant financial experience amongst the
members of the Audit & Risk Committee together with
experience of the investment trust sector. In light of
the Chairman of the Board’s relevant financial services
experience, his continued independence and his
valued contributions in Committee meetings, the Audit
& Risk Committee considers it appropriate that he is a
member.
RESPONSIBILITIES AND REVIEW OF THE EXTERNAL
AUDIT
During the year the principal activities of the Audit &
Risk Committee included:
• considering and recommending to the Board for
approval the contents of the half yearly and annual
financial statements and reviewing the external
auditor’s report;
• management of the relationship with the external
auditor, including its appointment and the
evaluation of scope, execution, cost effectiveness,
independence and objectivity;
• reviewing and approving the external auditor’s
plan for the financial year, with a focus on
the identification of areas of audit risk, and
consideration of the appropriateness of the level
of audit materiality adopted;
• reviewing and recommending to the Board for
approval the audit and non-audit fees payable
to the external auditor and the terms of its
engagement;
• evaluation of reports received from the external
auditor with respect to the annual financial
statements and its review of the half-yearly report;
• reviewing the efficacy of the external audit process
and making a recommendation to the Board with
respect to the reappointment of the external
auditor;
• evaluation of the effectiveness of the internal
control and risk management systems including
reports received on the operational controls of the
Company’s service providers and reports from the
Company’s depositary;
• reviewing the appropriateness of the Company’s
accounting policies; and
• monitoring developments in accounting and
reporting requirements that impact on the
Company’s compliance with relevant statutory and
listing requirements.
AUDIT & RISK COMMITTEE REPORT
PETER DURHAGER
Chairman of the Audit
& Risk Committee
58 59
UIL Limited Report and Accounts for the year to 30 June 2024
SIGNIFICANT AREA HOW ADDRESSED
Value of level 3
investments
Investments that are classified as level 3 are valued using a variety of techniques to
determine a fair value, as set out in note 2(d) to the accounts. All such valuations are
carefully reviewed by the Audit & Risk Committee with the Investment Managers.
The Audit & Risk Committee receives detailed information on all level 3 investments and
it discusses and challenges the valuations with the Investment Managers. It considers
market comparables and discusses any proposed revaluations with the Investment
Managers.
AUDITOR AND AUDIT TENURE
In June 2024 the Audit & Risk Committee decided to
appoint KPMG Audit Limited (“KPMG”) as auditor of
the Company, replacing KPMG LLP which had been
appointed auditor in 2012 following a competitive
tender process. The Audit & Risk Committee decides
when it is appropriate to put the role of auditor out
to tender. The audit partner has rotated regularly. Mr
Bron Turner was appointed the lead audit partner in
2024 and his predecessor, John Waterson of KPMG LLP,
acted as audit partner since 2020. The Audit & Risk
Committee has considered the independence of the
auditor and the objectivity of the audit process and
is satisfied that KPMG has fulfilled its obligations to
shareholders as independent auditor to the Company.
It is the Company’s policy not to seek substantial
non-audit services from its auditor unless they relate
to a review of the half yearly report as the Board
considers the auditor is best placed to provide this
work. If the provision of significant non-audit services
were to be considered, the Committee would procure
such services from an accountancy firm other than
the auditor. Non-audit fees paid to KPMG LLP by the
Company amounted to £12,000 for the year ended
30 June 2024 (2023: £12,000) and related to certain
agreed procedures on the half yearly accounts.
The Committee has considered the threats to
independence from the provision of this service and
concluded that since appropriate safeguards exist
there is no impact to auditor independence.
The partner and manager of KPMG audit team
presented their audit plan to the Audit & Risk
Committee in advance of the financial year end. Items
of audit focus were discussed, agreed and given
particular attention during the audit process. KPMG
reported to the Audit & Risk Committee on these
items, their independence and other matters. This
report was considered by the Audit & Risk Committee
and discussed with KPMG and the Investment
Managers prior to approval of the annual financial
report.
Members of the Audit & Risk Committee meet in
camera with the external auditor at least annually.
ACCOUNTING MATTERS AND SIGNIFICANT AREAS
For the year ended 30 June 2024 the accounting
matters that were subject to specific consideration
by the Audit & Risk Committee and consultation with
KPMG where necessary were as follows:
The Audit & Risk Committee reviewed the external
audit plan at an early stage and concluded that the
appropriate areas of audit risk relevant to the Company
had been identified and that suitable audit procedures
had been put in place to obtain reasonable assurance
that the financial statements as a whole would be free
of material misstatements.
As a result, and following a thorough review process,
the Audit & Risk Committee advised the Board that
it is satisfied that, taken as a whole, the annual
financial report for the year ended 30 June 2024 is
fair, balanced, and understandable and provides the
information necessary for shareholders to assess the
Company’s performance, business model and strategy.
In reaching this conclusion, the Audit & Risk Committee
has assumed that the reader of the report would have
a reasonable level of knowledge of investments.
EXTERNAL AUDIT, REVIEW OF ITS EFFECTIVENESS AND
AUDITOR REAPPOINTMENT
The Audit & Risk Committee advises the Board on the
appointment of the external auditor, its remuneration
AUDIT & RISK COMMITTEE REPORT (continued)
60 61
UIL Limited Report and Accounts for the year to 30 June 2024
for audit and non-audit work and its cost effectiveness,
independence, and objectivity.
As part of the review of the effectiveness of the audit
process, a formal evaluation process incorporating
views from the members of the Audit & Risk
Committee and relevant personnel at the Investment
Managers is followed and feedback is provided to
KPMG. Areas covered by this review include:
• the calibre of the audit firm, including reputation
and industry presence;
• the extent of quality controls including review
processes, second director oversight and annual
reports from its regulator;
• the performance of the audit team, including
skills of individuals, specialist knowledge, partner
involvement, team member continuity and quality
and timeliness of audit planning and execution;
• audit communication including planning, relevant
accounting and regulatory developments,
approach to significant accounting risks,
communication of audit results and
recommendations on corporate reporting;
• ethical standards including independence and
integrity of the audit team, lines of communication
to the Audit & Risk Committee and partner
rotation; and
• reasonableness of the audit fees.
For the year ended 30 June 2024, the Audit & Risk
Committee is satisfied that the audit process was
effective.
Resolutions proposing the appointment of KPMG as
the Company’s auditor and authorising the Directors
to determine its remuneration will be put to the
shareholders at the forthcoming AGM.
INTERNAL CONTROLS AND RISK MANAGEMENT
UIL’s risk assessment focus and the way in which
significant risks are managed is a key area of focus
for the Audit & Risk Committee. Work here was
driven by the Audit & Risk Committee’s assessment
of the risks arising in the Company’s operations and
identification of the controls exercised by the Board
and its delegates, the Investment Managers, the
Administrator and other service providers. These
are recorded in risk matrices prepared by ICMIM
as the Company’s AIFM with responsibility for risk
management, which continue to serve as an effective
tool to highlight and monitor the principal risks, details
of which are provided in the Strategic Report. It also
received and considered, together with representatives
of the Investment Managers, reports in relation to
the operational controls of the Investment Managers,
Administrator and Custodian. These reviews identified
no issues of significance.
WHISTLEBLOWING POLICY
The Committee has also reviewed and accepted the
‘whistleblowing’ policy that has been put in place by
the Investment Managers under which their staff,
in confidence, can raise concerns about possible
improprieties in matters of financial reporting or other
matters, in so far as they affect the Company.
INTERNAL AUDIT
Due to the nature of the Company, being an externally
managed investment company with no executive
employees, the Company does not have its own
internal audit function. The Committee and the Board
have concluded that there is no current need for such
a function, based on the satisfactory operation of
controls within the Company’s service providers.
Peter Durhager
Chairman of the Audit & Risk Committee
8 October 2024
61
Report and Accounts for the year to 30 June 2024
60 61
UIL Limited Report and Accounts for the year to 30 June 2024
The Directors are responsible for preparing the Annual
Report and the Group and parent Company Accounts in
accordance with applicable law and regulations.
The Directors are required to prepare Group and parent
Company financial statements for each financial year. They
have elected to prepare the Group financial statements in
accordance with IFRS Accounting Standards and applicable
law and have elected to prepare the parent Company financial
statements on the same basis.
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 Group and parent Company and
of their profit or loss for that period. In preparing each of
the Group and parent Company financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance
with applicable accounting standards;
• assess the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent
Company or to cease operations or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 1981 of Bermuda.
They are responsible for such internal controls as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
The Directors have decided to prepare voluntarily a Directors’
Remuneration Report in accordance with Schedule 8 to
The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 made under the
UK Companies Act 2006, as if those requirements applied
to the Company. The Directors have also decided to prepare
voluntarily a Corporate Governance Statement under the UK
Corporate Governance Code as if the Company were required
to comply with the Listing Rules of the Financial Conduct
Authority applicable to UK companies admitted to listing in
the closed-ended investment funds category of the Official
List.
In accordance with Disclosure Guidance and Transparency
Rule 4.1.15R, the financial statements will form part of the
annual financial report prepared using the single electronic
reporting format under the TD ESEF Regulation. The auditor’s
report on these financial statements provides no assurance
over the ESEF format.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK and Bermuda
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN
RESPECT OF THE ANNUAL FINANCIAL REPORT
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
• the Strategic Report and Directors’ Report include a
fair review of the development and performance of
the business and the position of the Company, and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face.
We consider the annual report and accounts, taken as a
whole, is fair, balanced, and understandable and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
Approved by the Board and signed on its behalf by:
Stuart Bridges
Chairman
8 October 2024
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
in respect of the Annual Report and Financial Statements
62
KPMG Audit Limited
Crown House
4 Par
-la-Ville Road
Hamilton
HM 08
Bermuda
Telephone
Fax
Internet
+1 441 295 5063
+1 441 295 9132
www.kpmg.bm
© 2024 KPMG Audit Limited, a Bermuda limited liability company and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee. All rights reserved.
Independent Auditor’s Report
To the Shareholders and Board of Directors of UIL Limited
Opinion
We have audited the financial statements of UIL Limited (“the Company”), and of the Group, of which the Company is the
parent, which comprise of the statement of financial position as at 30 June 2024, the income statement, statements of
changes in equity and cash flows of the Company and the Group for the year then ended, and notes, comprising material
accounting policies and other explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the
Company and the Group as at 30 June 2024, and their financial performance and their cash flows for the year then
ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS
Accounting Standards).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 and the Group in accordance with International Ethics Standards Board for
Accountants International Code of Ethics for Professional Accountants (including international independence Standards)
(IESBA code) together with the ethical requirements that are relevant to our audit of the financial statements in Bermuda,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. The key audit 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.
Valuation of unlisted investments (Level 3)
As presented in the Material Accounting Policies in Note 2, and in Notes 10 and 29 (d) to the financial statements, the
unlisted investments totaling £146.281m (2023: £172.652m) representing 60.4% and 61.3% (2023: 55.4% and 56.0%) of
the investments of the Company and the Group, respectively, are subject to estimation uncertainty. The valuations of
these investments are complex and require the application of judgment by the Investment Managers.
Unlisted investments are measured at fair value, which is determined by reference to the International Private Equity and
Venture Capital Valuation (IPEV) Guidelines and IFRS 13 by using measurements of value such as prices of recent
orderly transactions, milestone analysis, revenue multiples and valuing interests by reference to their reported Net Asset
Value (NAV).
The valuation of the unlisted investments is the key driver of the Company and the Group’s net asset value and total
return to shareholders for the Company and the Group.
© 2024 KPMG Audit Limited, a Bermuda limited liability company and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee. All rights reserved.
kpmg
The risk
The significance of the unlisted investments to the financial statements for the Company and the Group, combined with
the judgment required in estimating their fair values, means this was an area of focus during our audit.
Our response to the risk
In responding to the key audit matter, we performed the following audit procedures:
Read the minutes of the Board and the Audit & Risk Committee meetings held during the year to understand and
confirm the oversight and challenge of these committees relating to the valuations of unlisted investments.
For holdings in unlisted investments where NAV approximates fair value with a value of £9.6m:
Considered the valuation technique applied for appropriateness.
Obtained external confirmation of the net asset value directly with the underlying funds' administrators or investment
managers.
Obtained the latest audited financial statements of the unlisted investments in order to consider: the nature of the
underlying investments; the financial reporting standards applied in the preparation of these financial statements;
any modifications to the audit report; and any other disclosures that may be relevant to their valuation.
Compared the net asset value to the audited financial statements as at the reporting date.
For unlisted investments with non-coterminous financial year ends, including those which are not audited, where NAV
approximates fair value with a value of £127.9m:
Obtained independent confirmations of the existence of the unlisted investments from third parties.
Conducted procedures to confirm the appropriateness of the qualifications, independence and expertise of the
valuation specialists engaged by the investee companies.
Tested the mathematical accuracy of the valuation models.
Engaged KPMG valuation specialists to:
‒ challenge the appropriateness of the valuation methodology selected for a selected representative sample of
investments,
‒ corroborate and challenge key assumptions and judgments within the Investment Managers' valuations models,
such as discount factors and the choice of benchmark for earnings multiples for investments held directly
through holding companies for a selected representative sample of investments.
Where a recent transaction has been used to value a holding, we obtained an understanding of the circumstances
surrounding the transaction and whether it was considered to be suitable as an input into the valuation.
Compared the underlying financial data inputs to external sources, investee company audited accounts and
management information as applicable. A retrospective review of prior period audited accounts, in comparison to
prior period management accounts, was also undertaken to assess the accuracy of information provided.
Agreed the data inputs in the valuation models to supporting information received from investee companies and that
provided by the Investment Managers.
For other unlisted investments with a value of £7.62m:
Obtained independent confirmations of the existence of the unlisted investment from third parties.
Tested mathematical accuracy of the valuation models.
Engaged KPMG specialists to:
‒ challenge the appropriateness of the valuation methodology selected,
‒ corroborate and challenge key assumptions and judgments included within the Investment Manager's valuations
models, such as discount factors for a selected representative sample of investments.
Evaluated the validity of assumptions made and the expected timing and magnitude of future cash flows.
Where a recent transaction has been used to value a holding, we obtained an understanding of the circumstances
surrounding the transaction and whether it was considered to be suitable as an input into the valuation.
63
© 2024 KPMG Audit Limited, a Bermuda limited liability company and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee. All rights reserved.
kpmg
We have considered the adequacy of disclosures about the degree of estimation and sensitivity to key assumptions.
We have also monitored any events that emerged in the post balance sheet period (up to the date of approval of the
financial statements for the Company and Group) that would have a potential impact on the value of the unlisted
instruments held at year end.
Other matter
The financial statements as at and for the year ended 30 June 2023 were audited by another auditor who expressed an
unmodified opinion on those statements on 22 September 2023.
Other information
Management is responsible for the other information. The other information comprises the Strategic report and
Governance sections, 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 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, 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. We have nothing to report in
this regard.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS
Accounting Standards, and for such internal control as management determines 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, management is responsible for assessing the ability of the Company and the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company and Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process.
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 auditors’ 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 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.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
64
kpmg
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
internal controls for the Company and the Group.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the ability of the Company and the Group to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company and/or Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The purpose of our audit work and to whom we owe our responsibilities
The report is made solely to the Shareholders and Board of Directors for the Company and the Group. Our audit work
has been undertaken so that we might state to the Shareholders and Board of Directors for the Company and the Group
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 Shareholders and Board of
Directors, as a body, for our audit work, for this report, or for the opinion we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Bron Turner.
Chartered Professional Accountants
Hamilton, Bermuda
8 October 2024
© 2024 KPMG Audit Limited, a Bermuda limited liability company and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a
private English company limited by guar
antee. All rights reserved.
65
66 67
UIL Limited Report and Accounts for the year to 30 June 2024
for the year to 30 June | 2024 | 2023 | ||||
| Notes | Revenue | Capital | Total | Revenue | Capital | Total |
| return | return | return | return | return | return | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
10 Losses on investments | ( | ( | ( | ( | ||
13 Losses on derivative financial instruments | ( | ( | ( | ( | ||
Foreign exchange losses | ( | ( | ( | ( | ||
3 Investment and other income | ||||||
Total income/(loss) | ( | ( | ( | ( | ||
4 Management and administration fees | ( | ( | ( | ( | ||
5 Other expenses | ( | ( | ( | ( | ( | ( |
Profit/(loss) before finance costs and taxation | ( | ( | ( | ( | ||
6 Finance costs | ( | ( | ( | ( | ( | ( |
Profit/(loss) before taxation | ( | ( | ( | ( | ||
7 Taxation | ||||||
Profit/(loss) for the year | ( | ( | ( | ( | ||
8 Earnings per ordinary share – pence | ( | ( | ( | ( |
The Group does not have any income or expense that is not included in the profit/(loss) for the year and therefore the profit/(loss) for the year is also
the total comprehensive income for the year, as defined in International Accounting Standard 1 (revised).
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the Company. There are no minority interests.
The notes on pages 72 to 99 form part of these financial statements.
GROUP INCOME STATEMENT
66 67
UIL Limited Report and Accounts for the year to 30 June 2024
Notes
for the year to 30 June 2024 2023
Revenue
return
£’000s
Capital
return
£’000s
Total
return
£’000s
Revenue
return
£’000s
Capital
return
£’000s
Total
return
£’000s
10
Losses on investments – (28,131) (28,131) – (40,411) (40,411)
13
Losses on derivative financial instruments – (35) (35) – (2,038) (2,038)
Foreign exchange losses – (73) (73) – (1,604) (1,604)
3
Investment and other income 12,227 – 12,227 10,229 – 10,229
Total income/(loss) 12,227 (28,239) (16,012) 10,229 (44,053) (33,824)
4
Management and administration fees (565) – (565) (758) – (758)
5
Other expenses (906) (2) (908) (977) (5) (982)
Profit/(loss) before finance costs and
taxation 10,756 (28,241) (17,485) 8,494 (44,058) (35,564)
6
Finance costs (2,242) (5,393) (7,635) (2,897) (6,260) (9,157)
Profit/(loss) before taxation 8,514 (33,634) (25,120) 5,597 (50,318) (44,721)
7
Taxation – – – – – –
Profit/(loss) for the year 8,514 (33,634) (25,120) 5,597 (50,318) (44,721)
8
Earnings per ordinary share – pence 10.15 (40.11) (29.96) 6.68 (60.02) (53.34)
The Company does not have any income or expense that is not included in the profit/(loss) for the year and therefore the profit/(loss) for the year is
also the total comprehensive income for the year, as defined in International Accounting Standard 1 (revised).
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the Company.
The notes on pages 72 to 99 form part of these financial statements.
COMPANY INCOME STATEMENT
68 69
UIL Limited Report and Accounts for the year to 30 June 2024
| for the year to 30 June 2024 | ||||||
| Notes | Ordinary | Share | ||||
| share | premium | Special | Capital | Revenue | ||
| capital | account | reserve | reserves | reserve | Total | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
Balance as at 30 June 2023 | ( | |||||
(Loss)/profit for the year | ( | ( | ||||
9 Ordinary dividends paid | ( | ( | ||||
Balance as at 30 June 2024 | ( | |||||
| for the year to 30 June 2023 | ||||||
| Notes | Ordinary | Share | ||||
| share | premium | Special | Capital | Revenue | ||
| capital | account | reserve | reserves | reserve | Total | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
Balance as at 30 June 2022 | ( | |||||
(Loss)/profit for the year | ( | ( | ||||
9 Ordinary dividends paid | ( | ( | ||||
Balance as at 30 June 2023 | ( |
The notes on pages 72 to 99 form part of these financial statements.
GROUP STATEMENT OF CHANGES IN EQUITY
68 69
UIL Limited Report and Accounts for the year to 30 June 2024
for the year to 30 June 2024
Notes
Ordinary
share
capital
£’000s
Share
premium
account
£’000s
Special
reserve
£’000s
Capital
reserves
£’000s
Revenue
reserve
£’000s
Total
£’000s
Balance as at 30 June 2023 8,384 37,874 233,866 (124,781) 11,735 167,078
(Loss)/profit for the year – – – (33,634) 8,514 (25,120)
9
Ordinary dividends paid – – – – (5,031) (5,031)
Balance as at 30 June 2024 8,384 37,874 233,866 (158,415) 15,218 136,927
for the year to 30 June 2023
Notes
Ordinary
share
capital
£’000s
Share
premium
account
£’000s
Special
reserve
£’000s
Capital
reserves
£’000s
Revenue
reserve
£’000s
Total
£’000s
Balance as at 30 June 2022 8,384 37,874 233,866 (74,463) 12,846 218,507
(Loss)/profit for the year – – – (50,318) 5,597 (44,721)
9
Ordinary dividends paid – – – – (6,708) (6,708)
Balance as at 30 June 2023 8,384 37,874 233,866 (124,781) 11,735 167,078
The notes on pages 72 to 99 form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
70 71
UIL Limited Report and Accounts for the year to 30 June 2024
Group | Company | |||
Notes as at 30 June | 2024 | 2023 | 2024 | 2023 |
| £’000s | £’000s | £’000s | £’000s | |
| Non-current assets | ||||
10 Investments | 242,033 | 311,477 | ||
| Current assets | ||||
12 Other receivables | 296 | 62 | ||
13 Derivative financial instruments | – | 110 | ||
Cash and cash equivalents | 1,485 | 5,234 | ||
1,781 | 5,406 | |||
| Current liabilities | ||||
14 Loans | ( | ( | (2,850) | (42,691) |
15 Other payables | ( | ( | (41,200) | (8,892) |
16 Zero dividend preference shares | ( | – | – | |
( | ( | (44,050) | (51,583) | |
Net current liabilities | ( | ( | (42,269) | (46,177) |
Total assets less current liabilities | 199,764 | 265,300 | ||
| Non-current liabilities | ||||
17 Other payables | (62,837) | (98,222) | ||
16 Zero dividend preference shares | ( | ( | – | – |
Net assets | 136,927 | 167,078 | ||
| Equity attributable to equity holders | ||||
18 Ordinary share capital | 8,384 | 8,384 | ||
19 Share premium account | 37,874 | 37,874 | ||
20 Special reserve | 233,866 | 233,866 | ||
21 Capital reserves | ( | ( | (158,415) | (124,781) |
22 Revenue reserve | 15,218 | 11,735 | ||
Total attributable to equity holders | 136,927 | 167,078 | ||
23 Net asset value per ordinary share – pence | 163.31 | 199.27 |
The notes on pages 72 to 99 form part of these financial statements.
UIL Limited
Registered in Bermuda, No 39480
STATEMENTS OF FINANCIAL POSITION
70 71
UIL Limited Report and Accounts for the year to 30 June 2024
Group | Company | |||
for the year to 30 June | 2024 | 2023 | 2024 | 2023 |
| £’000s | £’000s | £’000s | £’000s | |
Loss before taxation | ( | ( | (25,120) | (44,721) |
Deduct investment income - dividends | ( | ( | (11,869) | (9,904) |
Deduct investment income - interest | ( | ( | (348) | (320) |
Deduct bank interest | ( | ( | (10) | (5) |
Add back bank interest charged | 2,242 | 2,897 | ||
Add back losses on investments | 28,131 | 40,411 | ||
Add back losses on derivative financial instruments | 35 | 2,038 | ||
Add back foreign exchange losses | 73 | 1,604 | ||
Increase in other debtors | ( | ( | (2) | (10) |
Decrease in creditors | ( | ( | (6) | (60) |
Add back ZDP shares finance costs | – | – | ||
Add back intra-group loan account finance costs | 5,393 | 6,260 | ||
Net cash outflow from operating activities before dividends and interest | ( | ( | (1,481) | (1,810) |
| Dividends received | 11,869 | 3,580 | ||
Investment income - interest received | 117 | 166 | ||
Bank interest received | 10 | 5 | ||
Interest paid | ( | ( | (2,836) | (2,375) |
Taxation paid | – | – | ||
Cash flows from operating activities | ( | 7,679 | (434) | |
| Investing activities: | ||||
Purchases of investments | ( | ( | (10,130) | (17,588) |
Sales of investments | 48,071 | 92,285 | ||
Net settlement of derivatives | ( | 75 | (4,090) | |
Cash flows from investing activities | 38,016 | 70,607 | ||
| Financing activities: | ||||
Equity dividends paid | ( | ( | (5,031) | (6,708) |
Drawdowns of bank loans | 9,814 | 55,231 | ||
Repayment of bank loans | ( | ( | (46,336) | (66,070) |
Cash flows from redemption of ZDP shares | ( | – | – | |
Cash flows from repayment of intra-group loan account | – | (52,283) | ||
Cash flows from financing activities | ( | ( | (41,553) | (69,830) |
Net increase in cash and cash equivalents | 4,142 | 343 | ||
Cash and cash equivalents at the beginning of the year | ( | ( | (2,638) | (3,827) |
Effect of movement in foreign exchange | ( | (19) | 846 | |
Cash and cash equivalents at the end of the year | ( | 1,485 | (2,638) | |
| Comprised of: | ||||
Cash | 1,485 | 5,234 | ||
Bank overdraft | ( | – | (7,872) | |
Total | ( | 1,485 | (2,638) |
The notes on pages 72 to 99 form part of these financial statements.
STATEMENTS OF CASH FLOWS
72 73
UIL Limited Report and Accounts for the year to 30 June 2024
72 73
UIL Limited Report and Accounts for the year to 30 June 2024
NOTES TO THE ACCOUNTS
1. GENERAL INFORMATION
The Company, UIL Limited , is an investment company incorporated in Bermuda , with its ordinary shares traded on the Specialist
Fund Segment of the Main Market of the London Stock Exchange and listed on the Bermuda Stock Exchange. The Company
commenced trading on 20 June 2007.
The Group Accounts comprise the results of the Company and UIL Finance Limited (“UIL Finance”).
2. MATERIAL ACCOUNTING POLICIES
72 73
UIL Limited Report and Accounts for the year to 30 June 2024
72 73
UIL Limited Report and Accounts for the year to 30 June 2024
NOTES TO THE ACCOUNTS
(continued)
74 75
UIL Limited Report and Accounts for the year to 30 June 2024
74 75
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Group and Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Investment income: | ||||||
Dividends * | 11,869 | – | 11,869 | 9,904 | – | 9,904 |
Interest * | 348 | – | 348 | 320 | – | 320 |
12,217 | – | 12,217 | 10,224 | – | 10,224 | |
| Other income: | ||||||
Interest on cash and short-term deposits | 10 | – | 10 | 5 | – | 5 |
Total income | 12,227 | – | 12,227 | 10,229 | – | 10,229 |
2024 | 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Group and Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Payable to: | ||||||
ICM/ICMIM – management fee and secretarial fees | 401 | – | 401 | 557 | – | 557 |
Administration fees | 164 | – | 164 | 201 | – | 201 |
565 | – | 565 | 758 | – | 758 |
NOTES TO THE ACCOUNTS
(continued)
76 77
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Group and Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Auditor’s remuneration (see note 5A) | 225 | – | 225 | 182 | – | 182 |
Broker and consultancy fees | 43 | – | 43 | 41 | – | 41 |
Custody fees | 15 | – | 15 | 15 | – | 15 |
| Directors’ fees for services to the Company | ||||||
| (see Directors’ Remuneration Report on pages | ||||||
55 to 57) | 180 | – | 180 | 206 | – | 206 |
Travel expenses | 49 | – | 49 | 74 | – | 74 |
Professional and legal fees | 133 | – | 133 | 194 | – | 194 |
Sundry expenses | 261 | 2 | 263 | 265 | 5 | 270 |
906 | 2 | 908 | 977 | 5 | 982 |
| Group Auditor – KPMG Audit Limited (2023: KPMG LLP) | 2024 | 2023 |
| Group and Company Annual Audit Fees | £’000s | £’000s |
Audit of the Group and Company’s annual financial statements | 180 | 150 |
Additional audit costs for the prior year | 33 | 20 |
Other non-audit services – agreed procedures on interim financial statements | 12 | 12 |
Total auditor’s remuneration for the year | 225 | 182 |
76 77
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Group | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Loans and bank overdrafts | 2,242 | – | 2,242 | 2,897 | – | 2,897 |
ZDP shares (see note 16) | – | 5,207 | 5,207 | – | 6,059 | 6,059 |
2,242 | 5,207 | 7,449 | 2,897 | 6,059 | 8,956 |
7. TAXATION
2024 | 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Group and Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Overseas taxation | – | – | – | – | – | – |
Except as stated above, profits of the Company and UIL Finance for the year (and 2023) are not subject to any taxation within their
countries of residence. The Company is not in scope for Bermuda Income Tax Act 2023.
The Company is subject to tax in Australia on taxable Australian property.
As at 30 June 2024, the Company had total Australian unutilised tax losses of £5,069,000. Only future taxable capital gains on
Australian property can be utilized against these available capital losses. A deferred tax asset has not been recognised in respect
of these Australian tax losses because the Company is not expected to generate any taxable future gains on Australian property
and, accordingly, it is unlikely that the Company will be able to reduce future Australian tax liabilities through the use of the
existing loss.
8. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share from continuing operations is based on the following data:
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £’000s | £’000s | £’000s | £’000s | |
Revenue | 8,514 | 5,597 | 8,514 | 5,597 |
Capital | (33,529) | (50,048) | (33,634) | (50,318) |
Total | (25,015) | (44,451) | (25,120) | (44,721) |
Number | Number | Number | Number | |
| Weighted average number of shares in issue during the year for earnings | ||||
per share calculations | 83,842,918 | 83,842,918 | 83,842,918 | 83,842,918 |
Pence | Pence | Pence | Pence | |
Revenue return per share | 10.15 | 6.68 | 10.15 | 6.68 |
Capital return per share | (39.99) | (59.70) | (40.11) | (60.02) |
Total loss per share | (29.84) | (53.02) | (29.96) | (53.34) |
NOTES TO THE ACCOUNTS
(continued)
78 79
UIL Limited Report and Accounts for the year to 30 June 2024
9. DIVIDENDS
| Record | Payment | 2024 | 2023 | ||
| Group and Company | date | date | £’000s | £’000s | |
2022 | Fourth quarterly of 2.000p | 2-Sep-22 | 30-Sep-22 | – | 1,677 |
2023 | First quarterly of 2.000p | 2-Dec-22 | 22-Dec-22 | – | 1,677 |
2023 | Second quarterly of 2.000p | 3-Mar-23 | 31-Mar-23 | – | 1,677 |
2023 | Third quarterly of 2.000p | 2-Jun-23 | 26-Jun-23 | – | 1,677 |
2023 | Fourth quarterly of 2.000p | 29-Sep-23 | 13-Oct-23 | 1,677 | – |
2024 | First quarterly of 2.000p | 1-Dec-23 | 21-Dec-23 | 1,677 | – |
2024 | Second quarterly of 2.000p | 10-May-24 | 23-May-24 | 1,677 | – |
5,031 | 6,708 |
The Directors declared a third quarterly dividend in respect of the year ended 30 June 2024 of 2.00p per share, paid on 31 July 2024
to all ordinary shareholders on the register at close of business on 5 July 2024. The total cost of the dividend, which has not been
accrued in the results for the year to 30 June 2024, is £1,677,000 based on 83,842,918 ordinary shares in issue. The Directors declared
a fourth quarterly dividend in respect of the year ended 30 June 2024 of 2.0 0 p per share payable on 8 November 2024 to all ordinary
shareholders on the register at close of business on 27 September 2024. The total cost of the dividend, which has not been accrued in
the results for the year to 30 June 2024, is £1,675,000 based on 83,755,585 ordinary shares in issue.
2024 | 2023 | |||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Group | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Investments brought forward | ||||||||
Cost | 76,016 | 110,503 | 168,186 | 354,705 | 207,332 | 11,365 | 199,073 | 417,770 |
(Losses)/gains | (12,901) | (37,923) | 4,466 | (46,358) | (34,126) | (6,976) | 39,848 | (1,254) |
Valuation | 63,115 | 72,580 | 172,652 | 308,347 | 173,206 | 4,389 | 238,921 | 416,516 |
| Movements in the year: | ||||||||
Transfer between levels 1 | – | – | – | – | (66,496) | 66,496 | – | – |
Purchases at cost | 524 | – | 10,597 | 11,121 | 33,098 | 19,796 | 67,701 | 120,595 |
Sale proceeds | (20,473) | (4,722) | (27,239) | (52,434) | (63,074) | (41) | (125,307) | (188,422) |
Losses on investments | (3,759) | (14,724) | (9,729) | (28,212) | (13,619) | (18,060) | (8,663) | (40,342) |
Valuation at 30 June | 39,407 | 53,134 | 146,281 | 238,822 | 63,115 | 72,580 | 172,652 | 308,347 |
| Analysed at 30 June | ||||||||
Cost | 61,011 | 104,598 | 146,284 | 311,893 | 76,016 | 110,503 | 168,186 | 354,705 |
(Losses)/gains | (21,604) | (51,464) | (3) | (73,071) | (12,901) | (37,923) | 4,466 | (46,358) |
Valuation | 39,407 | 53,134 | 146,281 | 238,822 | 63,115 | 72,580 | 172,652 | 308,347 |
78 79
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Investments brought forward | ||||||||
Cost | 76,016 | 113,440 | 168,186 | 357,642 | 209,685 | 11,949 | 199,073 | 420,707 |
(Losses)/gains | (12,901) | (37,730) | 4,466 | (46,165) | (33,846) | (6,994) | 39,848 | (992) |
63,115 | 75,710 | 172,652 | 311,477 | 175,839 | 4,955 | 238,921 | 419,715 | |
| Movements in the year: | ||||||||
Transfer between levels 2 | 543 | (543) | – | – | (69,129) | 69,129 | – | – |
Purchases at cost | 524 | – | 10,597 | 11,121 | 33,098 | 19,796 | 67,701 | 120,595 |
Sale proceeds | (20,473) | (4,722) | (27,239) | (52,434) | (63,074) | (41) | (125,307) | (188,422) |
Losses on investments | (3,747) | (14,655) | (9,729) | (28,131) | (13,619) | (18,129) | (8,663) | (40,411) |
Valuation at 30 June | 39,962 | 55,790 | 146,281 | 242,033 | 63,115 | 75,710 | 172,652 | 311,477 |
| Analysed at 30 June | ||||||||
Cost | 61,595 | 106,951 | 146,284 | 314,830 | 76,016 | 113,440 | 168,186 | 357,642 |
(Losses)/gains | (21,633) | (51,161) | (3) | (72,797) | (12,901) | (37,730) | 4,466 | (46,165) |
Valuation | 39,962 | 55,790 | 146,281 | 242,033 | 63,115 | 75,710 | 172,652 | 311,477 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| (Losses)/gains on investments held at fair value | £’000s | £’000s | £’000s | £’000s |
(Losses)/gains on investments sold | (1,499) | 4,762 | (1,499) | 4,762 |
Losses on investments held | (26,713) | (45,104) | (26,632) | (45,173) |
Total losses on investments | (28,212) | (40,342) | (28,131) | (40,411) |
NOTES TO THE ACCOUNTS
(continued)
80 81
UIL Limited Report and Accounts for the year to 30 June 2024
| Carrying value at the | |||
| end of the previous | |||
| Proceeds | Cost | accounting period | |
| 2024 | £’000s | £’000s | £’000s |
Permanent Investments Limited (see transactions with Somers Limited ("Somers") on page 82) | 4,701 | – | – + |
Somers (partial sale) | 4,310 | 2,633 | 3,133 |
| Carrying value at the | |||
| end of the previous | |||
| Proceeds | Cost | accounting period | |
| 2023 | £’000s | £’000s | £’000s |
ICM Mobility Group Limited ("ICM Mobility") | 43,572 | 29,108 | 43,879 |
Snapper Services (UK) Limited | 1,542 | 2,393 | 1,656 |
| Country of | 2024 | 2023 | |||
| registration | Number of | Holding and | Number of | Holding and | |
| and | ordinary | voting rights | ordinary | voting rights | |
| incorporation | shares held | % | shares held | % | |
Allectus Capital Limited (“Allectus Capital”) | Bermuda | 100 | 50 | 100 | 50 |
| Allectus Quantum Holdings Limited | |||||
(“Allectus Quantum”) | United Kingdom | 503 | 50 | 503 | 50 |
Allectus Capital | Pursuant to a loan agreement dated 1 September 2016 under which UIL agreed to loan monies to Allectus |
| Capital, UIL advanced to Allectus Capital a loan of USD 1.1m. The balance of the loan as at 30 June 2024 | |
| was USD 3.2m (30 June 2023: USD 2.1m). The loan is interest free and repayable on twelve months notice | |
| given by UIL. | |
Allectus Quantum | UIL paid fees of £28k incurred by Allectus Quantum. |
Nature and purpose | Interest held | |
Allectus Capital | Investment company investing in listed and unlisted Technology | Ordinary shares and loans |
| focused investments | ||
Allectus Quantum | Investment company investing in listed and unlisted quantum | Ordinary shares |
| computing focused investments |
80 81
UIL Limited Report and Accounts for the year to 30 June 2024
30 June | 2024 | 2023 | ||||
| Carrying amount | Carrying amount | |||||
| included in non- | included in non- | |||||
| Number of | Total net | pledged financial | Number | Total net | pledged financial | |
| investee | assets | assets at fair value | of investee | assets | assets at fair value | |
| companies | £'000s | £'000s | companies | £'000s | £'000s | |
| Investments in Allectus Capital | ||||||
| and Allectus Quantum | ||||||
Equity/loans | 27 | 26,838 | 26,838 | 25 | 32,487 | 32,487 |
| Country of | Number of | 2024 | 2023 | |
| registration and | ordinary shares | % of ordinary | % of ordinary | |
| incorporation | held | shares held | shares held | |
Carebook Technologies Inc ("Carebook") | Canada | 48,546,167 | 47.3 | 53.8 1 |
DTI Group Ltd (“DTI”) | Australia | 103,193,989 | 23.0 | 23.0 |
Littlepay Mobility Ltd (“Littlepay”) | United Kingdom | – | – | 30.2 |
Novareum Blockchain Asset Fund Ltd ("Novareum") | Cayman Islands | 16,942² | 20.3² | 33.4 |
Orbital Corporation Limited (“Orbital”) | Australia | 42,224,205 3 | 28.9 | 29.9 |
Resimac Group Limited (“Resimac”) | Australia | 124,446,591 4 | 31.1 | 31.6 |
Serkel Solutions Pty Ltd (“Serkel”) | Australia | 10,510 | 33.3 | 33.3 |
SmileStyler Solutions Pty Ltd (“SmileStyler”) | Australia | 1,151,434 | 24.0 | 24.0 |
Somers | Bermuda | 9,866,931 | 40.4 | 41.7 |
SportEngaged Ltd | UK | 25 | 20.0 | 20.0 |
The Market Limited | Australia | 75,605,734 | 23.6 | 23.6 |
Carebook | Pursuant to a loan agreement dated 22 December 2021, the balance of the loan and interest |
| outstanding as at 30 June 2024 was CAD 1.0m (2023: CAD 1.0m). UIL received interest of CAD 0.1m | |
| in the year. | |
| Pursuant to a loan agreement dated 15 December 2022, the balance of the loan and interest | |
| outstanding as at 30 June 2024 was CAD 1.5m (2023: CAD 1.3m). | |
| Pursuant to a convertible loan agreement dated 5 December 2023, under which UIL has agreed to | |
| loan monies to Carebook, UIL advanced to Carebook a loan of CAD 2.0m. As at 30 June 2024, the | |
| balance of the loan and interest outstanding is CAD 2.2m. | |
| All three loans bear interest at an annual rate of the Canadian variable rate +10.0% and are | |
| repayable by 22 December 2026. | |
DTI | There were no transactions during the year. |
Littlepay | See Somers transactions. |
NOTES TO THE ACCOUNTS
(continued)
82 83
UIL Limited Report and Accounts for the year to 30 June 2024
Novareum | UIL redeemed 11,419 units at the NAV price on 30 April 2024, receiving £2.0m. |
Orbital | In September 2023, UIL committed to take part in Orbital’s AUD 4m share placement at AUD 0.14 |
| per share, agreeing to subscribe for 25% of the shares offered at a cost of AUD 1.0m. This was | |
| subject to shareholder approval and the purchase completed in November after approval was | |
| received. UIL received 7,142,857 shares. | |
Resimac | There were no transactions during the year. |
Serkel | There were no transactions during the year. |
SmileStyler | There were no transactions during the year. |
Somers | Pursuant to loan agreements dated 1 September 2016 (USD loan), 5 September 2019 (AUD loan) |
| and 22 June 2018 (GBP loan), under which UIL agreed to loan monies to Somers, in the year UIL | |
| advanced to Somers loans of USD 5.0m, AUD 1.2m and £1.9m, UIL received interest of USD 17k, | |
| AUD 4k and £25k and received from Somers repayments of USD 5.0m, AUD 1.2m and £1.9m. As at | |
| 30 June 2024, the balance of the loans outstanding were USD nil, AUD nil and £ nil. The loans bear | |
| interest at an annual rate of 6.0% and are repayable on not less than 12 months’ notice. | |
| In October 2023, UIL purchased 149 shares in Permanent Investment Limited (“PIL”) for USD 1 from | |
| Prime Life Common Fund Limited, holding 100% of the shares. The holding of Littlepay was gifted | |
| into PIL. Subsequently Somers purchased UIL’s holding in PIL at fair value for £4.7m. | |
SportEngaged Ltd | There were no transactions during the year. |
The Market Limited | There were no transactions during the year. |
| 2024 | 2023 | |||
| Country of | % of class of | % of class of | ||
| registration | Class of | instrument | instrument | |
| Undertaking | and incorporation | instrument held | held | held |
Utilico Emerging Markets Trust plc | United Kingdom | Ordinary Shares | 4.9 | 9.1 |
WT Financial Group Limited | Australia | Ordinary Shares | 18.5 | 18.5 |
| Country of operation, | Holding and | ||
| registration and | voting | ||
incorporation | Number and class of shares held | rights % | |
UIL Finance Limited | Bermuda | 10 ordinary shares of 10p nil paid share | 100 |
82 83
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | ||||
| Country of | Number of | Holding and | Number of | Holding and | |
| registration | ordinary | voting rights | ordinary | voting rights | |
| and incorporation | shares held | % | shares held | % | |
Coldharbour Technology Limited (“Coldharbour”) | United Kingdom | 29,660,694 | 96.5 | 29,660,694 | 96.5 |
Energy Holdings Ltd | Bermuda | 100 | 100.0 | 100 | 100.0 |
Newtel Holdings Limited (“Newtel”) | Jersey | – | – | 7,453,957 | 100.0 |
Northbrook Resources Ltd | United Kingdom | 44,348,478 1 | 51.0 | 44,348,478 1 | 51.0 |
West Hamilton Holdings Limited (“West Hamilton”) | Bermuda | 1,659,390 | 57.0 | 1,659,390 | 57.0 |
Zeta Resources Limited (“Zeta”) | Bermuda | 316,441,093 | 59.7 | 344,573,832 | 61.2 |
Coldharbour | There were no transactions during the year. |
Energy Holdings Ltd | UIL paid fees of £0.1m incurred by Energy Holdings Ltd. |
Newtel | Pursuant to a loan agreement dated 28 January 2020, under which UIL agreed to loan monies to |
| Newtel, UIL advanced to Newtel £0.2m. The loan was converted to equity and in April 2024 the | |
| equity shares were sold to the CEO of Newtel for nil proceeds. As at 30 June 2024, the balance of | |
| the loan was £nil (2023: £nil). | |
Northbrook Resources Ltd | Pursuant to a loan agreement dated 1 January 2019 under which UIL agreed to loan monies to |
| Northbrook, the outstanding loan balance of £1.6m brought forward was re-assigned to SKAC Ltd | |
| at nil proceeds, as part of an ongoing process to liquidate Northbrook. Interest was charged on the | |
| loan at 6.0% per annum. UIL paid fees of £33k incurred by Northbrook as part of the liquidation | |
| process. | |
West Hamilton | West Hamilton made a capital distribution of £8.3m and a dividend distribution of £0.7m to UIL |
| during the year. | |
Zeta | Pursuant to a loan agreement dated 28 July 2023, under which Zeta Energy Pte Ltd (a 100% |
| subsidiary of Zeta) agreed to loan monies to UIL, Zeta Energy Pte Ltd advanced to UIL AUD 13.5m | |
| in the year. UIL repaid the AUD 13.5m in the year and as at 30 June 2024 the balance was £nil. The | |
| loan bears interest at an annual rate of 8.3% and UIL paid interest of AUD 136k to Zeta Energy Pte | |
| Ltd during the year. | |
| During the year, Zeta bought back 28,132,739 Zeta shares from UIL as part of the Zeta’s buy back | |
| plan. UIL received AUD 9.0m. |
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
Accrued income | 267 | 36 |
Prepayments and other debtors | 29 | 26 |
296 | 62 |
NOTES TO THE ACCOUNTS
(continued)
84 85
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||
| Net current | Net current | |||||
| Current | Current | assets/ | Current | Current | assets/ | |
| assets | liabilities | (liabilities) | assets | liabilities | (liabilities) | |
| Group and Company | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Forward foreign exchange contracts | – | – | – | – | – | – |
Option contracts | – | – | – | 110 | – | 110 |
– | – | – | 110 | – | 110 |
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
Valuation brought forward | 110 | (1,942) |
Net settlements | (75) | 4,090 |
Losses | (35) | (2,038) |
Valuation carried forward | – | 110 |
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
| Bank loans | ||
GBP 37.5m repaid March 2024 | – | 37,500 |
| Union Mutual Pension Fund Limited | ||
USD 6.6m repaid August 2023 | – | 5,191 |
GBP 2.9m repayable September 2024 | 2,850 | – |
2,850 | 42,691 |
84 85
UIL Limited Report and Accounts for the year to 30 June 2024
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £’000s | £’000s | £’000s | £’000s | |
Bank overdraft | – | 7,872 | – | 7,872 |
Intra-group loans | – | – | 40,778 | – |
Accrued finance costs | 40 | 633 | 40 | 633 |
Accrued expenses | 382 | 387 | 382 | 387 |
422 | 8,892 | 41,200 | 8,892 |
16. ZDP SHARES
| Group | |||
| 2024 | 2023 | ||
| ZDP shares – current liabilities | £’000s | £’000s | |
2024 | ZDP shares | 40,778 | – |
| ZDP shares – non-current liabilities | |||
2024 | ZDP shares | – | 38,765 |
2026 | ZDP shares | 30,513 | 29,005 |
2028 | ZDP shares | 28,505 | 26,819 |
59,018 | 94,589 | ||
Total ZDP shares liabilities | 99,796 | 94,589 | |
Authorised ZDP shares at 30 June 2024 and 30 June 2023 are as follows: | Number | £’000s | |
2022 | ZDP shares | 63,686,754 | 3,387 |
2024 | ZDP shares | 76,717,291 | 2,917 |
2026 | ZDP shares | 25,000,000 | 2,500 |
2028 | ZDP shares | 44,842,717 | 1,734 |
| 2024 | 2026 | 2028 | Total | ||||
2024 | Number | £’000s | Number | £’000s | Number | £’000s | £’000s |
Balance at 30 June 2023 | 30,000,000 | 38,765 | 22,690,380 | 29,005 | 24,416,265 | 26,819 | 94,589 |
Finance costs (see note 6) | – | 2,013 | – | 1,508 | – | 1,686 | 5,207 |
Balance at 30 June 2024 | 30,000,000 | 40,778 | 22,690,380 | 30,513 | 24,416,265 | 28,505 | 99,796 |
| 2022 | 2024 | 2026 | 2028 | Total | |||||
2023 | Number | £’000s | Number | £’000s | Number | £’000s | Number | £’000s | £’000s |
Balance as at 30 June 2022 | 35,569,069 | 51,166 | 30,000,000 | 36,833 | 22,690,380 | 27,589 | 24,416,265 | 25,225 | 140,813 |
Redemption of ZDP shares | (35,569,069) | (52,283) | – | – | – | – | – | – | (52,283) |
Finance costs (see note 6) | – | 1,117 | – | 1,932 | – | 1,416 | – | 1,594 | 6,059 |
Balance as at 30 June 2023 | – | – | 30,000,000 | 38,765 | 22,690,380 | 29,005 | 24,416,265 | 26,819 | 94,589 |
NOTES TO THE ACCOUNTS
(continued)
86 87
UIL Limited Report and Accounts for the year to 30 June 2024
On 31 October 2022 the 35,569,069 2022 ZDP shares that were in issue were redeemed at 146.99p per 2022 ZDP share.
The Company held 2,309,620 2026 ZDP shares as at 30 June 2023 and 30 June 2024.
The Company held 583,735 2028 ZDP shares as at 30 June 2023 and 30 June 2024.
2024 ZDP shares
Based on the initial entitlement of a 2024 ZDP share of 100p on 2 November 2018, a 2024 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2024 of 138.35p equating to a 4.75% per annum gross redemption yield. The
capital entitlement (excluding issue costs) per 2024 ZDP share as at 30 June 2024 was 136.15p (2023: 130.04p).
2026 ZDP shares
Based on the initial entitlement of a 2026 ZDP share of 100p on 26 April 2018, a 2026 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2026 of 151.50p equating to a 5.00% per annum gross redemption yield. The
capital entitlement (excluding issue costs) per 2026 ZDP share as at 30 June 2024 was 135.15p (2023: 128.75p).
2028 ZDP shares
Based on the initial entitlement of a 2028 ZDP share of 100p on 23 April 2021, a 2028 ZDP share will have a final capital
entitlement at the end of its life on 31 October 2028 of 152.29p equating to a 5.75% per annum gross redemption yield. The
capital entitlement (excluding issue costs) per 2028 ZDP share as at 30 June 2024 was 119.49p (2023: 113.02p).
The ZDP shares are traded on the London Stock Exchange and are stated at amortised cost using the effective interest method.
The ZDP shares carry no entitlement to income however they have a pre-determined final capital entitlement which ranks behind
all other liabilities and creditors of UIL Finance and UIL but in priority to the ordinary shares of the Company save in respect of
certain winding up revenue profits.
The growth of each ZDP accrues daily and is reflected in the capital return and NAV per ZDP share on an effective interest rate
basis. The ZDP shares do not carry any voting rights at general meetings of the Company. However the Company will not be
able to carry out certain corporate actions unless it obtains at separate meetings approval of each class of ZDP shareholders.
Separate approval of each class of ZDP shareholders must be obtained in respect of any proposals which would affect their
respective rights, including any resolution to wind up the Company. In addition the approval of ZDP shareholders by the passing
of a special resolution at separate class meetings of the ZDP shareholders is required in relation to any proposal to modify, alter
or abrogate the rights attaching to any class of the ZDP shares and in relation to any proposal by UIL or UIL Finance which would
reduce the Group’s cover of the existing ZDP shares below 1.35 times.
On a liquidation of UIL and/or UIL Finance, to the extent that the relevant classes of ZDP shares have not already been redeemed,
the shares shall rank in the following order of priority in relation to the repayment of their accrued capital entitlement as at the
date of liquidation:
i. the 2024 ZDP shares shall rank in priority to the 2026 ZDP shares and the 2028 ZDP shares; and
ii. the 2026 ZDP shares shall rank in priority to the 2028 ZDP shares.
The entitlement of ZDP shareholders of a particular class shall be determined in proportion to their holdings of ZDP shares of
that class.
| 2024 | 2023 | |
| Company | £’000s | £’000s |
Intra-group loans | 62,837 | 98,222 |
86 87
UIL Limited Report and Accounts for the year to 30 June 2024
Number | £’000s | |
| Equity share capital: | ||
| Ordinary shares of 10p each with voting rights | ||
Authorised | 250,000,000 | 25,000 |
| Total shares | Total shares | |
| in issue | in issue | |
| 2024 | Number | £’000s |
Balance at 30 June 2023 and 30 June 2024 | 83,842,918 | 8,384 |
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
Balance brought forward and carried forward | 37,874 | 37,874 |
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
Balance brought forward and carried forward | 233,866 | 233,866 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Capital reserves comprise: | £’000s | £’000s | £’000s | £’000s |
Arising on investments sold | (84,736) | (77,920) | (85,618) | (78,616) |
Arising on revaluation of investments held | (73,071) | (46,358) | (72,797) | (46,165) |
Balance as at 30 June | (157,807) | (124,278) | (158,415) | (124,781) |
NOTES TO THE ACCOUNTS
(continued)
88 89
UIL Limited Report and Accounts for the year to 30 June 2024
| 2024 | 2023 | |
| Group and Company | £’000s | £’000s |
Balance brought forward | 11,735 | 12,846 |
Amount transferred to revenue reserve | 8,514 | 5,597 |
Dividends paid in the year | (5,031) | (6,708) |
Balance as at 30 June | 15,218 | 11,735 |
23. NET ASSET VALUE PER ORDINARY SHARE
NAV per ordinary share is based on net assets at the year end of £137,535,000 for the Group and £136,927,000 for the Company
(2023: £167,581,000 for the Group and £167,078,000 for the Company) and on 83,842,918 ordinary shares in issue at the year end
(2023: 83,842,918).
| Non-cash flow | ||||||||
| Group | changes | |||||||
| Balance at | Foreign | Balance | ||||||
| 30 June | Transactions | exchange | Finance | at 30 June | ||||
| 2023 | in the year | Receipts | Payments | movement | Settlements | costs | 2024 | |
| 2024 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Loans | 42,691 | – | 9,814 | (46,336) | 54 | (3,373) | – | 2,850 |
ZDP shares | 94,589 | – | – | – | – | – | 5,207 | 99,796 |
Dividends paid | – | 5,031 | – | (5,031) | – | – | – | – |
137,280 | 5,031 | 9,814 | (51,367) | 54 | (3,373) | 5,207 | 102,646 |
| Non-cash flow | |||||||
| changes | |||||||
| Balance | Foreign | Balance | |||||
| at 30 June | Transactions | exchange | Finance | at 30 June | |||
| 2022 | in the year | Receipts | Payments | movement | costs | 2023 | |
| 2023 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Loans | 51,080 | – | 55,231 | (66,070) | 2,450 | – | 42,691 |
ZDP shares | 140,813 | – | – | (52,283) | – | 6,059 | 94,589 |
Dividends paid | – | 6,708 | – | (6,708) | – | – | – |
191,893 | 6,708 | 55,231 | (125,061) | 2,450 | 6,059 | 137,280 |
88 89
UIL Limited Report and Accounts for the year to 30 June 2024
| Non-cash flow | ||||||||
| Company | changes | |||||||
| Balance at | Foreign | Balance | ||||||
| 30 June | Transactions | exchange | Finance | at 30 June | ||||
| 2023 | in the year | Receipts | Payments | movement | Settlements | costs | 2024 | |
| 2024 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Loans | 42,691 | – | 9,814 | (46,336) | 54 | (3,373) | – | 2,850 |
Intra-group loans | 98,222 | – | – | – | – | – | 5,393 | 103,615 |
Dividends paid | – | 5,031 | – | (5,031) | – | – | – | – |
140,913 | 5,031 | 9,814 | (51,367) | 54 | (3,373) | 5,393 | 106,465 |
| Non-cash flow | |||||||
| changes | |||||||
| Balance | Foreign | Balance | |||||
| at 30 June | Transactions | exchange | Finance | at 30 June | |||
| 2022 | in the year | Receipts | Payments | movement | costs | 2023 | |
| 2023 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Loans | 51,080 | – | 55,231 | (66,070) | 2,450 | – | 42,691 |
Intra-group loans | 144,245 | – | – | (52,283) | – | 6,260 | 98,222 |
Dividends paid | – | 6,708 | – | (6,708) | – | – | – |
195,325 | 6,708 | 55,231 | (125,061) | 2,450 | 6,260 | 140,913 |
NOTES TO THE ACCOUNTS
(continued)
90 91
UIL Limited Report and Accounts for the year to 30 June 2024
90 91
UIL Limited Report and Accounts for the year to 30 June 2024
27. OPERATING SEGMENTS
The Directors are of the opinion that the Company’s activities comprise a single operating segment, which is investing in equity,
debt and derivative securities to maximise shareholder returns.
28. GOING CONCERN
Notwithstanding that the Group has reported net current liabilities of £42,269,000 as at 30 June 2024 (2023: £46,177,000), the financial
statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons.
The Board’s going concern assessment has focussed on the forecast liquidity of the Group for at least 12 months from the date of
approval of the financial statements. This analysis assumes that the Company will meet some of its short term obligations through the
sale of level 1 securities, which represented 16.5% of the Company’s total portfolio as at 30 June 2024. As part of this assessment the
Board has considered a severe but plausible downside that reflects the impact of the key risks set out in the Strategic Report and an
assessment of the Company’s ability to meet its liabilities as they fall due (including the loan liabilities in note 14 and the 2024 ZDP share
liabilities in note 16), assuming a significant reduction in asset values and accompanying currency volatility.
The severe but plausible downside a significant reduction in asset values in line with that experienced during the emergence of the
Covid-19 pandemic in the first quarter of 2020. The Board also considered reverse stress testing to identify the reduction in the valuation
of liquid investments that would cause the Group to be unable to meet its net current liabilities, being primarily the 2024 ZDP shares
of £40,778,000. The Board is confident that the reduction in asset values implied by the reverse stress test is not plausible even in the
current volatile environment.
Consequently, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for
at least 12 months from the date of approval of the financial statements. Accordingly, the Board considers it appropriate to continue to
adopt the going concern basis in preparing the accounts.
NOTES TO THE ACCOUNTS
(continued)
92 93
UIL Limited Report and Accounts for the year to 30 June 2024
| AUD | BMD | EUR | USD | Other | Total | |
| 2024 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Cash and cash equivalents | – | – | – | 16 | – | 16 |
Net monetary liabilities | – | – | – | 16 | – | 16 |
Investments | 110,569 | 19,552 | 20,751 | 6,220 | 55,741 | 212,833 |
Net financial assets | 110,569 | 19,552 | 20,751 | 6,236 | 55,741 | 212,849 |
| AUD | BMD | CAD | USD | Other | Total | |
| 2023 | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
Other receivables | 1 | – | 36 | – | 2 | 39 |
Derivative financial instruments – assets | – | – | – | 110 | – | 110 |
Cash and cash equivalents | (1) | – | 15 | 5,191 | – | 5,205 |
Short-term borrowings | – | – | – | (5,191) | – | (5,191) |
Net monetary liabilities | – | – | 51 | 110 | 2 | 163 |
Investments | 119,932 | 29,428 | 17,550 | 7,617 | 74,414 | 248,941 |
Net financial assets | 119,932 | 29,428 | 17,601 | 7,727 | 74,416 | 249,104 |
2024 | 2023 | |||||||
| AUD | BMD | EUR | USD | AUD | CAD | EUR | USD | |
| Weakening of Sterling | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Income Statement | ||||||||
Revenue profit for the year | 592 | 166 | 147 | – | 201 | 710 | 11 | – |
Capital profit for the year | 12,285 | 2,172 | 2,306 | 691 | 13,326 | 3,270 | 1,950 | 846 |
Total profit for the year | 12,877 | 2,338 | 2,453 | 691 | 13,527 | 3,980 | 1,961 | 846 |
92 93
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||||||
| AUD | CAD | EUR | USD | AUD | CAD | EUR | USD | |
| Strengthening of Sterling | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| Income Statement | ||||||||
Revenue loss for the year | (592) | (166) | (147) | – | (201) | (710) | (11) | – |
Capital loss for the year | (12,285) | (2,172) | (2,306) | (691) | (13,326) | (3,270) | (1,950) | (846) |
Total loss for the year | (12,877) | (2,338) | (2,453) | (691) | (13,527) | (3,980) | (1,961) | (846) |
2024 | 2023 | |||||
| Within | More than | Within | More than | |||
| Total | one year | one year | Total | one year | one year | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
| Exposure to floating rates | ||||||
Cash and margin account | 1,485 | 1,485 | – | 5,234 | 5,234 | – |
Bank overdraft | – | – | – | (7,872) | (7,872) | – |
Borrowings | – | – | – | (37,500) | (37,500) | – |
1,485 | 1,485 | – | (40,138) | (40,138) | – | |
| Exposure to fixed rates | ||||||
Borrowings | (2,850) | (2,850) | – | (5,191) | (5,191) | – |
ZDP shares | (99,796) | (40,778) | (59,018) | (94,589) | – | (94,589) |
(102,646) | (43,628) | (59,018) | (99,780) | (5,191) | (94,589) | |
| Net exposures | ||||||
At year end | (101,161) | (42,143) | (59,018) | (139,918) | (45,329) | (94,589) |
Maximum in year | (142,290) | (46,598) | (95,692) | (195,720) | (106,073) | (89,647) |
Minimum in year | (85,456) | (27,889) | (57,567) | (139,918) | (45,329) | (94,589) |
| Exposure to | Fixed | Exposure to | Fixed | |||
| floating | interest | floating | interest | |||
| Total | interest rates | rates | Total | interest rates | rates | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
Maximum in year | (142,290) | (41,469) | (100,821) | (195,720) | (54,907) | (140,813) |
Minimum in year | (85,456) | (27,889) | (57,567) | (139,918) | (40,138) | (99,780) |
NOTES TO THE ACCOUNTS
(continued)
94 95
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||
| Increase | Decrease | Increase | Decrease | |
| in rate | in rate | in rate | in rate | |
| £’000s | £’000s | £’000s | £’000s | |
Revenue profit for the year | 27 | (27) | (907) | 907 |
Capital profit for the year | – | – | – | – |
Total profit for the year | 27 | (27) | (907) | 907 |
2024 | 2023 | |||
| Increase | Decrease | Increase | Decrease | |
| in value | in value | in value | in value | |
Income Statement capital profit for the year (£’000s) | 47,764 | (47,764) | 61,689 | (61,689) |
2024 | 2023 | |||||||
| More than | More than | |||||||
| Three | three months | Three | three months | |||||
| months | but less than | More than | months | but less than | More than | |||
| or less | one year | one year | Total | or less | one year | one year | Total | |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
Bank overdraft | – | – | – | – | 7,872 | – | – | 7,872 |
Other creditors | 382 | – | – | 382 | 387 | – | – | 387 |
Loans | 3,016 | – | – | 3,016 | 44,612 | – | – | 44,612 |
ZDP shares | – | 41,505 | 71,559 | 113,064 | – | – | 113,064 | 113,064 |
3,398 | 41,505 | 71,559 | 116,462 | 52,871 | – | 113,064 | 165,935 |
94 95
UIL Limited Report and Accounts for the year to 30 June 2024
2024 | 2023 | |||
| Maximum | Maximum | |||
| exposure | exposure | |||
| 30 June | in the year | 30 June | in the year | |
| Current assets | £’000s | £’000s | £’000s | £’000s |
Cash at bank | 1,485 | 8,884 | 5,234 | 5,234 |
| Financial assets through profit and loss | ||||
Investments in debt instruments | 4,983 | 9,638 | 2,952 | 18,095 |
Derivatives (forward foreign exchange contracts) | – | – | – | 138,305 |
Derivatives (option contracts) | – | 129 | 110 | 110 |
| 2024 | 2023 | ||
| £’000s | £’000s | ||
2024 | ZDP shares | 39,900 | 37,050 |
2026 | ZDP shares | 27,002 | 25,980 |
2028 | ZDP shares | 23,928 | 23,562 |
96 97
UIL Limited Report and Accounts for the year to 30 June 2024
NOTES TO THE ACCOUNTS
(continued)
96 97
UIL Limited Report and Accounts for the year to 30 June 2024
98 99
UIL Limited Report and Accounts for the year to 30 June 2024
| As at 30 June 2024 | Valuation | Risk | Sensitivity | Carrying | Sensitivity | |
Investment | Investment type | methodology | weighting | +/- | amount £’000s | £’000s |
Somers | Equity | NAV | Medium | 20% | 105,481 | 21,096 |
Allectus Quantum | Equity | NAV | Medium | 20% | 14,681 | 2,936 |
Allectus Capital | Equity & Loans | NAV | Medium | 20% | 12,157 | 2,431 |
West Hamilton | Equity | NAV | Low | 10% | 6,718 | 672 |
Other investments | Equity | Various | Medium | 20% | 4,787 | 957 |
Other investments | Loans | Various | Low | 10% | 2,457 | 246 |
Total | 146,281 | 28,338 |
| As at 30 June 2023 | Valuation | Risk | Sensitivity | Carrying | Sensitivity | |
Investment | Investment type | methodology | weighting | +/- | amount £’000s | £’000s |
Somers | Equity | NAV | Low | 20% | 107,688 | 21,538 |
Allectus Capital | Equity | NAV | Medium | 20% | 17,821 | 3,564 |
Allectus Quantum | Equity | NAV | Medium | 20% | 14,666 | 2,933 |
West Hamilton | Equity | Fair value of assets | Low | 10% | 15,087 | 1,509 |
Arria | Equity | Last fund raising | Medium | 20% | 6,602 | 1,320 |
Other investments | Equity | Various | Medium | 20% | 9,451 | 1,890 |
Other investments | Loans | Various | Low | 10% | 1,337 | 134 |
Total | 172,652 | 32,888 |
NOTES TO THE ACCOUNTS
(continued)
98 99
UIL Limited Report and Accounts for the year to 30 June 2024
30. SUBSEQUENT EVENTS
On 5 August 2024, Somers provided a £2.85m loan facility to UIL and on 6 August 2024 the £2.85m was drawn by UIL. The loan is
repayable on 30 November 2024 and bears interest at 7% per annum. On 9 August 2024 UIL repaid the loan of £2.85m to UMPF.
On 12 September 2024, Zeta provided a USD 6.0m loan facility to UIL. On 17 September 2024 the USD 6.0m was drawn by UIL.
The loan is repayable on 31 December 2024 and bears interest at 7% per annum.
On 8 October 2024, UIL’s subsidiary Zeta announced it expects to receive approximately USD 41m from Koumbia Bauxite
Investments Limited (“KBI”), an unlisted Bermuda based company in which Zeta is a 41.3% shareholder and is Zeta’s largest
investment. KBI has agreed to terminate its commercialisation deed with Alliance Mining Commodities Ltd (“AMC”), the 90%
owner of the Koumbia bauxite project located in Guinea, and in exchange KBI has received USD 100 million from the 100% owner
of AMC. The payment from KBI is expected to be received by Zeta within one week.
There were no other material events after the year end of the reporting period except as disclosed for dividends declared (note 9)
and ordinary shares purchased (note 18).
100 101
UIL Limited Report and Accounts for the year to 30 June 2024
ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (“AIMFD”)
In accordance with the AIFMD, information in relation to the Group’s leverage and the remuneration of the Company’s AIFM,
ICMIM, is required to be made available to investors. Detailed regulatory disclosures including those on the AIFM’s remuneration
policy are available on the Company’s website or from ICMIM on request.
The Group’s maximum and actual leverage as at 30 June are shown below:
Leverage exposure
Gross
method
2024
Commitment
method
Gross
method
2023
Commitment
method
Maximum permitted limit 425% 425% 425% 425%
Actual 175% 175% 188% 188%
The leverage limits are set by the AIFM and approved by the Board. The AIFM is also required to comply with the gearing
parameters set by the Board in relation to borrowings.
OTHER FINANCIAL INFORMATION (UNAUDITED)
101
Report and Accounts for the year to 30 June 2024
100 101
UIL Limited Report and Accounts for the year to 30 June 2024
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of UIL Limited will be held at Clarendon House, 2 Church Street, Hamilton
HM 11, Bermuda on Thursday, 14 November 2024 at 5.00pm (local time) for the purpose of considering and, if thought fit, passing
the following resolutions (which will be proposed in the case of resolutions 1 to 11, as ordinary resolutions and, in the case of
resolution 12, as a special resolution).
ORDINARY BUSINESS
1. To receive and adopt the report of the Directors of the Company and the financial statements for the year ended 30 June
2024, together with the report of the auditor thereon.
2. To approve the Directors’ Remuneration Report for the year ended 30 June 2024.
3. To approve the Company’s dividend policy to pay four interim dividends per year.
4. To elect Mr P Durhager as a Director.
5. To re-elect Mr S Bridges as a Director.
6. To re-elect Ms A Hill as a Director.
7. To re-elect Mr D Shillson as a Director.
8. To appoint KPMG Audit Limited as auditor of the Company to hold office until the conclusion of the next Annual General
Meeting of the Company.
9. To authorise the Directors to determine the auditor’s remuneration.
SPECIAL BUSINESS
Ordinary resolution
10. That, in substitution for the Company’s existing authority to make market purchases of ordinary shares of 10p in the
Company (“Ordinary Shares”), the Company be and it is generally and unconditionally authorised to make market purchases
of Ordinary Shares, provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is 12,554,000 (being the equivalent of
approximately 14.99% of the issued Ordinary Shares as at the date of this notice);
(b) the minimum price which may be paid for an Ordinary Share shall be 10p;
(c) the maximum price (exclusive of expenses payable by the Company) which may be paid for an Ordinary Share shall be the
higher of:
(i) 105% of the average of the middle market quotations of the Ordinary Shares for the five business days prior to the
date on which such shares are contracted to be purchased; and
(ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venue
where the purchase is carried out;
(d) such purchases shall be made in accordance with the Companies Act 1981 of Bermuda; and
(e) unless renewed, the authority hereby conferred shall expire at the conclusion of the Annual General Meeting to be held
in 2025 save that the Company may, prior to such expiry, enter into a contract to purchase Ordinary Shares which will or
may be completed or executed wholly or partly after the expiration of such authority.
Special resolution
11. That, for the purpose of Bye-law 4A of the Company’s Bye-laws, the Company may issue Relevant Securities (as defined in the
Bye-laws) representing up to 8,375,000 Ordinary Shares, equivalent to approximately 10% of the total number of Ordinary
Shares in issue as at the date of this notice otherwise than on a pre-emptive basis, provided that such disapplication shall
expire (unless and to the extent previously revoked, varied or renewed by the Company in general meeting by Special
Resolution (as defined in the Bye-laws)) at the earlier of the conclusion of the Annual General Meeting to be held in 2025 or 18
months from the date of this resolution but so that this power shall enable the Company to make such offers or agreements
before such expiry which would or might otherwise require Relevant Securities to be issued after such expiry and the
Directors may issue Relevant Securities in pursuance of such offer or agreement as if such expiry had not occurred.
By order of the Board
ICM Limited, Secretary
8 October 2024
102 103
UIL Limited Report and Accounts for the year to 30 June 2024
NOTES
1. Only the holders of ordinary shares registered on the register of
members of the Company at close of business on 12 November
2024 shall be entitled to attend and vote or to be represented at the
meeting in respect of the ordinary shares registered in their name at
that time. Changes to entries on the register after close of business
on 12 November 2024 shall be disregarded in determining the rights
of any person to attend and vote at the meeting.
2. A member entitled to attend and vote at the meeting may appoint
one or more proxies to attend and vote instead of him/her. A proxy
need not be a member of the Company.
3. If the Chairman, as a result of any proxy appointments, is given
discretion as to how the votes are cast and the voting rights
in respect of those discretionary proxies, when added to the
interests in the Company’s securities already held by the Chairman,
result in the Chairman holding such number of voting rights that
he has a notifiable obligation under the Disclosure Guidance
and Transparency Rules, the Chairman will make the necessary
notifications to the Company and the Financial Conduct Authority.
As a result, any person holding 5% or more of the voting rights in
the Company who grants the Chairman a discretionary proxy in
respect of some or all of those voting rights and so would otherwise
have a notification obligation under the Disclosure Guidance and
Transparency Rules need not make a separate notification to the
Company and the Financial Conduct Authority.
4. Any such person holding 5% or more of the voting rights in the
Company who appoints a person other than the Chairman as his
proxy will need to ensure that both he and such person complies
with their respective disclosure obligations under the Disclosure
Guidance and Transparency Rules.
5. A form of proxy is provided with this notice of meeting. The return
of a form of proxy will not preclude a member from attending the
meeting and voting in person if he/she wishes to do so. To be valid,
a form of proxy for use at the meeting and the power of attorney
or other authority (if any) under which it is signed, or a notarially
certified or office copy of such power or authority, must be deposited
with the Company’s registrars, Computershare Investor Services
(Bermuda) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99
6ZY not later than 5:00 pm (GMT) on 12 November 2024.
Alternatively, shareholders can vote or appoint a proxy electronically
by visiting www.investorcentre.co.uk/eproxy. You will be asked to
enter the Control Number, the Shareholder Reference Number
and PIN which are printed on the form of proxy. The latest time for
the submission of proxy votes electronically is 5:00 pm (GMT) on
12 November 2024. To appoint more than one proxy, an additional
proxy form(s) may be obtained by contacting the Registrar’s helpline
on 0370 707 1196 or you may photocopy the form of proxy. Please
indicate in the box next to the proxy holder’s name the number
of shares in relation to which they are authorised to act as your
proxy. Please also indicate by marking the box provided if the proxy
instruction is one of multiple instructions being given. All forms of
proxy must be signed and should be returned together in the same
envelope.
6. Investors holding ordinary shares in the Company through
depository interests should ensure that Forms of Instruction are
returned to The Depositary, Computershare Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol, BS99 6ZY not later than 5:00
pm (GMT) on 11 November 2024 or give an instruction via the CREST
system as detailed under note 7. Please note only depositary interest
holders registered on the depositary interest register at close of
business on 11 November 2024 shall be entitled to attend and vote
or to be represented at the meeting. Changes to entries on the
depositary interest register after close of business on 11 November
2024 shall be disregarded in determining the rights of any person to
attend and vote at the meeting.
7. Depositary interest holders who are CREST members and who
wish to issue an instruction through the CREST electronic voting
appointment service may do so by using the procedures described
in the CREST manual (available from www.euroclear.com). CREST
personal members or other CREST sponsored members, and those
CREST members who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting services provider(s),
who will be able to take the appropriate action on their behalf.
In order for instructions made using the CREST service to be valid,
the appropriate CREST message (a “CREST Voting Instruction”) must
be properly authenticated in accordance with the specifications
of Euroclear UK & International Limited (“EUI”) and must contain
the information required for such instructions, as described in the
CREST Manual (available from www.euroclear.com). The message,
regardless of whether it relates to the voting instruction or to an
amendment to the instruction given to the Depositary must, in
order to be valid, be transmitted so as to be received by the issuer’s
agent (ID 3RA50) no later than 5:00 pm, (GMT) on 11 November
2024. For this purpose, the time of receipt will be taken to be the
time (as determined by the timestamp applied to the CREST Voting
Instruction by the CREST applications host) from which the issuer’s
agent is able to retrieve the CREST Voting Instruction by enquiry to
CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors
or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore apply in
relation to the transmission of CREST Voting Instructions. It is the
responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member or sponsored member
or has appointed a voting service provider(s), to procure that the
CREST sponsor or voting service provider(s) take(s)) such action
as shall be necessary to ensure that a CREST Voting Instruction is
transmitted by means of the CREST service by any particular time. In
this connection, CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in particular, to
those sections of the CREST Manual concerning practical limitations
of the CREST system and timings. The Company may treat as invalid
a CREST Voting Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
8. The register of Directors’ holdings is available for inspection at the
registered office of the Company during normal business hours on
any weekday and will be available at the place of the meeting from
15 minutes prior to the commencement of the meeting until the
conclusion thereof.
9. No service contracts exist between the Company and any of the
Directors, who hold office in accordance with letters of appointment
and the Company’s Bye-laws. The letters of appointment are
available for inspection on request at the Company’s registered
office and at the Annual General Meeting.
10. As at the date of publication of this Notice of Annual General
Meeting, the Company’s issued share capital consisted of 83,755,585
ordinary shares of 10p each. Each ordinary share carries the right to
one vote and therefore the total voting rights in the Company as at
the date of this Notice are 83,755,585.
NOTICE OF ANNUAL GENERAL MEETING (continued)
103
Report and Accounts for the year to 30 June 2024
102 103
UIL Limited Report and Accounts for the year to 30 June 2024
DIRECTORS
Stuart Bridges (Chairman)
Peter Durhager
Alison Hill
David Shillson
REGISTERED OFFICE
Clarendon House, 2 Church Street, Hamilton HM 11,
Bermuda
Company Registration Number: 39480
LEI: 213800CTZ7TEIE7YM468
AIFM AND JOINT PORTFOLIO MANAGER
ICM Investment Management Limited
Ridge Court, The Ridge, Epsom, Surrey, KT18 7EP
United Kingdom
Telephone number 01372 271486
Authorised and regulated in the UK by the Financial Conduct Authority
JOINT PORTFOLIO MANAGER AND SECRETARY
ICM Limited
34 Bermudiana Road, Hamilton HM 11, Bermuda
Registered in Bermuda under the Investment Business Act 2003 to
carry on investment business
ASSISTANT SECRETARY
Conyers Corporate Services (Bermuda) Limited
Clarendon House, 2 Church Street, Hamilton HM 11,
Bermuda
ADMINISTRATOR
JP Morgan Chase Bank N.A. – London Branch
25 Bank Street, Canary Wharf, London E14 5JP
United Kingdom
Authorised in the UK by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential
Regulation Authority
BROKER
Shore Capital and Corporate Limited
Cassini House, 57 St James’s Street, London
SW1A 1LD United Kingdom
Authorised and regulated in the UK by the Financial Conduct Authority
LEGAL ADVISOR TO THE COMPANY
(as to English law)
Norton Rose Fulbright LLP
3 More London Riverside, London SE1 2AQ
United Kingdom
LEGAL ADVISOR TO THE COMPANY
(as to Bermuda law)
Conyers Dill & Pearman Limited
Clarendon House, 2 Church Street, Hamilton HM 11,
Bermuda
AUDITOR
KPMG Audit Limited
Crown House, 4 Par-la-Ville Road, Hamilton HM08
Bermuda
A member firm of the KPMG global organisation of independent
member firms affiliated with KPMG International Limited
DEPOSITARY SERVICES PROVIDER
J.P. Morgan Europe Limited
25 Bank Street, Canary Wharf, London E14 5JP
United Kingdom
Authorised in the UK by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential
Regulation Authority
CUSTODIAN
JPMorgan Chase Bank N.A. – Jersey Branch
JPMorgan House, Grenville Street, St Helier
Jersey JE4 8QH
Regulated by the Jersey Financial Services Commission
REGISTRAR
Computershare Investor Services (Bermuda) Limited
5 Reid Street, Hamilton HM 11, Bermuda
Telephone number 0370 707 1196
REGISTRAR TO THE DEPOSITARY INTERESTS
AND CREST AGENT
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZY
United Kingdom
COMPANY INFORMATION
104 105
UIL Limited Report and Accounts for the year to 30 June 2024
104
UIL Limited
The European Securities and Markets Authority defines an Alternative Performance Measure (“APM”) as being a
financial measure of historical or future financial performance, financial position or cash flow, other than a financial
measure defined or specified in the applicable accounting framework. The Group uses the following APMs:
Discount/Premium – if the share price is lower than the NAV per ordinary share, the shares are trading at a
discount. Shares trading at a price above NAV per ordinary share are said to be at a premium. As at 30 June 2024
the ordinary share price was 103.50p (2023: 145.00p) and the NAV per ordinary share was 164.04p (2023: 199.87p),
the discount was therefore 36.9% (2023: 27.5%).
Gearing – represents the ratio of the borrowings less cash and cash equivalents of the Company to its net assets.
page
2024
£’000s
2023
£’000s
Bank overdraft 85 – 7,872
Cash and cash equivalents 70 (1,485) (5,234)
Loans 70 2,850 42,691
ZDP shares 70 99,796 94,589
Total debt 101,161 139,918
Net assets attributable to equity holders 70 137,535 167,581
Gearing 73.6% 83.5%
NAV/share price total return – the return to shareholders calculated on a per ordinary share basis by adding
dividends paid in the period to the increase or decrease in the NAV or share price in the period. The dividends
are assumed to have been re-invested in the form of net assets or shares, respectively, on the date on which the
dividends were paid.
Year to 30 June 2024
Dividend rate
(pence)
NAV
(pence)
Share price
(pence)
30-Jun-23 n/a 199.87 145.00
13-Oct-23 2.00 193.47 121.00
21-Dec-23 2.00 191.27 121.00
23-May-24 2.00 182.51 105.00
30-Jun-24 164.04 103.50
Total return (15.3%) (24.8%)
Year to 30 June 2023
Dividend rate
(pence)
NAV
(pence)
Share price
(pence)
30-Jun-22 n/a 260.69 187.50
30-Sep-22 2.00 258.73 188.50
23-Dec-22 2.00 233.15 155.00
31-Mar-23 2.00 214.13 128.50
26-Jun-23 2.00 201.89 143.50
30-Jun-23 n/a 199.87 145.00
Total return (20.6%) (18.5%)
ALTERNATIVE PERFORMANCE MEASURES
104 105
UIL Limited Report and Accounts for the year to 30 June 2024
NAV/share price total return since inception – the return to shareholders calculated on a per ordinary share
basis by adding dividends paid in the period and adjusting for the exercise of warrants and Convertible Unsecured
Loan Stock (“CULS”) in the period to the increase or decrease in the NAV/share price in the period. The dividends are
assumed to have been reinvested in the form of net assets or shares on the date on which the dividends were paid.
The adjustment for the exercise of warrants and CULS is made on the date the warrants and CULS were exercised.
Total return NAV (pence)
2024
Share price
(pence) NAV (pence)
2023
Share price
(pence)
NAV 14 August 2003 (pence) 99.47 85.67 99.47 85.67
Total dividend, warrants and CULS adjustment factor 2.282 2.9084 2.2105 2.7620
NAV/Share price at year end (pence) 164.04 103.50 199.87 145.00
Adjusted NAV/Share price at 30 June (pence) 374.34 301.02 441.81 400.49
Total return since inception 276.3% 251.4% 344.2% 367.5%
Annual compound NAV/share price total return since inception – the annual return to shareholders using the
same basis as NAV/share price total return since inception.
NAV
2024
Share price
NAV
2023
Share price
Annual compound NAV total return since inception 6.5% 6.2% 7.8% 8.1%
Ongoing charges – all operating costs expected to be regularly incurred and that are payable by the Group or
suffered within underlying investee funds, expressed as a proportion of the average weekly NAV of the Group
(valued in accordance with accounting policies) over the reporting year. The costs of buying and selling investments
and derivatives are excluded, as are interest costs, taxation, non-recurring costs and the costs of buying back or
issuing ordinary shares.
Ongoing charges calculation (including and excluding
performance fees) page
2024
£’000s
2023
£’000s
Management and administration fees 66 565 758
Other expenses 66 906 977
Expenses suffered within underlying funds 3,006 3,935
Total expenses for ongoing charges calculation 4,477 5,670
Average weekly NAV of the Group 160,050 200,431
Ongoing Charges 2.8% 2.8%
Revenue yield – represents the ratio of total income in the year over average gross assets in the year.
page
2024
£’000s
2023
£’000s
Income 66 12,227 10,229
Average Gross assets 285,779 357,505
Revenue yield 4.3% 2.9%
106
UIL Limited
Dividend yield – represents the ratio of dividends per ordinary share over closing ordinary share price.
page
2024
pence
2023
pence
Dividends per ordinary shares 3 8.00 8.00
Ordinary share price 3 103.50 145.00
Dividend yield 7.7% 5.5%
Revenue reserves per ordinary share carried forward – the value of the Group’s revenue reserves divided by the
number of ordinary shares in issue.
page 2024 2023
Revenue reserves (£'000s) 70 15,218 11,735
Number of ordinary shares in issue at 30 June 87 83,842,918 83,842,918
Revenue reserves per ordinary share carried forward (pence) 18.15 14.00
Gross assets – the value of the Group’s assets less current liabilities excluding loans and ZDP shares.
page
2024
£'000s
2023
£'000s
Investments 70 238,822 308,347
Current assets 70 1,781 5,406
Current liabilities - Other payables 70 (422) (8,892)
Gross assets 240,181 304,861
ALTERNATIVE PERFORMANCE MEASURES (continued)
107
Report and Accounts for the year to 30 June 2024
at 30 June 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
NAV per ordinary share (pence) 164.04 199.87 260.89 431.51 292.79 369.57 291.79 252.86 241.12 169.00
Ordinary share price (pence) 103.50 145.00 187.50 268.00 177.50 199.00 174.50 164.00 130.75 117.00
Discount (%) 36.9 27.5 28.1 37.9 39.4 46.2 40.2 35.1 45.8 30.8
Returns and dividends (pence)
Revenue return per ordinary share 10.15 6.68 8.35 9.98 9.77 7.63 6.67 6.38 6.23 7.84
Capital return per ordinary share (39.99) (59.70) (171.68) 133.81 (81.30) 75.34 38.96 12.46 68.45 2.47
Total return per ordinary share (29.84) (53.02) (163.33) 143.79 (71.53) 82.97 45.63 18.84 74.68 10.31
Dividends per ordinary share 8.000
1
8.000 8.000 8.000 7.875 7.500 7.500 7.500 7.500 7.500
FTSE All-Share total return Index 9,729 8,611 7,981 7,852 6,465 7,431 7,389 6,777 5,737 5,614
ZDP shares
2
(pence)
2024 ZDP shares
Capital entitlement
3
per ZDP share 136.15 130.04 124.14 118.51 113.13 107.97 103.10 n/a n/a n/a
ZDP share price 133.00 123.50 122.50 120.50 105.50 114.00 107.50 n/a n/a n/a
2026 ZDP shares
Capital entitlement
3
per ZDP share 135.15 128.75 122.62 116.78 111.21 105.89 100.87 n/a n/a n/a
ZDP share price 119.00 114.50 115.50 116.00 92.25 107.50 102.25 n/a n/a n/a
2028 ZDP shares
Capital entitlement
3
per ZDP share 119.49 113.02 106.87 101.60 n/a n/a n/a n/a n/a n/a
ZDP share price 98.00 96.50 99.00 100.00 n/a n/a n/a n/a n/a n/a
Equity holders' funds (£m)
Gross assets
4
240.2 304.9 410.6 544.4 483.3 537.2 488.3 449.7 440.7 373.4
Loans 2.9 42.7 51.1 48.5 51.1 51.0 27.8 47.8 24.7 34.4
ZDP shares 99.8 94.6 140.8 132.1 180.5 159.9 199.4 173.8 197.4 172.4
Equity holders' funds 137.5 167.6 218.7 363.8 251.6 326.3 261.1 228.1 218.6 166.6
Revenue account (£m)
Income 12.2 10.2 9.9 11.6 12.7 11.2 10.6 10.7 10.5 11.2
Costs (management and other expenses) 1.5 1.7 1.7 2.1 2.6 2.8 2.8 2.9 1.9 1.8
Finance costs 2.2 2.9 1.1 1.0 1.6 1.6 1.6 1.8 1.7 1.1
Net income 8.5 5.6 7.0 8.5 8.5 6.8 6.2 6.0 6.9 5.3
Financial ratios of the Group (%)
Ongoing charges figure
4
(excluding
performance fee) 2.8 2.8 2.2 2.3 2.1 2.1 2.2 2.1 3.3 2.0
Gearing
4
73.6 83.5 89.5 48.8 93.4 63.7 87.3 97.2 101.6 124.1
1 The third and fourth quarterly dividends of 2.00p each have not been included as a liability in the accounts
2 Issued by UIL Finance, a wholly owned subsidiary of UIL
3 See pages 27 and 28
4 See Alternative Performance Measures on pages 104 to 106
HISTORICAL PERFORMANCE
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Epsom Surrey
KT18 7YF
Telephone: +44 (0)1372 271486
www.uil.limited
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