TIDMTCF
RNS Number : 9128V
Terra Catalyst Fund
19 December 2013
19 December 2013
TERRA CATALYST FUND
(the "Company")
Interim Financial Statements
Terra Catalyst Fund (AIM:TCF) announces its Unaudited Interim
Financial Statements for the six months to 30 September 2013 (the
"Interim Financial Statements").
The full text of the Interim Financial Statements is set out
below.
-Ends-
ENQUIRIES TO:
Terra Catalyst Fund
Mike Haxby, Director
www.terracatalystfund.com
Tel: +44 (0)1624 690 900
Smith & Williamson Corporate Finance Limited
Azhic Basirov / Siobhan Sergeant
Tel: +44 (0)20 7131 4000
Investment Manager's Report
For the six months ended 30(th) September 2013
Net Asset Value ("NAV") summary
The NAV per share of Terra Catalyst Fund ("TCF" or "the
Company") at the reporting date was 86.4p. Following the return of
cash by way of a compulsory redemption of shares at 49.5p per share
in October, the NAV per share was 96.2p at 31(st) October 2013.
Portfolio Review and Investment Activity
As at 30(th) September 2013, TCF's key holdings were as
follows:
TCF Holdings GBPm % Portfolio % shares held
by Laxey Partners
and funds under
its discretionary
management
---------------------------- ----- ------------ -------------------
Spazio Investment NV 12.7 79% 72.4%
---------------------------- ----- ------------ -------------------
Tamar European Ind Fund 3.4 21% 29.8%
---------------------------- ----- ------------ -------------------
Other 0.0 0% n/a
---------------------------- ----- ------------ -------------------
Total Investments 16.1 100%
---------------------------- ----- ------------ -------------------
Cash/ (borrowings) & other
assets/ (liabilities) 3.0
---------------------------- ----- ------------ -------------------
Net assets 19.1
---------------------------- ----- ------------ -------------------
Following further progress in realising the investments of the
Company, there are now only two major positions left, as detailed
above. Both are in realisation mode, however there have recently
been significant changes to the debt terms for the Spazio
Investment NV ("Spazio NV") Italian sub-fund, Spazio Industriale
Fund ("Spazio Industriale") which, in conjunction with a weak
Italian property market, means that shareholders in TCF should not
expect significant cash distributions from Spazio NV in the short
to medium term.
Review of Major Holdings
Spazio Investment NV ("Spazio NV")
Key Facts
-- The externally appraised NAV per share of Spazio NV at 30(th)
June 2013 was EUR6.97 compared to a carrying value in the portfolio
of TCF of EUR2.47 per share
-- Total portfolio of 172 assets with an open market value of EUR362m at 30(th) June 2013
-- The net loan to value ratio was 54.2% at 30(th) June 2013
Strategy
Following the re-negotiation of the bank debt and the
introduction of a new manager, being IDeA FIMIT sgr, Spazio
Industriale's strategy is absolutely clear, it is working hard to
maximise the value of the portfolio by:
1) Investing in assets where necessary to create and maintain
the property that tenants want to lease. This is crucial to attract
and retain the types of quality tenants who are willing and able to
sign long leases. This has recently led to a major lease being
renewed in Milan for one of the largest assets, and may lead to a
major extension of leases with Telecom Italia.
2) Carrying out redevelopment of property and sites to create
maximum value. While the market is currently somewhat weak, the
process can be protracted, and suitable town planning permits need
to be obtained and work performed before the sites can be sold or
leased. Having carried out extensive work on a large logistics
asset near Rome the manager expects this to be leased shortly,
enabling Spazio Industriale to market a long leased asset in a
supply constrained area.
3) Continuing to market assets to potential buyers and sell them
with a pragmatic view on their appraised values. Spazio Industriale
is currently in a cash trap, and the bank requires paying down of
Portogruaro debt, and the fulfilment of other conditions, before
distributions can be made to shareholders. At this time, the
manager does not expect the volume of sales to be sufficient to
return cash to shareholders in the short to medium term.
4) Continuing to review the cost structure and debt terms to
attempt, where possible, to maximise returns. This process is
largely now complete, and the manager believes it will result in
savings on costs in many areas and better service provision in the
Spazio Industriale's core activities. Spazio Industriale has very
cheap debt, details of which are described below. The manager sees
this as a very significant event for Spazio NV, and in the current
banking environment in Italy this is a hugely pleasing achievement
allowing Spazio Industriale to finance the portfolio at very low
rates. The banking sector in Italy remains heavily stressed and
problems are not even close to having been fully addressed, as has
started to happen in parts of Northern Europe.
5) Spazio Industriale is still trying to sell assets. Total
sales were EUR112m in 2010, EUR73m in 2011 and EUR33m in 2012.
These volumes reflect the large contraction observed in the Italian
market in terms of total transaction volume. Spazio Industriale has
sold assets at an average discount to valuation of 6.5% in 2010,
11.3% in 2011 and 10.2% in 2012. So far it has only turned down
sales where the equity release has been so small because of the
discount and required debt repayment that selling such an asset
made no sense. It has become harder to sell assets and there is no
expectation that the total for 2013 will be as great as for
2012.
Portfolio
According to an independent valuation at 31(st) March 2013,
Spazio Industriale had EUR84m of development property, EUR80m of
which is at Portogruaro and which currently has minimal rental
income. EUR54m of this is undeveloped land. There were EUR282m of
existing buildings, of which EUR147m is Telecom Italia, and another
EUR63m income producing. EUR72m is vacant, or shortly will be, and
must be redeveloped and let, or sold.
Property currently under redevelopment is taking up a lot of the
manager's time and energy. The manager hopes and expects to see
some rewards from this in terms of new rental income and also sales
proceeds. There is value in many of these sites as redevelopments.
However, in general, the market for development land is currently
depressed, especially for residential. Sites suitable for retail
development are more interesting and progress is being made with
these. A large recently refurbished logistics warehouse near Rome
is attracting good levels of interest and the manager expects to
let this asset shortly.
The manager does not consider the land at Portogruaro to be that
saleable at present and, in any case, it cannot be sold unless a
sensible write off is taken. The manager continues to try to sell
the existing buildings and anticipate there may be interest in the
logistics building there, although this is not yet fully let. A
small asset in this location was sold at a discount to appraised
valuation in excess of 40%.
In a difficult environment for selling development assets, the
sales focus has inevitably been on selling leased assets and, due
to the banking crisis in Italy and the subsequent difficulties of
obtaining bank debt, investors are looking for longer leased, safe
assets on which banks are willing to lend.
What Spazio Industriale is aiming to achieve where possible is
to create long term leases to quality tenants. The manager
anticipates this should be possible on over EUR200m worth of
property within the next year, depending on a lease extension being
agreed with Telecom Italia. If it is possible to sell this property
at attractive pricing once this has been achieved, Spazio
Industriale will do so.
The manager does not currently see a material improvement in the
market for the Spazio Industriale properties and indeed, in the
wider Italian market, sales had until recently stopped almost
completely, with recent sales representing bottom fishing by
international funds which do not require debt. As recent examples,
the liquidating German open ended fund Degi Europa sold two assets
in mid-2013, to Axa and Blackstone respectively. The first was a
good quality, long let office in Milan, which was sold for
EUR63.9m, representing a yield of 10.7%. The second is a recently
built retail outlet park asset, which has been performing well.
This was sold on a yield of 9.8%, for a total value of EUR126m.
Such yields do not imply satisfactory values for the portfolio
of Spazio Industriale, and while the manager does not anticipate
the situation will improve over time, there has been no chance of
selling assets recently at prices considered attractive. Discounts
of up to 15% of appraised value have generally been considered
acceptable, with larger discounts accepted for more problematic
assets. Various agents have been working with decent incentives and
fees payable in case of sales, but they have been unable to deliver
high volumes of sales due to the state of the market.
Bank debt
On 14(th) May 2013, a term sheet was signed with the lending
banks to extend the debt expiring in October 2013. Both facilities
will carry a cost of 250 basis points above 3 month EURIBOR, and
there was an upfront fee of 50 basis points.
Given the conditions currently prevailing in the market, the
directors of Spazio NV are satisfied with cost of the new debt
negotiated at Spazio Industriale, which has now been hedged.
Accordingly the debt structure of Spazio Industriale is now
shown below, and means that there is a meaningful reduction in
interest expenses.
Jumbo Loan - EUR182.3m fixed until 31st October 2016 at an all
in cost of 3.27%
EGP Loan - EUR43.7m fixed until 31st October 2015 at an all in
cost of 3.1%
As a result of the new debt terms and the cash sweeps in place,
from October 2013 there will not be any free cash for distributions
from Spazio Industriale up to Spazio NV without substantial
property sales. Even when Spazio Industriale is in a position where
some of the sales proceeds are available to Spazio NV, the
proportion will be lower than previously. Spazio NV has managed to
return EUR3.38 per share to shareholders to date, or 66% of the bid
price, but shareholders in TCF should not expect further returns in
the short to medium term.
Substitute tax
This relates to a retrospective change in the Italian tax regime
with respect to the taxation of Italian real estate funds. A new
law was introduced in July 2011 and then subsequently clarified by
an additional regulation in December 2011 and a statement in
February 2012 regarding certain tax exemption conditions. In
summary, the new legislation requires the payment of a one-off 5%
of the average 2010 NAV "substitute tax" for certain classes of
unitholder of Italian real estate funds and is applied
retrospectively. After having obtained advice from their Italian
tax and legal advisors, the directors of Spazio NV concluded that
the holding company structure of Spazio NV means that Spazio
Industriale qualifies for an exemption from this "substitute tax"
under the best available interpretation of the legislation.
Guardia di finanza fiscal audit
This relates to an investigation by the Italian tax authorities
into the tax residency of Spazio NV during the years 2006 to 2009,
resulting in the Italian tax authorities alleging that Spazio NV
had its place of effective management and/or main business purpose
in Italy and hence is liable to taxation as an Italian-resident
corporation. The directors of Spazio NV, together with their
Italian tax lawyers, have reviewed the details of the allegations
made and do not accept that the analysis presented is correct.
After obtaining advice from their Italian tax advisors, the
directors of Spazio NV have concluded that no provision is
appropriate.
We are not able to predict the outcome at this point. Further
information on Spazio NV's activities, financial position and tax
disputes is available at www.spazioinvestment.com.
Tamar European Industrial Fund ("TEIF")
TEIF has continued to sell assets, and we expect the company to
announce further disposals in their full year results, to 31(st)
December 2013. The adjusted NAV was 61.6p at 30(th) June 2013,
while the share price was 29.5p.
The portfolio is now largely in France (59%), with most of the
remainder in Belgium (18%), Germany (12%) and Sweden (8%). The
liquidity in those markets will dictate the pace of cash returns to
shareholders, but we note that liquidity does seem in general to be
improving.
Review Report by KPMG Audit LLC to Terra Catalyst Fund
For the six months ended 30(th) September 2013
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly report for the six
months ended 30(th) September 2013, which comprises the Statement
of Comprehensive Income, the Statement of Financial Position, the
Statement of Changes in Equity, the Statement of Cash Flows and the
related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the Company those matters we are required to state
to it in this 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 for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for
preparing the half-yearly report in accordance with the AIM
Rules.
The annual financial statements of the Company are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly report has been
prepared in accordance with IAS 34 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly report for the six months ended 30(th) September
2013 is not prepared, in all material respects, in accordance with
IAS 34 and the AIM Rules.
Emphasis of matter - valuation of investment in Spazio
Investment NV
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosures made
in note 7 to the financial statements concerning the valuation of
the interest in shares of Spazio Investment NV of GBP12,653,515.
This is stated at Directors' valuation, with the advice of the
Investment Manager, in the absence of a readily ascertainable
market value. Due to the inherent uncertainty associated with the
determination of the valuation, the amount realised on its disposal
may differ materially from the amount at which it is stated in the
financial statements. The impact of such uncertainty cannot be
quantified.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
18 December 2013
Statement of Comprehensive Income
For the six months ended 30(th) September 2013
(Note 5)
(Unaudited) (Unaudited)
2013
2012
Notes GBP GBP
Income
Distributions on long equity securities
and investment funds 161,813 4,644,735
Interest
- Cash balances 6,188 307
Net realised gains/(losses) on financial
assets and liabilities
at fair value through profit or loss
- Cash balances 11,145 (209,758)
- Equities and Funds (4,061,224) (2,648,409)
- Derivatives - (45,742)
- Forwards (175,252) 1,799,187
Net unrealised (losses) / gains on financial
assets and liabilities
other than currency forwards at fair value
through profit or loss
- Cash balances (4,273) (20,206)
- Equities and Funds 4,534,291 (3,422,268)
- Derivatives - 61,558
Net unrealised losses on currency forwards
at fair value through profit or loss (3,799) (169,390)
Total net investment income /(expense) 468,889 (9,986)
------------ ------------
Expenses
Investment management fee 13,14 269,152 163,410
Administration fees 17,134 55,164
Audit fees 15,784 7,999
Other expenses 6 279,859 330,501
Interest expense
- Cash balances 28 25,547
Total expenses 581,957 582,621
------------ ------------
Loss for the period (113,068) (592,607)
------------ ------------
Other comprehensive income - -
Total comprehensive loss for the period (113,068) (592,607)
============ ============
Loss per ordinary share
Basic and fully diluted 10 (GBP0.01) (GBP 0.01)
------------ ------------
The notes are an integral part of these interim financial
statements.
Statement of Financial Position
As at 30(th) September 2013
(Note 5)
(Unaudited) (Audited)
2013 2012
Note GBP GBP
Current Assets
Cash at bank and brokers 3,205,873 3,016,238
Equities - long at fair value through profit
or loss 7 12,686,618 15,548,305
Investment funds - long at fair value through
profit or loss 7 3,381,490 4,824,027
Amounts receivable on currency forwards - 3,796
Amounts due for outstanding sale settlements - 11,908
Other debtors and accrued income 2,757 4,440
Total Assets 19,276,738 23,408,714
============== =============
Equity
Share capital 8 221,503 305,227
Share premium 57,418,740 61,335,332
Retained losses (38,504,477) (38,391,409)
-------------- -------------
Total Equity 19,135,766 23,249,150
-------------- -------------
Liabilities
Overdrawn balances at brokers 630 64
Amounts payable on currency forwards 2 -
Other creditors and accrued expenses 140,340 159,500
-------------- -------------
Total liabilities 140,972 159,564
Total liabilities and equity 19,276,738 23,408,714
============== =============
Net asset value per ordinary share 9 0.86 0.76
============== =============
These interim financial statements were approved and authorised
by the Board of Directors on 12 December 2013 and are signed on
their behalf by:
Mike Haxby Robert Ware
Director Director
The notes are an integral part of these interim financial
statements.
Statement of Changes in Equity
For the six months ended 30(th) September 2013
Share Share Retained
Capital Premium losses Total
GBP GBP GBP GBP
Balance at 1(st) April 2012 958,576 98,252,523 (36,386,245) 62,824,854
Total comprehensive income
Loss for the period - - (592,607) (592,607)
Transaction with owners recorded
directly
in equity:
Contributions by and distributions
to owners
Distribution - (1,917,151) - (1,917,151)
Balance at 30(th) September
2012 958,576 96,335,372 (36,978,852) 60,315,096
========= ============ ============== ============
Share Share Retained
Capital Premium losses Total
GBP GBP GBP GBP
Balance at 1(st) April 2013 305,227 61,335,332 (38,391,409) 23,249,150
Total comprehensive income
Loss for the period - - (113,068) (113,068)
Transaction with owners recorded
directly
in equity:
Contributions by and distributions
to owners
Repurchase of shares (83,724) (3,916,592) - (4,000,316)
Balance at 30(th) September
2013 221,503 57,418,740 (38,504,477) 19,135,766
========= ============ ============== ============
The notes are an integral part of these interim financial
statements.
Statement of Cash Flows
For the six months ended 30(th) September 2013
(Note 5)
(Unaudited) (Unaudited)
2013 2012
GBP GBP
Cash flows from operating activities:
Dividends received 161,813 4,678,935
Interest received 6,116 307
Prepaid expenses 1,756 (48)
Management fee paid (277,117) (156,397)
Administration fee paid (17,396) (56,783)
Other expenses paid (306,576) (387,126)
Interest paid (28) (36,289)
Decrease in cash held as margin - 1,770
Purchase of investments - (1,079,921)
Proceeds from sales of investments 4,620,817 10,079,317
Net cash flow from operating activities 4,189,385 13,043,765
------------ --------------
Cash flows from financing activities:
Distribution paid (4,000,316) (1,917,151)
Net cash flow from financing activities (4,000,316) (1,917,151)
------------ --------------
Increase in cash and cash equivalents 189,069 11,126,614
============ ==============
Opening cash and cash equivalents 3,016,174 (2,451,773)
Closing cash and cash equivalents 3,205,243 8,674,841
============ ==============
The notes are an integral part of these interim financial
statements.
Notes to the unaudited interim financial statements
For the six months ended 30(th) September 2013
1. General
The Company was incorporated in the Cayman Islands on 21(st)
December 2007 and its shares were admitted to AIM, a market
operated by London Stock Exchange plc, on 25(th) February 2008.
At the Annual General Meeting of TCF held on 25(th) September
2012 a new investing policy was adopted:
The Company's investment objective and policy is to seek
realisation of its portfolio of investments in the ordinary course
of business and, subject to retaining sufficient cash to meet
operating costs and liabilities, to return the net proceeds of all
such realisations to Shareholders on a periodic basis, following
which the Company will be wound-up. The Company will make no new
investments except follow on investments required to protect the
interests of the Company.
As such TCF is embarking on a change in its investment strategy
such that no new investments will be made and existing investments
will be realised as and when appropriate.
2. Basis of preparation
(a) Statement of compliance
These unaudited condensed interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
do not include all of the information required for full annual
financial statements.
These condensed interim financial statements were approved by
the Board of Directors on 12 December 2013.
(b) Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by management in applying the Company's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the financial statements as at and
for the year ended 31(st) March 2013.
3. Significant accounting policies
Except as describe below, the accounting policies applied in
these interim financial statements are the same as those applied in
the Company's financial statements as at and for the year ended
31(st) March 2013. The following changes in accounting policies are
also expected to be reflected in the Company's financial statements
as at and for the year ending 31(st) March 2014.
The Company has adopted IFRS 13 Fair Value Measurement with an
initial application date of 1(st) April 2013. IFRS 13 establishes a
single framework for measuring fair value and making disclosures
about fair value measurements, when such measurements are required
or permitted by IFRSs. In particular, it unifies the definition of
fair value as the price at which an orderly transaction to sell an
asset or to transfer a liability would take place between market
participants at the measurement date. It also replaces and expends
the disclosure requirements about fair value measurements in other
IFRSs, including IFRS 7 Financial Instruments: Disclosures.
In accordance with the transitional provisions of IFRS 13, the
Company has applied the new fair value measurement guidance
prospectively. Notwithstanding the above, the change had no
significant impact on the measurements of the Company's assets and
liabilities.
Notes to the unaudited interim financial statements
(continued)
For the six months ended 30(th) September 2013
4. Financial risk management
The Company's financial risk management objectives and policies
are consistent with those disclosed in the financial statements as
at and for the year ended 31(st) March 2013.
5. Comparative figures
The comparative figures shown in the Statement of Financial
Position is at 31(st) March 2013 and in the case of the Statement
of Comprehensive Income, Statement of Changes in Equity and
Statement of Cash Flows are for the six months to 30(th) September
2012.
6. Other Expenses
2013 2012
GBP GBP
Directors fees 50,000 91,815
Custodian fees 73,196 3,886
Legal and professional fees 118,210 199,277
Other expenses 38,453 35,523
279,859 330,501
======== ========
7. Investments
30(th) September 31(st) March 2013
2013
GBP GBP
Long positions:
Market value 16,068,108 20,372,332
================= ==================
Cost 18,526,527 27,365,042
================= ==================
As at 30(th) September 2013, the Company had an interest in
6,128,610 shares of Spazio Investment NV ("Spazio NV") valued at
GBP12,653,515, or 65.64% of the total assets of the Company. The
Directors, acting on the advice of the Investment Manager, have
resolved to carry the investment at its current estimated
realisable value, after allowing for estimates of potential costs,
liabilities and contingent liabilities in Italy, being EUR2.47 per
share (31(st) March 2013: EUR2.47 per share) which has been derived
based on an underlying valuation model which is reviewed and
updated regularly.
Spazio NV has carried out detailed analysis on two outstanding
matters regarding its taxation. At this stage, after having
obtained advice from their Italian tax and legal advisors, the
directors of Spazio NV have concluded it is not necessary to make
any provision for either of these tax claims and therefore no
provision has been made in the carrying value of the position in
the Company's accounts. However, the external environment in
relation to tax disputes in Italy has become increasingly
uncertain:
1. Substitute tax
This relates to a retrospective change in the Italian tax regime
with respect to the taxation of Italian real estate funds. A new
law was introduced in July 2011 and then subsequently clarified by
an additional regulation in December 2011 and a statement in
February 2012 regarding certain tax exemption conditions. In
summary, the new legislation requires the payment of a one-off 5%
of the average 2010 NAV "substitute tax" for certain classes of
unit holder of Italian real estate funds and is applied
retrospectively. After having obtained advice from their Italian
tax and legal advisors, the directors of Spazio NV concluded that
the holding company structure of Spazio NV means that Spazio
Industriale, the Italian fund whose shares are held by Spazio NV,
qualifies for an exemption from this "substitute tax" under the
best available interpretation of the legislation.
2. Guardia di finanza fiscal audit
This relates to an ongoing investigation by the Italian tax
authorities into the tax residency of Spazio NV during the years
2006-2009. Spazio NV has received a formal demand for payment of
Italian tax as a result of the Guardia di finanza fiscal audit
relating to the years 2006 and 2007. The directors of Spazio NV,
together with their Italian tax lawyers, have appealed against the
demand.
8. Share capital
Authorised Share Capital 30(th) September 30(th) September 31(st) March 31(st) March
2013 2013 2013 2013
Number GBP Number GBP
Ordinary shares of
GBP0.01 each 1,000,000,000 10,000,000 1,000,000,000 10,000,000
10,000,000 10,000,000
================= =============
30(th) September 30(th) September 31(st) March 31(st) March
2013 2013 2013 2013
Number GBP Number GBP
Issued share capital
At 1(st) April 30,522,669 305,227 95,857,542 958,576
Repurchased during
period (8,372,365) (83,724) (65,334,873) (653,349)
22,150,304 221,503 30,522,669 305,227
================= ================= ============== =============
9. Net asset value per share
The net asset value per share as at 30(th) September 2013 is GBP
0.86 based on 22,150,304 ordinary shares in issue as at that date
(31(st) March 2013: GBP0.76 based on 30,522,669 ordinary
shares).
10. Earnings per share
Basic earnings per share is calculated based on the loss for the
period of GBP 113,068 and the weighted-average number of ordinary
shares in issue during the period of 25,263,362 (2012: loss of GBP
592,607 and 95,857,542 shares). There is no difference between the
basic and diluted earnings per ordinary share.
11. Prime brokerage agreements
Under the terms of the prime brokerage agreement which the
Company has entered into, the prime broker holds a first fixed
charge over the Company's assets and cash held with the prime
broker as security for the payment and performance by the Company
of its obligations to the prime broker.
12. Gearing
Gearing, or leverage, is the percentage of borrowing compared to
the percentage of assets. Pursuant to the Company's articles of
association, this borrowing should not exceed 200% of the NAV.
13. Related parties
The Company and the Investment Manager are related by virtue of
the existence of a material contract. As at 30(th) September 2013,
the Investment Manager owned 1,862,148 shares (2012: 19,550,870) in
the Company. Fees payable to the Investment
Manager in respect of the six month period ended 30(th)
September 2013 were GBP 269,152 (2012: GBP163,410) of which
GBP27,760 (2012: GBP34,011) was outstanding at the period end.
Michael Haxby, a Director of the Company, is also a Director of
Laxey Partners Ltd, the Investment Manager to the Company.
14. Investment Management Fee
The Investment Manager, from 25(th) September 2013, receives a
fee equal to:
- A monthly payment of one twelfth of 0.5% of the Company's Net
Asset Value, less the carrying value of the Company's indirect
interest in Spazio NV;
- 1.5% of the gross amount of any distributions paid to shareholders.
15. Subsequent events
On the 11(th) October 2013 the Company repurchased 4,545,237
shares equalling 20.52% of the ordinary shares in issue. The total
value of the shares repurchased was GBP2,249,832.
This information is provided by RNS
The company news service from the London Stock Exchange
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