Annual / Quarterly Financial Statement • Mar 31, 2019
Annual / Quarterly Financial Statement
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REGISTERED NUMBER: 08971695
| Strategic Report | 2 |
|---|---|
| Directors' Report | 4 |
| Statement of Directors' Responsibilities | 6 |
| lndependent Auditor's Report | 7 |
| Statement of Comprehensive lncome | 10 |
| Statement of Financial Position | 11 |
| Statement of Changes in Equity | T2 |
| Statement of Cash Flows | 13 |
| Notes to the Financial Statements | 14 |
The directors present their strategic report for TCHG Capital PLC (the "Company") for the year ended 31 March 2019.
Activity, objective, business model and review of the year
The Company was incorporated in England and Wales on 1 April 201.4 as a public llmited company. The company is a special purpose company established for the purpose of lssuing secured bonds (including further secured bonds issued in accordance with the conditions set out in the Prospectus dated 1 July 2014) and lending the proceeds thereof to Town and Country Housing Group ("Town & Country") or one or more of its subsidiaries. The Company has the benefit of a financial guarantee from Town & Country for the full and punctual payment of interest and principal.
ln July 2014, the Company issued €8O00O000 Fixed Rate 4.665% secured bonds due 2045, listed on the London Stock Exchange and granted a loan facility of €8O,OOO,OO0 to Town & Country.
The movements on the loan account during the year were:
| Date | Description | Amount (f,) |
|---|---|---|
| Balance at 31 March 2018 | 7O,820,875 | |
| 9 April 2018 | Drawdown | 2,000,000 |
| 27 June 2018 | Drawdown | 2,500,000 |
| 11 March 2019 | Repayment | (3,950,000) |
| 12 March 2019 | Repayment | (2,000,000) |
| 18 March 2019 | Repayment | (2,050,000) |
| Balance at 31 March 2019 | 67,320,875 |
The directors consider the financial position of the Company to be satisfactory.
The Company's result for the year was €nil (20L8: €nil) and the directors do not recommend the payment of a dividend.
Financial KPls - the key performance indicators of the business are considered to be the payment and receipt of interest and the net equity shareholders'funds, which at the year-end were f13k {2018: €i.3k).
The actual receipts and payments of interest to and from the Company have been monitored to ensure these obligations are met. The directors believe that all conditions ofthe Prospectus and Loan Agreement have been met.
Non-financial KPls - as the purpose of the business is entirely finance related, the directors are of the view that there are no meaningful non-financial KPls that could be adopted.
The principal risk and uncertainty for the Company is credit risk as described more fully in note 13. This includes the correct and timely receipt of interest and principal on the loan due from Town & Country. During the year all amounts were received on time and in full.
The directors have considered the nature and structure of the Company and are satisfied that there is sufficient capital in relation to the business activities and the planned levels of financial performance of the Company.
The directors consider the financial position of the Company to be satisfactory and that the Company will continue to operate in its principal activity.
By order of the
24 July 2019
The directors present their report and the audited frnancial statements ofthe company for the year ended 31 March 2019.
The directors of the Company who held office during the year and up to the date of signing this report were:
L.D.C. Securitisation Director No.3 Limited M.H. Filer J.M. Ellis R.O. Heapy R.J. Tebbutt (resigned 30 April 2019) A.J. Maffiotr (appointed 30 April 2019)
The directors are not subject to retirement by rotation.
The directors have no interests in any shares in the Company or its ultimate controlling party.
The directors conslder that the company has adequate capital and liquid resources, an appropriate business model and financial structure and suitable arrangements in place for it to be able to continue ln operational existence for the foreseeable future. Therefore the directors believe it appropriate for the financial statements to be prepared on a going concern basis.
A discussion of the Company's objectives, policies, strategies and risks with regard to financial instruments can be found in note 13 to the financial statements.
The Company is party to an agreement which raised finance through a fixed rate bond issue, the proceeds of which were advanced to Town & Country.
The Company does not undertake financial instrument transactions which are speculative or unrelated to the Company's trading activities.
ln so far as the directors are aware, there is no relevant audit information of which the Company's auditors are unaware. The directors have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to ensure that the Company's auditors are aware of that information.
The Company has outsourced the financial reporting function to Law Debenture Corporate Services Limited
Due to the Company's limited scope and nature of its activities, the Company's Board is itself responsible for all aspects of the Company's corporate governance. The Company does not, therefore, have a separate audit committee.
The Company's parent and controlllng entity Town & Country rolned the Peabody Group on g May 2019. TCHG will contlnue as an operatlng subsidiary of the Peabody Trust. There are no changes envlsaged for the Company.
The audltors, 8DO LLP, have expressed thelr wlllingness to contlnue in offlce and a resotution to support them wlll be proposed at the annua'l general meeting in accofdance wlth section 485 of the Companies Act 2006.
By order of the Board
24luly2QL9
Reglstered Office Fifth Floor 100 Wood Street London EC2V 7EX
The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with Financial Reporting Standard 102("FRS 102"): The Flnancial Reporting Standard applicable in the United Kingdom and Republic of lreland. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair vlew of the state of affairs of the Company and of the profit or loss of the Company for that year.
ln preparing these financial statements, the directors are required to:
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection offraud and other irregularities.
The directors conflrm, to the best of their knowledge:
The names of all the directors are stated on page 4.
We have audited the financial statements of TCHG Capital PLC (the 'company') for the year ended 31 March 2019, which comprise the statement of comprehensive income, statement of financial position and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard tOZ The Financiol Reporting Standord in the tJnited Kingdom and Republic of tretond (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with lnternational Standards on Auditing (UK) (lSAs (UK)) and applicable law' 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed and public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have nothing to report in respect of the following matters in relation to which the lSAs (UK) require us to report to you where:
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 and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation ofresources in the audit; and directing the efforts ofthe engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, ancl in forming our opinion thereon, and we do not provide a separate opinion on these matters. Due to the nature of the entity and its activities, no key audit matters were identified.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. lmportantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take into account of the nature of identified misstatements, and the particular circumstances of their occurrence. when evaluating their effect on the financial statements as a whole.
We determined materiality for the financial statements as a whole to be €809,200 which represents 1.0% of total assets.
We also apply a specific materiality level for all items within the statement of comprehensive income. The specific materiality level that we applied was €37,600 (20i.s - €37,600) which is 1.0% of income.
We used total assets and income as our chosen benchmarks to determine materiality and for specific materiality as these are considered to be the areas of the financial statements of greatest interest to the
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the directors' responsibilities statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstaterhent, whether due to fraud or error.
ln preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as appllcable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
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 auditor's 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 lSAs (UK) will always detect a material misstatemeni 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities.-This description forms part of our auditor's report.
We were appointed by the directors on L4 December 2017 to audit the financial statements for the year ending 31 March 201.8 and subsequent financial periods. The period of total uninterrupted engagement is 2 years, covering the years ending 31 March 2018 to 31 March 2019.
The non-audit services prohibited by the FRCs Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.
Our audit opinion is consistent with the additional report to the directors.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
L. ( r-K ;Y1 ( (n -"
Elizabeth Kulczycki, Senior Statutory Auditor For and on behalf of BDO LtP, Statutory Auditor Gatwick United Kingdom
Date: .3r I .ft-t17 2Ct,/
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
| Note | 20t9 €000 |
2018 f000 |
|
|---|---|---|---|
| lnterest receivable | 3 | 3,499 | 3,33-1 |
| Other income | 4 | 269 | 432 |
| lnterest payable | 5 | (s,7321 | (3,732) |
| expenses | (361 | (31) | |
| Result on ordlnary actlvlfles before tarction | 6 | ||
| Taxatlon | 7 | ||
| Result for the year |
There are no other items of comprehensive lncome other than the result for the year stated above. Accordingly, no staternent of other comprehensive income ls glven.
The above amounts relate excluslvely to contlnuing operatlons.
fhe notes on pages 14 to 19 form part of these financial statements.
| Note | 20L9 f000 |
2018 f000 |
|
|---|---|---|---|
| Flnanclal assets | |||
| Loans and receivables | 8 | 67.321 | 70.827 |
| Current assets | |||
| Cash and cash equivalents | 9 | t2,674 | 9,181 |
| Debtors: Amounts falline due within one year | 10 | 929 | 922 |
| 13,603 | 10,103 | ||
| Financial liabilities: Amounts falline due within one year | 17 | {9111 | (911) |
| Net current | 12.692 | 9,t92 | |
| Total assets less current llabilities | 80,013 | 80,013 | |
| Financial liabilities: Amounts falling due after more than one year |
t2 | (80,000) | (80,ooo) |
| Net assets | 13 | 13 | |
| Capltal and reserves | |||
| Called up share capltal | t4 | 13 | 13 |
| Profit and account |
|||
| Shareholders' funds | 13 | L3 |
The notes on pages 14 to 19 form part of these financial statements.
The financial statements were approved and authorised for issue by the directors on 24 July 2019 and signed on the behalf by:
M
n^-^ I a
| Prollt and loss | |||
|---|---|---|---|
| Share capltal | account | Total | |
| f,o00 | €000 | €000 | |
| Total equlty as at 1 April 2017 | 13 | 13 | |
| Net result for the vear | |||
| Total eoultv as at 31 March 2018 | 13 | 13 | |
| Total equity as at 1 Aprll 2018 | 13 | 13 | |
| Net result for the vear | |||
| Total eoulw as at 31 March 2019 | 13 | 13 |
The notes on pages t4 to X9 form part ofthese flnancial staternents.
| 20t9 €000 |
20L8 f000 |
|
|---|---|---|
| Operating activities | ||
| Result on ordinary activities before taxation | ||
| lncrease in debtors | (71 | (161) |
| lncrease in creditors | 2 | |
| Cash flow from operating activities | (71 | (1se) |
| lnvesting actlvities | ||
| lnvestments redeemed | ||
| Loan repaid | 8,000 | 11,000 |
| Loan advanced | {4.5001 | (11.s82) |
| Cash f low from investing activities | 3,500 | (s82) |
| lncrease /(decreasel in cash and cash eouivalents | 3.493 | ,J4tl |
| Cash and cash equivalents at beginning ofvear | 9,181 | 9,922 |
| Cash and cash equivalents at end of year | t2,674 | 9,181 |
The notes on pages 14 to 19 form part of these financial statements.
The financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the United Kingdom and Republic of treland. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estlmates. lt also requires management to exercise judgement in applying the accounting policies.
The financial statements have been prepared under the historical cost convention and in accordance with the Company's accounting policies.
The directors consider that the Company has adequate resources, an appropriate financial structure and suitable arrangements in place for it to continue in operational existence for the foreseeable future and therefore believe it appropriate for the financial statements to be prepared on the going concern basis.
The financial statements are presented in sterling, which is the Company's functional and presentational currency.
The Company's principal source of income is interest receivable and is recognised on an Effective lnterest Rate basis. The directors consider it would be misleading to classify this source as turnover.
Other income comprises of commitment fees and amounts recharged to Town & Country in respect of administrative expenses incurred during the period.
Commitment fees arise in respect of any undrawn commitment on each loan payment date, equal to Town & Country's share of the applicable coupon amount in the relevant loan interest period and is recognised on a receivable basis.
All income derives from the Company's principal activity, wholly within the UK.
All administrative expenses, which comprise primarily professional fees and otlrer overheads, are accounted for on an accruals basis.
Cash and cash equivalents comprise cash in hand and at bank and short-term bank deposits with an original maturity of three months or less which are an integral part of the Company's cash management,
Financial assets are assessed for impairment at each balance sheet date using the expected credit loss model. Lifetime expected credit losses are recognised where there has been a significant increase in credit risk since initial recognition, otherwise 12 months' expected credit losses are recognised. Credit risk is assessed as the rlsk of a default occurring over the expected life of the financial instrument. lmpairment gains or losses are recognised in profit or loss.
Corporation tax is payable on profits based on the applicable tax law and is recognised as an expense in the year in which profits arise. The tax effects oftax losses available to carry forward are recognised as an asset when it is probable that future taxable profits will be available aBainst which these losses can be utilised. The current income tax char8e is calculated on the basis of tax rates and laws that have been enacted or substantially enacted by the reportlng date.
Financial assets and liabilities are recognised in the balance sheet when the Company becomes a party to the contractual provisions of the instrument.
lnvestments in UK Gilts are lnitially recognised at cost and subsequently measured at amortised costs in accordance with IFRS 9, All other financlal assets and liabilities are measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of flnancial assets and liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate on initial recognition,
As permitted by FRS 102 the Company has made an accounting policy choice of applying the recognition and measurement requirements of IFRS 9. Accordingly the loan to Town & Country is classified as loans and receivables and is initially recognlsed at fair value and then carried at amortised cost using the effective interest r.ate method,
The secured bonds issued are also initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.
The preparation of financial statements in cbnformity with generally accepted accounting practice requlres management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabllities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period.
There are no critical accountingjudgements.
The key source of estimation irncertainty i5 in relation to impairment of assets. Details of the estimation uncertainty are included under the accounting policy on impairment of assets.
There were no employees in the Company during the year
The directors received no emoluments in respect of their services to the Company during the year
| 3,499 | 3,331 | |
|---|---|---|
| lnterest on investments | 34 | 19 |
| lnterest on loan to Town & Country | 3,465 | 3,3L2 |
| €000 | e000 | |
| 20L9 | 2018 |
| 2019 f000 |
2018 €000 |
|
|---|---|---|
| Commitment fee | 233 | 401 |
| Reimbursable expenses | 36 | 31 |
| 269 | 432 |
8.
| 2019 f000 |
2018 €000 |
|
|---|---|---|
| lnterest on secured bonds | 3,732 | 3,732 |
The following amounts have been included in arriving at the result on ordinary activities before taxation.
| 20L9 | 2018 | ||
|---|---|---|---|
| t000 | f000 | ||
| Atiditor's remuneration for the audit of the Company's financial | |||
| statements | 5 | 4 | |
| Prioryear under accrual | I | ||
| 6 | 4 | ||
| Fees to auditors for non-audit servlces | |||
| 7 | TAXATION | ||
| (a) Analysis of charge in the year |
|||
| 2019 | 2018 | ||
| f000 | €000 | ||
| Current taxt | |||
| Corporation tax charge for the year | |||
| Total taxation charge for the year |
(b) Factors affecting the tax charge for the current year
The current tax for the year is the same as the standard rate of corporation tax in the tJK of Ig% (2018:te%).
| 2019 | 2018 | |
|---|---|---|
| f000 | €000 | |
| Result for the year | ||
| Corporation tax levied at the standard rate ofcorporation tax in | ||
| the UK of 19% | ||
| Total current tax charge for the year | ||
| LOANS AND RECEIVABTES | ||
| 20t9 | 2018 | |
| f000 | €000 | |
| Loan to Town & Country | 67,321 | 70,82t |
The principal terms of the loan are detailed ln note 13.
| 9. | CASH EQUTVALENTS | ||
|---|---|---|---|
| mtg | 2018 | ||
| f000 | f000 | ||
| Liquidity fund | L2,627 | I,L52 | |
| Cash at bank | 47 | 29 | |
| 12,614 | 9,181 | ||
| 10. | DEBTORS: amounts falling due within one year | ||
| 2019 | 2018 | ||
| f000 | €000 | ||
| Accrued lnterest and commitment fee | 922 | 974 | |
| Prepayments | 7 | 8 | |
| 929 | 922 | ||
| tl, | FINANCIAL llABlLlTlES: amounts falllng due wlthln one year | ||
| 2019 | 20L8 | ||
| f000 | €000 | ||
| Other credltors | I | 9 | |
| Accrued interest | 902 | 902 | |
| 9X1 | 911 | ||
| 12, | FINANCIAL tlABl[TIES: amounts fallingdue after more than one year | ||
| 2019 | 2018 | ||
| c000 | f000 | ||
| Secured bonds (due October 2045) | 80,000 | 80,000 |
The prlncipal terms of the secured bonds are deteiled in note 13 and are the same as the loan to TCH6.
The Company's financial instruments are shown in the table below,
| 2019 €000 |
2018 €000 |
|
|---|---|---|
| Financial assets that are debt instruments measured | ||
| at amortised cost | 58,250 | 7L,743 |
| Financial liabilities measured at amortised cost | 80,9t1 | 80,911 |
ln July 2014, the Cpmpany granted a revolving loan facility to Town & Country of €8Q000,000 which has been flnanced by a flxed rate secured bond issue.
The loan bears interest at a fixed rate of4.665% payable slx-monthly ln January and July, the principal of which is due for repayment in 20 equal instalments from and including 3 January 2036 to end including 3 July 2045.
The Company has the benefit of a financial guarantee from Town & Country for the due and punctual payment of interest and principal.
The bond is secured by a fixed charge over a specified pool of assets of Town & country.
The Company does not undertake financial instrument transactions which are speculative or unrelated to the Company's trading activities.
A description of the principal risks relating to financial instruments and their relevance to the Company and how they are managed is given below.
As noted above, the secured bonds are repayable by 2045. Repayment ofthe interest and principal on the loan to Town & Country is received prior to the interest payment dates and repayment dates of the secured bonds. ln the event of a delay or default in the payment of interest by the borrower, the terms of the secured bonds make it clear that the Company is only obligated to pay interest and capital to Loan Note holders to the extent that amounts have been received from Town & Country.
Although Town & Country ls the only client of the Company, the directors are satisfied that Town & Country will be able to fulfil its obligations.
The Company has no externally imposed caplial requirements and has been set up for the sole purposes of financing loans to Town & Country.
| 20t8 | 2019 | |
|---|---|---|
| €000 | €000 | |
| 50,000 ordinary fl. shares, each a quarter paid | 13 | 1.3 |
The Company issued 50,000 ordinary €1 shares, each a quarter paid, on 1 April 2014, consideration for which was f12,500. The capital of the Company comprises share capital only.
The Company has entered into a loan agreement with Town & Country, an exempt charity registered as a Community Benefit Society. The Company's shares are held by an independent trustee with Town & Country having an option to purchase them. Town & Country met all of the Company's net interest and running costs so that it achieved a break-even position.
ln July 2014, the Company granted an €80 million loan facility to Town & Country of which the amount advanced at the balance sheet date is €67,321k (2018: €7Q821k).
lnterest, commitment fee and reimbursable expenses receivable from Town & Country in the year amounted to f3,739k (2018: f3,744k) of which f922k (2018: €914k) was outstanding at year end.
Under a Trust Deed dated 27 June2Ot4, The Law Debenture lntermediary Corporation plc. acts as share trustee, holding the member's rights on'a discretionary basis for charitable purposes.
Town and Country is the immediate parent entity End controlling party and TCHG Capital PLC'S results are included ln the consolidated Town and Country Housing Group's financial statements. Copies may be obtained from Town and Country Flousing Group, Monson House, 1 Monson Way, Royal Tunbridge Wells TNl lLQ.
From 9 May 2019 the ultimate parent is Peabody Trust, an entity incorporated in Great Britain. Copies of its financial statements can be obtained from the registered office: 45 Westminster Bridge Road, London SE1 7JB
The Company's parent and controlllng entity Town & Country joined the Peabody Group on 9 May 2019. TCHG will continue as an operating subsidiary of the Peabody Trust. There are no changes envisaged for the Company.
The Company's reserves represent cumulative profits and losses, net of dividends pald and other adjustments.
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