TIDMDIL
RNS Number : 0374Y
Damille Investments Limited
15 February 2013
Damille Investments Limited
Half-Yearly
Financial Report
for the period ended 31 December 2012
(Unaudited)
SUMMARY INFORMATION
Company Overview
Damille Investments Limited (LSE:DIL) (the "Company") is a
Guernsey registered, closed-ended investment company incorporated
on 23 March 2010, and admitted to trading on the Specialist Fund
Market of the London Stock Exchange and listed and admitted to
trading on the Channel Islands Stock Exchange on 30 March 2010.
The Company issued 32,500,000 ordinary shares at 100 pence per
share on 30 March 2010 and a further 3,249,000 ordinary shares at
105.5 pence per share on 6 September 2010. All 35,749,000 ordinary
shares in issue rank pari passu.
Investment Objectives and Policy
The Company's investment objective is to realise significant
capital returns for its shareholders by investing in a concentrated
portfolio of equity securities of issuers primarily with an equity
market capitalisation of below GBP100 million that the Company's
executive directors consider can be properly valued using a NAV
valuation basis. In the opinion of the Company, many of these
companies would benefit from implementing certain measures to
optimise their balance sheets and align management and shareholder
interests. Such companies are expected mainly to be, but will not
be limited to, closed-ended investment funds and investment
companies.
The Company has a fixed life of four years from the admission
date of 30 March 2010. Thereafter it is anticipated that the
Company will be wound up.
Distribution and Dividend Policy
The Company aims to provide the Company's shareholders (the
"Shareholders") with an attractive total return, which is expected
to comprise primarily of capital growth, although there is also the
potential for distributions of income to be made throughout the
Company's life.
Return of Capital
The Company firmly intends to return to Shareholders the net
capital proceeds of all profitable realisations from its
investments promptly following their receipt, subject to compliance
with The Companies (Guernsey) Law, 2008, as amended (the "Law")
(including any applicable requirement of the solvency test
contained therein). It is intended that such proceeds would not be
returned to Shareholders until they amount in aggregate to GBP1
million, in order to avoid unnecessary administrative costs. The
Company may choose to realise non-profitable investments in
investee companies and reinvest the relevant funds.
The Company will, in certain circumstances, also have the
ability to make distribution payments out of realised investments
if considered to be in Shareholders' interests, although it is
expected that returns of capital proceeds from investments will be
made through redemptions of new B shares issued to existing
Shareholders by way of bonus issues as and when such proceeds
become available. The Company may also make distributions in
respect of realised investments from funds available following the
reduction of amounts standing to the credit of the Company's
capital reserves from time to time.
Income Distributions
The nature of the Company's investment objective and strategy is
such that the timing and amount of investment income cannot be
predicted. Therefore, there can be no guarantee that dividends will
be paid to Shareholders and, if dividends are paid, as to the
timing and amount of any such dividend. Dividends will, however, be
paid if this is considered to be in the best interests of
Shareholders.
Before recommending any dividend, the Board will consider the
capital position of the Company and the impact on such capital by
virtue of paying that dividend. The Company expects to declare any
dividends in sterling.
As the Company has been granted "reporting fund" status by HM
Revenue & Customs, any United Kingdom resident or ordinarily
resident Shareholders, or any Shareholders who carry on a trade in
the United Kingdom through a branch, agency or permanent
establishment, will be subject to UK income tax or corporation tax
(as appropriate) on the excess of the Company's "reportable income"
for any period of account over any amounts actually distributed by
way of dividend, in addition to such tax on amounts actually
distributed.
CHAIRMAN'S STATEMENT
I have pleasure in presenting the Half-Yearly Financial Report
of Damille Investments Limited for the six month period ended 31
December 2012 (the "Period").
The Company's unaudited Net Asset Value (the "NAV") at the
Period end was GBP20.0 million, or 56.09 pence per share. This is
an increase of 26.31% since launch, after taking account of the 23
pence per share returned to Shareholders during the Period, a total
of 71 pence per share returned since launch to the Period end.
Since the Period end, the Company has announced further returns
of capital amounting to 23.5 pence per share, taking the total
returned to shareholders to date to 94.5 pence per share.
As at the Period end, the Company had fully deployed its capital
and is in realisation mode. The cash position at the Period end was
GBP681,569. A description of the important events that have
occurred during the Period are included in the Investment Report
below.
On behalf of the Board of Directors, I thank all Shareholders
for their support.
David Copperwaite
Chairman
INVESTMENT REPORT
Since launch, the Company has made nineteen investments; five of
which had been exited in full at the Period end and four are
currently notifiable under the Disclosure and Transparency Rules
("DTR"). In all, the Company at the Period end has deployed
approximately 95% of its initial NAV.
In accordance with its Prospectus the Company has returned to
its Shareholders proceeds from the realisation of profitable
investments as well as from the returns of capital received from
its investments, and 71 pence per share had been returned to its
Shareholders by 30 December 2012, of which 23 pence per share was
returned during the Period under review.
Overview of Investments
EIH PLC ("EIH") - represented 11% of Initial NAV
During the period of 20 to 23 April 2010, the Company acquired a
17.6% shareholding in EIH, an Isle of Man registered company whose
shares are admitted to trading on AIM.
At the time the investment was made, EIH held a number of Indian
private equity investments including the largest single Limited
Partnership ("LP") interest in the Evolvence India Fund ("EIF"), a
private equity fund-of-funds, and a smaller LP interest in
Evolvence India Life Sciences Fund, a specialist sector focused
private equity fund. EIH's other investments are interests in RSB
Group, an automotive component manufacturer, and Gland Pharma, a
specialised generic pharmaceuticals company.
On 17 May 2010, Brett Miller, Rhys Davies (as Company
appointees, with their Directors' fees payable to the Company) and
Ramanan Raghavendran, an Independent Director, were appointed to
the Board of Directors of EIH when the entire existing EIH Board
stood down. The EIH Board now consists of Rhys Davies
(Non-Executive Chairman), Brett Miller and Ramanan
Raghavendran.
On 28 June 2010, EIH held an Annual General Meeting at which a
number of resolutions were passed including the adoption of the
following new investment policy:
"EIH shall not make any new investments, save for commitments
already entered into. The Company will actively manage its
investments and seek to realise such investments in a managed way
at an appropriate time, returning proceeds to Shareholders as soon
as practicable. Shareholder returns are expected to be delivered by
way of return of capital on their shares, whether by dividend,
repurchase, tender or otherwise."
EIH's Board of Directors continues to implement a series of
measures which we believe will result in the maximisation of
realisable value for EIH shareholders.
On 27 September 2012, EIH announced, in its interim results,
that the unaudited net asset value per share as at 30 June 2012 was
72.7 cents per share.
EIH has returned 21 cents per share in three separate returns of
capital totalling US$13.65m to its shareholders to date. At the
date of this report the EIH share price was 52 cents per share
compared to the Company's average cost which was approximately 29
cents per share (after adjusting for the 21 cents per share returns
of capital).
Rapid Realisations Fund Limited ("RRF") - represented 13% of
Initial NAV
On 26 May 2010 the Company acquired a 17.3% shareholding in RRF,
a Guernsey registered company whose shares are admitted to trading
on AIM, and immediately thereafter sought to change the investment
strategy and seek board representation.
On 25 June 2010 the Executive Directors were invited to join the
board and as of today's date the board of RRF is comprised of Brett
Miller, Rhys Davies and one independent director. Also on 25 June
2010, the RRF board announced that it had resolved to adopt the
following policies which were subsequently approved by RRF
shareholders via a resolution at the Annual General Meeting of RRF
held on 14 September 2010:
"That the investment objective and policy of the company be
amended to be: "The investment objective of the Company is to
manage the realisation of the Company's investment portfolio and to
maximise the return of invested capital to Shareholders during the
period ending on 30 September 2013. During this period the Company
shall not make any new investments."
To date, GBP41 million (or 71.75 pence per share) has been
returned to RRF shareholders in a series of returns of capital. The
Company's investment in RRF has to date returned an amount of 71.75
pence per share, which compares to the Company's cost of 46 pence
per share. The RRF share price is currently 4 pence per share.
Blackstar Group SE ("BLCK") - represented 19.5% of Initial
NAV
In March 2011, the Company acquired 5,820,000 shares in BLCK
representing approximately 7.78% of the issued share capital of
BLCK. The average price paid was 77.05 pence per share. In February
2012, the Company acquired a further 3,000,000 shares at an average
price of 73.625 pence per share.
On 7 December 2012, BLCK announced that its net asset value per
share as at 30 November 2012 was 100 pence.
On 12 October 2012 the Company submitted a requisition for an
EGM of BLCK to be held so shareholders could vote on two
resolutions - the first resolution called for no new investments to
be made until BLCK tendered for 15% of its issued share capital at
a discount of not more than 10% and the second resolution called
for BLCK to adopt a new distribution policy whereby if the discount
exceeded certain thresholds excess cash is distributed to
shareholders. These resolutions were defeated.
The average cost per BLCK share, taking into account dividends
to date is 71.28 pence. Since the Period end, the Company has
exited its entire investment in BLCK at an average price of 78.7
pence per share before broking commissions.
Loudwater Trust Limited ("LWT") - represented 16.2% of Initial
NAV
On 24 March 2011, the Company acquired 16,650,000 shares in LWT,
representing 27.64% of the issued share capital of LWT. The price
paid was 30 pence per share. On 5 July 2012, the Company acquired a
further 1,000,000 shares at 55.16 pence per share. The Company now
holds 29.3% of the issued share capital of LWT.
LWT's investment policy is to return cash proceeds of all
realisations to investors, subject to the retention of sufficient
cash for follow-on investments in existing portfolio companies
where the Investment Adviser believes further funding is
required.
The Executive Directors of the Company were appointed to the
board of LWT on 20 May 2011. On 27 April 2012, four other directors
of LWT resigned and the board is now comprised of Brett Miller,
Rhys Davies and an independent director.
On 4 July 2012, LWT announced the conditional disposal of its
shareholding in AgraQuest, Inc. ("AgraQuest") to Bayer Cropscience
LLC, a subsidiary of Bayer AG, for an initial cash consideration of
approximately GBP27.3 million or 45.4 pence per LWT share, which
compares to the carrying value of the investment as at 31 March
2012 of GBP6.8 million or 11.3 pence per LWT share and an
investment cost of GBP4.8 million. The initial proceeds from the
disposal of AgraQuest were used by LWT to make a further cash
return to shareholders, including the Company, of 39 pence per
share, which was paid on 10 September 2012.
On 27 November 2012, LWT announced that its unaudited NAV per
share as at 30 September 2012 was 40.14 pence.
The Company's investment in LWT has to date returned an amount
of 53.3 pence per share, which compares to the Company's cost of
31.4 pence per share. The LWT share price is currently 29 pence per
share.
Trinity Capital PLC ("TRC") - represented 12% of Initial NAV
(not notifiable under the DTR)
In October and November 2010, the Company acquired a total of
5,618,000 shares in TRC at an average price of 64.25 pence per
share. On 7 March 2012, the Company acquired a further 3,000,000
shares at an average price of 16 pence per share.
TRC held, and continues to hold, a number of Indian real estate
related investments. During the period TRC announced a return of
capital of 5 pence per share.
TRC's shares were quoted at 11 pence per share at close of
business on 11 February 2013 versus an average cost to the Company
of 9.64 pence per share after adjusting for the 37.8 pence per
share received in returns of capital.
Other Investments - represented 15.5% of Initial NAV
In addition to the above investments, the Company currently
holds nine other investments.
Outlook
The Company will continue to return to its Shareholders the
proceeds from the realisation of profitable investments as well as
from the returns of capital received from its investments. The
Company is firmly in realisation mode and, whilst progress has been
slower than anticipated at EIH, the Executive Directors are
focussed on maximising realisations in as short a timeframe as
possible and expect to make further announcements of capital
returns in the next six months.
Brett Miller Rhys Davies
Executive Director Executive Director
A description of the important events that have occurred during
the Period and their impact on the condensed set of financial
statements is included in the Investment Report. Details of all
related party transactions are given in Note 14. Other than the
information set out in this report, the Board is not aware of any
events during the Period, which would have had a material impact on
the financial position of the Company.
The Board of directors jointly and severally confirm that, to
the best of their knowledge:
(a) The financial statements, prepared in accordance with
International Financial Reporting Standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company; and
(b) This Interim Management Report includes or incorporates by reference:
(i) an indication of important events that have occurred during
the first six months of the financial year and their impact on the
financial statements;
(ii) a description of the principal risks and uncertainties for
the remaining six months of the financial year;
(iii) confirmation that there were no related party transactions
in the first six months of the current financial year that have
materially affected the financial position or the performance of
the Company during that period; and
(iv) changes in the related party transactions described in the
Prospectus that could have a material effect on the financial
position or performance of the Company in the first six months of
the current financial year.
Signed on behalf of the Board of Directors on 15 February
2013.
David Copperwaite Mark Tucker
Chairman Director
DIRECTORS
David Copperwaite: Chairman (Independent Non-Executive)
David Copperwaite retired as the Managing Director of Lloyds
Bank Fund Managers (Guernsey) Limited on 31 December 1997. He is
based in Guernsey and provides consultancy and advisory services to
offshore fund management groups. He is the director of a number of
regional, global, private equity and emerging market investment
funds and has considerable experience in the management and
administration of offshore funds. David is also a non-executive
director of Damille Investments II Limited, a closed-ended
investment company listed on the Specialist Fund Market of the
London Stock Exchange and the Channel Island Stock Exchange.
Mark Tucker: Director (Independent Non-Executive)
Mark Tucker joined HFR Investments, Inc. in Chicago in 1997
where he served as its president and chief executive officer until
2002 when he returned to Jersey. He remained a director and
shareholder of HFR Investments, Inc. until March 2012. Previously,
Mark was head of one of HSBC's retail banking departments in
Jersey, assistant manager of Cater Allen Bank, Jersey and had
business development roles with GNI Limited, one of the founding
members of the LIFFE exchange, and Brody, White and Company, Inc.
and Mitsui & Company in New York. Mark is an Associate of the
Chartered Institute of Bankers, a Chartered Fellow of the Chartered
Securities Institute and a member of the Institute of
Directors.
Richard Prosser: Director (Independent Non-Executive)
Richard Prosser is a Chartered Accountant, a partner of the
Appleby Group and a director of its wholly owned trust company,
Appleby Trust (Jersey) Limited, a corporate and fiduciary
administrator authorised to conduct trust company business in
Jersey. Richard is a director of a number of companies quoted in
London and elsewhere, including property companies, hedge funds and
investment management companies. He is Chairman of Threadneedle
Investments (C.I.) Limited, manager of the Threadneedle Property
Unit Trust; and director of Threadneedle European Property Fund. He
is also Chairman of the Aberdeen Latin American Income Fund, listed
on the Channel Islands Stock Exchange and the London Stock
Exchange, and serves as a non-executive director of Damille
Investments II Limited, a closed-ended investment company listed on
the Specialist Fund Market of the London Stock Exchange and the
Channel Island Stock Exchange.
Brett Miller: Director (Executive)
Brett Miller is a General Partner of Damille Partners, which he
established in October 2008 with Rhys Davies (with each holding a
50% partnership interest). He also serves as executive director of
Damille Partners Limited and Damille Investments II Limited.
Brett serves as a non-executive director of Rapid Realisations
Fund Limited, EIH plc and Loudwater Trust Limited. He is a
non-executive director of Pactolus Hungarian Property plc, an AIM
quoted property fund.
Until its sale to Astaire Securities in July 2009, Brett served
as the Managing Director and key shareholder of Ruegg & Co
Limited, a London-based corporate finance boutique.
Brett graduated from the University of Witwatersrand (South
Africa) with a bachelor's degree majoring in law and economics and
additionally holds a law degree from the London School of Economics
(after having relocated to the United Kingdom in 1988). He joined
Nabarro Nathanson, a London based law firm, in September 1993 where
he qualified as a solicitor and practised until 1997.
Rhys Cathan Davies: Director (Executive)
Rhys Davies is a General Partner of Damille Partners, which he
established in October 2008 with Brett Miller (with each holding a
50% partnership interest). He also serves as executive director of
Damille Partners Limited and Damille Investments II Limited.
Rhys presently serves as Chairman of China Growth Opportunities
Limited, an AIM quoted Guernsey registered investment company in
which Damille Partners holds a 10.2% interest and Damille Partners
Limited holds a 9.3% interest.
Rhys also presently serves as the non-executive Chairman of
Loudwater Trust Limited, Rapid Realisations Fund Limited and EIH
plc. .
Rhys holds the CFA designation, as well as degrees from the
University of Wales, Cardiff and Imperial College of Science,
Technology and Medicine, London.
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 December 2012
Period ended Period ended
31 Dec 2012 31 Dec 2011
Notes GBP GBP
Net movement in unrealised
appreciation / (depreciation)
on investments 7 4,046,821 (4,530,159)
Realised gain on investments 7 3,955,765 971,904
---------------------------------- ---------------------------------
Net gain / (loss) on
investments 8,002,586 (3,558,255)
Operating income 3 404,397 451,518
Performance fee 10 (837,472) 751,607
Operating expenses 4 (323,451) (392,494)
Net gain / (loss) for
the Period attributable
to Shareholders 7,246,060 (2,747,624)
Other Comprehensive income - -
Total Comprehensive Income 7,246,060 (2,747,624)
================================== =================================
Earnings per share for
the Period
- Basic and Diluted 6 0.20 (0.08)
================================== =================================
In arriving at the results for the financial period,
all amounts above relate to continuing operations.
STATEMENT OF FINANCIAL POSITION
as at 31 December 2012
31 Dec 2012 30 June 2012
Notes GBP GBP
NON-CURRENT ASSETS
Financial assets designated
as at fair value through
profit or loss 7 20,298,225 19,559,461
CURRENT ASSETS
Cash and cash equivalents 681,569 1,557,564
Trade and other receivables 8 30,390 23,616
-------------------------------------- ---------------------------
711,959 1,581,180
TOTAL ASSETS 21,010,184 21,140,641
====================================== ===========================
CURRENT LIABILITIES
Trade and other payables 9 121,158 112,877
NON-CURRENT LIABILITIES
Long-term provisions 10 837,472 -
-------------------------------------- ---------------------------
TOTAL LIABILITIES 958,630 112,877
NET ASSETS 20,051,554 21,027,764
====================================== ===========================
EQUITY
Share capital 12 34,273,264 34,273,264
Other reserves (14,221,710) (13,245,500)
TOTAL EQUITY 20,051,554 21,027,764
====================================== ===========================
Net asset value per ordinary
share Pence Pence
based on 35,749,000 shares
in issue 56.09 58.82
====================================== ===========================
The financial statements were approved by the Board of
Directors and authorised for issue on 15 February 2013
and are signed on its behalf by:
David Copperwaite Mark Tucker
Chairman Director
STATEMENT OF CASH FLOWS
for the period ended 31 December 2012
Period
Period ended ended
31 Dec
31 Dec 2012 2011
Notes GBP GBP
OPERATING ACTIVITIES
Net gain / (loss) for
the Period attributable
to Shareholders 7,246,060 (2,747,624)
Unrealised
(appreciation)
/ depreciation on
investments 7 (4,046,821) 4,530,159
Interest received 3 - (1,607)
Increase / (decrease)
in payables 9 8,281 (32,161)
(Increase) / decrease
in receivables 8 (6,774) 13,118
Increase / (decrease)
in provisions 10 837,472 (751,607)
Realised gains on
investments 7 (3,955,765) (971,904)
NET CASH INFLOW FROM OPERATING
ACTIVITIES 82,453 38,374
---------------------------------------- -----------------------------
INVESTING ACTIVITIES
Interest received 3 - 1,607
Purchase of investments 7 (1,168,145) (4,353,941)
Sale of investments 7 913,126 773,520
Returns of capital 7 7,518,841 2,057,565
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES 7,263,822 (1,521,249)
---------------------------------------- -----------------------------
FINANCING ACTIVITIES
Redemption of B shares 12 (8,222,270) (3,574,900)
NET CASH OUTFLOW FROM FINANCING
ACTIVITIES (8,222,270) (3,574,900)
---------------------------------------- -----------------------------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,557,564 10,132,359
Decrease in cash
and cash equivalents (875,995) (5,057,775)
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 681,569 5,074,584
======================================== =============================
STATEMENT OF CHANGES IN EQUITY
for the period ended 31 December 2012
Share Other
Capital Reserves Total
GBP GBP GBP
Balance as at 1 July
2012 34,273,264 (13,245,500) 21,027,764
Net gain for the Period - 7,246,060 7,246,060
Redemption of B shares - (8,222,270) (8,222,270)
Balance as at 31 December
2012 34,273,264 (14,221,710) 20,051,554
================================= ========================== =========================
Share Other
Capital Reserves Total
GBP GBP GBP
Balance as at 1 July
2011 34,273,264 (1,833,115) 32,440,149
Net gain for the period - (4,262,585) (4,262,585)
Redemption of B shares - (7,149,800) (7,149,800)
Balance as at 30 June
2012 34,273,264 (13,245,500) 21,027,764
================================= ========================== =========================
NOTES TO THE FINANCIAL STATEMENTS
for the period ended 31 December 2012
1 GENERAL INFORMATION
Damille Investments Limited is a closed-ended investment
company incorporated in Guernsey on 23 March 2010,
and was admitted to trading on both the Specialist
Fund Market of the London Stock Exchange and the Channel
Islands Stock Exchange on 30 March 2010. The Protection
of Investors (Bailiwick of Guernsey) Law, 1987, consolidated
Damille Investments Limited as an Authorised collective
investment scheme.
The principal activity of the Company is to realise
capital growth from a portfolio of equities and to
generate a significant capital return to Shareholders.
2 ACCOUNTING POLICIES
The significant accounting policies adopted by the
Company are as follows:
(a) Basis of Preparation
The financial statements have been prepared in conformity
with International Financial Reporting Standards ("IFRS")
as adopted by the EU which 'comprise standards and
interpretations approved by the International Accounting
Standards Board ("IASB") and International Financial
Reporting Interpretations Committee ("IFRIC"), together
with applicable Guernsey law. The financial statements
have been prepared on an historical cost basis except
for the measurement at fair value of certain financial
instruments.
Changes in accounting policy and disclosures
The following Standards or Interpretations have been
adopted in the current period. Their adoption has not
had any impact on the amounts reported in these financial
statements and is not expected to have any impact in
future financial statements:
IFRS 7 Financial Instruments: Disclosures (amendments)
IAS 1 Presentation of Financial Statements (amendments)
The following Standards or Interpretations have been
issued by the IASB but not yet adopted by the Company:
IFRS 7 Financial Instruments: Disclosures - Amendments
enhancing disclosures about offsetting of financial
assets and financial liabilities, effective for annual
periods on or after 1 January 2013 and interim periods
within those periods.
IFRS 7 Financial Instruments: Disclosures - Amendments
requiring disclosures about the initial application
of IFRS 9, effective for annual periods on or after
1 January 2015 (or otherwise when IFRS 9 is first applied).
IFRS 9 Financial Instruments - Classification and measurement
of financial assets, effective for annual periods beginning
on or after 1 January 2015 (mandatory application date
amended December 2011).
IFRS 13 Fair Value Measurement - establishes a single
framework for measuring fair value where that is required
by other Standards. The Standard applies to both financial
and non-financial items measured at fair value, effective
for annual periods beginning on or after 1 January
2013.
IAS 32 Financial Instruments Presentation - amendments
to application guidance on the offsetting of financial
assets and financial liabilities, effective for annual
periods beginning on or after 1 January 2014.
IAS 32 Financial Instruments Presentation - amendments
resulting from Annual Improvements cycle effective
for annual periods beginning on or after 1 January
2013.
No formal analysis has been completed on the impact
of the adoption of any of the above standards and interpretations
on the financial statements on the period of initial
application.
(b) Use of estimates and judgements
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates
are revised and in any future periods affected.
Information about significant areas of estimation,
uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the
amount recognised in the financial statements are i)
the calculation of the Company's performance fee and
ii) the classification of investments as level one
of the fair value hierarchy.
The financial statements are expressed in pounds sterling,
which is the functional and presentation currency of
the Company.
(c) Going Concern
The Directors made an assessment of the Company having
adequate resources to continue in operational existence
for the foreseeable future. The Directors believe the
Company is well placed to manage its business risks
successfully despite the current economic climate.
Accordingly, the Directors have adopted the going concern
basis in preparing the financial information.
Taxation
The Company has been granted exemption under the Income
Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 from
Guernsey Income Tax, and is charged an annual fee of
(d) GBP600.
Expenses
(e) All expenses are accounted for on an accruals basis.
(f) Interest and Dividend Income
Interest and dividend income is accounted for on an
accruals basis.
(g) Cash and Cash equivalents
Cash at bank and short term deposits which are held
to maturity are carried at cost. Cash and cash equivalents
are defined as call deposits, short term deposits and
highly liquid investments readily convertible to known
amounts of cash and subject to insignificant risk of
changes in value. For the purposes of the Statement
of Cash Flows, cash and cash equivalents consist of
cash and deposits at bank.
(h) Share Capital issue costs
The share issue costs borne by the Company are recognised
in the Statement of Changes in Equity, as the Company's
ordinary shares are classified as equity under paragraphs
16c and 16d of IAS 32 Financial Instruments: Presentation.
(i) Investments
All investments have been designated as financial assets
"at fair value through profit or loss". Investments
are initially recognised on the date of purchase at
cost, being the fair value of the consideration given,
excluding transaction costs associated with the investment.
After initial recognition, investments are measured
at fair value, with unrealised gains and losses on
investments and impairment of investments recognised
in the Statement of Comprehensive Income.
Investments are derecognised when the rights to cash
flows from the investments have expired or substantially
all risks and rewards of ownership have been transferred.
Upon derecognition any previously recognised unrealised
gain or loss is reversed in the current period's "net
movement in unrealised appreciation on investments"
and recognised in the "realised gain on investments"
along with any additional gain or loss recognised in
the period. In accordance with IFRS the "net gains
on investments" shows the total gain or loss recognised
in the current period.
Commissions paid on the sale or purchase of investments
are recognised in the Statement of Comprehensive Income
as incurred.
Fair value is the amount for which the financial instruments
could be exchanged, or a liability settled, between
knowledgeable willing parties in an arm's length transaction.
Fair value also reflects the credit quality of the
issuers of the financial instruments.
For investments actively traded in organised financial
markets, fair value is determined by reference to
Stock Exchange quoted market bid prices as at the
close of business on the reporting date. If no quoted
market bid price is available at the close of business
on the reporting date, the last available market bid
price is used.
In accordance with IAS 39 Financial Instruments: Recognition
and Measurement, the Company has accounted for the
holdings in EIH plc, Rapid Realisations Fund Limited
and Loudwater Trust Limited at fair value in accordance
with IAS 39, with changes in fair value recognised
in profit or loss, rather than accounting for the
investment as an Associate (IAS 28).
(j) Trade Date Accounting
All "regular way" purchases and sales of financial
assets are recognised on the "trade date", i.e. the
date that the entity commits to purchase or sell the
asset. Regular way purchases or sales are purchases
or sales of financial assets that require delivery
of the asset within the time frame generally established
by regulations or convention in the market place.
(k) Segmental Reporting
The Directors are of the opinion that the Company
is engaged in a single segment of business, being
the investment business and operates solely from Guernsey,
therefore no segmental reporting is provided.
(l) Foreign currency translation
Transactions denominated in foreign currencies are
translated into GBP at the rate of exchange ruling
at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated to
the functional currency at the foreign exchange ruling
at that date. Foreign exchange differences arising
on translation are recognised in the Statement of
Comprehensive Income.
(m) Performance fee
Provision is made for performance fees (Note 10) where
the net asset value plus distributions exceed the
performance fee hurdle. This provision is accrued
throughout the life of the Company but is only payable
as described in Note 15.
3 OPERATING INCOME
Period ended Period ended
31 Dec 2012 31 Dec 2011
GBP GBP
Bank interest - 1,607
Directors fee income 87,288 71,611
Dividend income 317,109 378,300
404,397 451,518
=========================================== ===================================
The Directors B. Miller and R. Davies sit as non-executive
directors on the board of three of the Company's investments:
Rapid Realisation Fund Limited, EIH Plc and Loudwater
Trust Limited. The directors fees shown above are earned
from these positions.
4 OPERATING EXPENSES
Period ended Period ended
31 Dec 2012 31 Dec 2011
Notes GBP GBP
Performance fee accrual 10 837,472 (751,607)
Investment advisory
fees 154,156 201,458
Directors' fees 76,027 75,000
Corporate and shareholder
advisory fees 38,014 37,500
Commissions paid 726 11,905
Administrator's fee 23,071 23,386
Loss on foreign exchange - 8,719
Annual fees 9,332 9,007
Audit fees 7,602 5,992
Directors' and Officers'
insurance 4,055 5,500
Sundry costs 2,165 3,100
Registrar's fee 4,893 4,370
Accountancy fees 3,000 3,033
Custody fees 251 1,421
Legal and professional
fees - 1,600
Bank interest and charges 159 503
Net operating expenses for
the period 1,160,923 (359,113)
=========================================== ==============================
5 DIRECTORS' REMUNERATION
The non-executive Directors are paid GBP15,000 per annum.
In addition to GBP15,000 per annum, Mark Tucker receives
an additional fee of GBP2,500 as Chairman of the audit
committee and David Copperwaite receives an additional
fee of GBP10,000 as Chairman of the Company. The Executive
Directors are each paid GBP46,250 per annum.
6 EARNINGS PER SHARE
Earnings per share is calculated by dividing the net
gain for the period attributable to Shareholders (GBP7,246,060
(Dec 2011: loss GBP2,747,624) by the weighted average
number of shares in issue during the Period (35,749,000
(Dec 2011: 35,749,000). There are no dilutive instruments
and therefore basic and diluted earnings per share are
identical.
7 INVESTMENTS
TOTAL TOTAL
FINANCIAL ASSETS DESIGNATED 31 Dec 2012 30 June 2012
AS AT FAIR VALUE THROUGH
PROFIT OR LOSS GBP GBP
Opening portfolio cost 17,555,670 14,248,090
Additions - cost 1,168,145 7,042,691
Returns of capital (7,518,841) (3,893,685)
Sales (913,126) (1,990,242)
Unrealised appreciation
on valuation brought forward 2,003,791 8,942,250
Realised gain on investments 3,955,765 2,148,816
Unrealised appreciation
/ (depreciation) on valuation
for the period 4,046,821 (6,938,459)
Closing valuation 20,298,225 19,559,461
============================================= ==========================================
Closing portfolio cost 14,247,613 17,555,670
--------------------------------------------- ------------------------------------------
Unrealised appreciation
on valuation carried forward 6,050,612 2,003,791
--------------------------------------------- ------------------------------------------
IFRS 7 requires the fair value of investments to be
disclosed by the source of inputs, using a three-level
hierarchy as detailed below:
Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1);
Inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices)
(Level 2);
Inputs for the asset or liability that are not based
on observable market data (unobservable inputs) (Level
3).
All investments held by the Company have been classified
as Level 1 in accordance with the fair value hierarchy.
Since launch, the Company acquired significant holdings
in a number of investments. The extent of the holdings
is explained in the Investment Report. In four of
these investments (EIH, RRF, BLCK and LWT) the Company's
holding is large in absolute terms and relative to
the level of trading reported on the London Stock
Exchange. In common with large holdings of relatively
illiquid securities, the amount that could be realised
from a disposal of these holdings at the reporting
date could be at a significant discount or premium
to the fair value. In view of the size of the holdings
and the relative apparent liquidity it is not possible
to quantify the size of the potential premium or discount.
8 TRADE AND OTHER RECEIVABLES
31 Dec 2012 30 June 2012
GBP GBP
Prepayments and accrued income 30,390 23,616
================================================ =================================
The above carrying value of receivables is equivalent
to its fair value.
9 TRADE AND OTHER PAYABLES
(amounts falling due within
one year) 31 Dec 2012 30 June 2012
GBP GBP
Accrued expenses 32,962 37,068
Trade creditors 88,196 75,809
121,158 112,877
================================================ =================================
The above carrying value of payables is equivalent
to its fair value.
10 PROVISIONS
31 Dec 2012 30 June 2012
GBP GBP
Provisions brought forward - 751,607
Movements in provisions for
the period 837,472 (751,607)
Provisions as at 31 December
2012 837,472 -
================================================ =================================
The provisions in the comparative period relate to
an obligation that the Company had to pay a performance
fee (see Note 15).
RECONCILIATION OF NET ASSET VALUE PER VALUATION TO
11 NET ASSET VALUE PER FINANCIAL STATEMENTS
31 Dec 2012 31 Dec 2012
NAV per share
NAV GBP GBP
Net Asset Value as
per Valuation 20,889,026 58.43
Adjustment for
performance
fee (837,472) (2.34)
Net Asset Value as per Financial
Statements 20,051,554 56.09
---------------------------------- ----------------------------------
12 SHARE CAPITAL
Authorised SHARES GBP
Unlimited number of ordinary
shares of no par value Unlimited -
Unlimited number of B shares
of no par value Unlimited -
================================== =================================
Issued
Date of issue SHARES GBP
Ordinary Shares
30 March 2010 32,500,000 32,500,000
7 September 2010 3,249,000 3,427,695
Share issue costs - (1,654,431)
Shares in issue as at 31 December
2012 35,749,000 34,273,264
================================== =================================
B Shares
Total distributions at 1 July
2012 - (17,159,520)
Bonus issue 28 September
2012 35,749,000 -
Redemption 28 September
2012 (35,749,000) (7,149,800)
Bonus issue 30 November
2012 35,749,000 -
Redemption 30 November
2012 (35,749,000) (1,072,470)
---------------------------------- ---------------------------------
- (8,222,270)
Accumulated distributions as
at 31 December 2012 - (25,381,790)
================================== =================================
Shareholders are entitled to receive, and participate
in; any dividends out of income; other distributions
of the Company available for such purposes and resolved
to be distributed in respect of any accounting period;
or other income or right to participate therein.
On a winding up, Shareholders are entitled to the
surplus assets remaining after payment of all the
creditors of the Company.
Ordinary Shareholders also have the right to receive
notice of and to attend, speak and vote at general
meetings of the Company and each Member being present
in person or by proxy or by a duly authorised representative
at a meeting shall upon a show of hands have one vote
and upon a poll each such holder present in person
or by proxy or by a duly authorised representative
shall have one vote in respect of every ordinary share
held by him.
Holders of B shares are not entitled to receive or
participate in; any dividends out of income; other
distributions of the Company available for such purposes
and resolved to be distributed in respect of any accounting
period; or other income or right to participate therein.
On a winding up, B shareholders are not entitled to
any surplus assets remaining after payment of all
the creditors of the Company. B shares are redeemed
at the option of the Company.
On 28 September 2012, the Company issued 35,749,000
B shares to existing holders of Ordinary shares on
a ratio of 1 B share for every 1 ordinary share held.
The B shares were then immediately redeemed by the
Company on a pro rata basis at 20 pence per share.
On 30 November 2012, the Company issued 35,749,000
B shares to existing holders of ordinary shares on
a ratio of 1 B share for every 1 ordinary share held.
These B shares were then immediately redeemed by the
Company on a pro rata basis at 3 pence per share.
13 FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
Cash and cash equivalents that arise directly from
(a) the Company's operations; and
(b) Quoted investment securities.
FINANCIAL RISK MANAGEMENT OBJECTIVES
14 AND POLICIES
The main risks arising from the Company's financial
instruments are market price risk, credit risk, liquidity
risk, interest rate risk, and capital management risk.
The Board regularly review and agrees policies for
managing each of these risks and these are summarised
below:
(a) Market Price Risk
Market price risk arises mainly from uncertainty about
future prices of financial instruments held. It represents
the potential loss the Company might suffer through
holding market positions in the face of price movements.
The Executive Directors actively monitor market prices
and report to the Board as to the appropriateness
of the prices used for valuation purposes.
If the value of the Company's investment portfolio
were to increase by 30%, it would represent a gain
of GBP6,089,468 (Jun 2012: GBP5,867,838) and this
would cause the net asset value of the Company to
rise by 30.37% (Jun 2012: 27.91%).
If the value of the Company's investment portfolio
were to decrease by 30%, it would represent a decrease
of GBP6,089,468 (Jun 2012: GBP5,867,838) and this
would cause the net asset value of the Company to
fall by 30.37% (Jun 2012: 27.91%).
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty
will be unable or unwilling to meet a commitment
that it has entered into with the Company. The Directors
receive financial information on a regular basis
which is used to identify and monitor risk.
It is Company policy not to invest more than 20%
of the net asset value of the Company as at the date
of admission in the securities of any one company
or group at the time the investment is made.
The Company has a significant concentration of credit
risk, with exposure of its cash balances held in
only one bank, being Barclays Private Client International
Limited (Barclays). At 31 December 2012, the Company's
exposure to this credit risk was GBP681,569 (Jun
2012: GBP1,557,564), which represents 3.24% (Jun
2012: 7.37%) of the gross assets of the Company.
The Standard & Poor's credit rating of Barclays was
A as at the date of this report.
Investors should be aware that the prospective returns
to Shareholders mirror the returns under the investments
held or entered into by the Company and that any
default by an issuer of any such investment held
by the Company would have a consequential adverse
effect on the ability of the Company to pay some
or all of the entitlement to Shareholders. Such a
default might, for example, arise on the insolvency
of an issuer of an investment.
The Company's financial assets exposed
to credit risk are as follows:
30 June
31 Dec 2012 2012
GBP GBP
Financial assets designated
as at fair value through profit
or loss 20,298,225 19,559,461
Cash and cash equivalents 681,569 1,557,564
Trade and other receivables 30,390 23,616
21,010,184 21,140,641
============================ =============================
The Company is exposed to credit risk in respect of
its cash and cash equivalents, arising from possible
default of the relevant counterparty, with a maximum
exposure equal to the carrying value of those assets.
The credit risk on liquid funds is mitigated because
the counterparties are banks with high credit ratings
assigned by international credit-rating agencies. The
Company monitors the placement of cash balances on
an on-going basis.
The investments of the Company are held in custody
by Anson Custody Limited. Bankruptcy or insolvency
of the Custodian may cause the Company's rights with
respect to investments held by the Custodian to be
delayed. Investments held with Anson Custody Limited
are held in a Crest account maintained by Anson Registrars
Limited in a sub-account designated exclusively for
the Company. This ensures that the investments are
ring fenced and will be protected should the Custodian
become bankrupt or insolvent.
(c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter
difficulty in realising assets or otherwise raising
funds to meet financial commitments. The Company's
main financial commitment is its on-going operating
expenses.
The Executive Directors ensure that the Company has
sufficient liquid resources available to fulfil its
operational plans to meet its financial obligations
as they fall due.
The table below details the residual contractual maturities
of financial liabilities:
Over 1
As at 31 December 2012 1-3 months year
GBP GBP
Accrued expenses 32,962 -
Trade creditors 88,196 -
121,158 -
=================================== =================================
Over 1
As at 30 June 2012 1-3 months year
GBP GBP
Accrued expenses 37,068 -
Trade creditors 75,809 -
112,877 -
=================================== =================================
(d) Interest Rate Risk
The Company holds cash in a bank account, the return
on which is subject to fluctuations in market interest
rates. Other than cash and cash equivalents, none of
the assets or liabilities of the Company attract or
incur interest.
The following table details the Company's exposure
to interest rate risks:
As at 31 December
2012:
Floating Fixed
Less than 1-3 months Non-interest
1 month bearing Total
GBP GBP GBP GBP
Assets
Designated as at
fair
value through profit
or loss on initial
recognition:
Investments - - 20,298,225 20,298,225
Loans and
receivables:
Trade and other
receivables - - 30,390 30,390
Cash and cash
equivalents 681,569 - - 681,569
------------------------ ------------------------ ---------------------------- ---------------------------------
Total Assets 681,569 - 20,328,615 21,010,184
======================== ======================== ============================ =================================
Liabilities
Financial
liabilities
measured at
amortised
cost:
Accrued expenses - - 32,962 32,962
Trade creditors - - 88,196 88,196
------------------------ ------------------------ ---------------------------- ---------------------------------
Total Liabilities - - 121,158 121,158
======================== ======================== ============================ =================================
Total interest
sensitivity
gap 681,569
------------------------
As at 30 June 2012:
Floating Fixed
Less than 1-3 months Non-interest
1 month bearing Total
GBP GBP GBP GBP
Assets
Designated as at fair
value through profit
or loss on initial
recognition:
Investments - - 19,559,461 19,559,461
Loans and
receivables:
Trade and other
receivables - - 23,616 23,616
Cash and cash
equivalents 1,557,564 - - 1,557,564
-------------------- ---------------------- ------------------------------- ---------------------------
Total Assets 1,557,564 - 19,583,077 21,140,641
==================== ====================== =============================== ===========================
Liabilities
Financial liabilities
measured at amortised
cost:
Accrued expenses - - 37,068 37,068
Trade creditors - - 75,809 75,809
-------------------- ---------------------- ------------------------------- ---------------------------
Total Liabilities - - 112,877 112,877
==================== ====================== =============================== ===========================
Total interest
sensitivity
gap 1,557,564
--------------------
Interest rate
sensitivity
If interest rates had been 25 basis points higher and
all other variables were held constant, the Company's
net gain attributable to Shareholders for the period
ended 31 December 2012 would have increased by approximately
GBP852 (Jun 2012: GBP3,894) or 0.01% (Jun 2012: 0.02%)
of Net Assets due to an increase in the amount of interest
receivable on the bank balances.
If interest rates had been 25 basis points lower and
all other variables were held constant, the Company's
net gain attributable to shareholders for the period
ended 31 December 2012 would have decreased by approximately
GBP852 (Jun 2012: GBP3,894) or 0.01% (Jun 2012: 0.02%)
of Net Assets due to a decrease in the amount of interest
receivable on the bank balances.
(e) Capital Management
The investment objective of the Company is to provide Shareholders
with attractive long term returns, expected to be in the
form of capital, through a diversified portfolio.
As the Company's ordinary shares are traded on the Specialist
Fund Market of the London Stock Exchange ("SFM"), the ordinary
shares may trade at a discount to their Net Asset Value
per share. However, in structuring the Company, the Directors
have given detailed consideration to the discount risk and
have Shareholder authority to purchase in the market up
to 14.99% of the Shares in issue from time to time. The
Directors seek annual renewal of this authority from Shareholders
at each annual general meeting of the Company.
The Company monitors capital on the basis of the carrying
amount of equity as presented on the face of the Statement
of Financial Position.
There are no external requirements for the Company to maintain
a minimum level of capital.
15 RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
The Company is provided with investment advice by Damille
Partners Limited (the "Service Provider"), which owns 518,957
shares (1.45%) in Damille Investments Limited.
Under the Services Agreement, Damille Partners Limited is
entitled to receive fees of the greater of 1.45% per annum
of the Company's Net Asset Value or GBP150,000 per annum.
During the Period the Company incurred GBP154,156 (Dec 2011:
GBP201,458) of fees, of which GBP77,792 (Jun 2012: GBP75,809)
was outstanding at the Period end and included within trade
and other payables.
The Service Provider is also entitled to receive a performance
fee (the "Performance Fee"). The Performance Fee will only
become payable once aggregate Distributions have been made
to the Company's Shareholders equal to: (a) the aggregate
amounts subscribed for shares in the Company on their initial
date of issue; and (b) such amount as is equal to an 8%
per annum compound return on such aggregate subscriptions
to the point that the relevant distribution is made (the
"Performance Fee Hurdle"). The Company will pay the Service
Provider a Performance Fee of 20% of all Distributions made
on or following the date on which the Performance Fee Hurdle
is achieved.
At 31 December 2012, a Performance Fee totalling GBP837,472
(Jun 2012: GBPnil) has been provided (Note 10). Of this
amount, GBP711,851 (Jun 2012: GBPnil) would be due to the
Service Provider.
Nimrod Capital LLP is the Company's Corporate and Shareholder
Advisory Agent and is entitled to receive fees of 0.20%
of the Company's Net Asset Value per annum. In addition,
Nimrod Capital LLP will receive 15% of the Performance Fee
as calculated above. At 31 December 2012, of the total Performance
Fee provided of GBP837,472, an amount of GBP125,621 (Jun
2012: GBPnil) would be due to Nimrod Capital LLP. The minimum
annual total fees payable to Nimrod Capital LLP is GBP75,000.
During the Period the Company incurred GBP38,014 (Dec 2011:
GBP37,500) of costs of which GBP19,059 (Jun 2012: GBP18,545)
was outstanding at the Period end and included within accrued
expenses.
16 EVENTS AFTER THE BALANCE SHEET DATE
On 4 February 2013, the Distribution Committee resolved to
return to the Shareholders 11p per share by way of a bonus issue of
B shares to Shareholders on the Company's register on 11 February
2013. The Company's shares will be marked as ex-dividend on 13
February 2013.
Following their issue the B Shares will be immediately redeemed
by the Company on a pro-rata basis. The redemptions will have a
settlement date of 20 February 2013.
On 11 February 2013, the Distribution Committee resolved to
return to the Shareholders 12.5p per share by way of a bonus issue
of B shares to Shareholders on the Company's register on 18
February 2013. The Company's shares will be marked as ex-dividend
on 20 February 2013.
Following their issue the B Shares will be immediately redeemed
by the Company on a pro-rata basis. The redemptions will have a
settlement date of 27 February 2013.
Damille Investments Limited
ADVISORS & CONTACT INFORMATION
Key Information
Exchange
Ticker
Listing Date
Fiscal Year End
Base Currency
ISIN
SEDOL
Country of Incorporation
Management and Administration
Registered Office
Damille Investments Limited
Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey GY1 1EJ
Consultancy Service Provider
Damille Partners Limited
Blenheim Trust (BVI) Limited
PO Box 3483
Road Town
Tortola
British Virgin Islands
Placing and Corporate and Shareholder Advisory Agent
Nimrod Capital LLP
3 St Helen's Place
London EC3A 6AB
Custodian
Anson Custody Limited
PO Box 405, Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey GY1 3GF
Specialist Fund Market of the LSE/ CISX
DIL
30 March 2010
30 June
GBP
GG00B3RJKL13
B3RJKL1 (SFM) / B3TXR54 (CISX)
Guernsey - Registration number 51647
Company Secretary and Administrator
Anson Fund Managers Limited
PO Box 405, Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey GY1 3GF
Registrar
Anson Registrars Limited
PO Box 426, Anson Place
Mill Court, La Charroterie
St Peter Port
Guernsey GY1 3WX
Auditor
Ernst & Young LLP
PO Box 9
Royal Chambers, St Julian's Avenue
St Peter Port
Guernsey GY1 4AF
This information is provided by RNS
The company news service from the London Stock Exchange
END
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