Interim Results - 6 months to 30 June 2009

 

TIDMMBF 
 
RNS Number : 8834Z 
Madara Bulgarian Property Fund 
30 September 2009 
 

30 September 2009 
 
 
Madara Bulgarian Property Fund Limited 
 
 
Unaudited interim results for the 6 months to 30 June 2009 
 
 
Madara Bulgarian Property Fund Limited (the 'Fund') announces its unaudited 
interim results for the 6 months to 30 June 2009. 
 
 
Key Points 
 
 
Corporate 
 
 
  *  Conditions in Bulgarian property sector remain challenging 
  *  Cash levels of Fund remain critical 
  *  Borovets conditional land contract to be unwound 
 
 
 
Financial 
 
 
  *  Loss per Ordinary Share of EUR0.02 (31 December 2008: EUR0.04) 
  *  Book Value of EUR0.85 per Ordinary Share based on Net Assets (31 December 2008: 
  EUR0.87) 
  *  Adjusted NAV of EUR0.94 per Ordinary Share based on Net Assets adjusted for the 
  independent valuation of assets, contingent tax and performance fees (31 
  December 2008: EUR0.96) 
 
 
 
Commenting on the results, Timothy Chadwick, Non-Executive Chairman of the Fund, 
said: 
 
 
"Development capital remains scarce in the sector and the Fund is focused on 
cash preservation until conditions improve. The assets remain sound and the Fund 
has no long-term debt." 
 
 
 
 
Further information: 
 
 
+---------------------------------------+--------------------------------+ 
| Timothy Chadwick, Chairman            | [phone]            | 
+---------------------------------------+--------------------------------+ 
| Madara Bulgarian Property Fund        |                                | 
| Limited                               |                                | 
+---------------------------------------+--------------------------------+ 
|                                       |                                | 
+---------------------------------------+--------------------------------+ 
| Scott Perkins, Chief Executive        | [phone]            | 
+---------------------------------------+--------------------------------+ 
| Madara Capital LLP                    |                                | 
+---------------------------------------+--------------------------------+ 
|                                       |                                | 
+---------------------------------------+--------------------------------+ 
| Tom Griffiths                         | [phone]           | 
+---------------------------------------+--------------------------------+ 
| Arbuthnot Securities Limited          |                                | 
+---------------------------------------+--------------------------------+ 
 
 
 
 
Chairman's statement 
 
 
Introduction 
 
 
I am pleased to present Madara Bulgarian Property Fund's unaudited interim 
results for the 6 months to 30 June 2009. There has been little change in the 
outlook of the Bulgarian property sector since my previous update to investors 
in the Fund's year-end results. There have been some developments however, with 
regard to the Fund's finances and the asset portfolio. 
 
 
Portfolio 
 
 
The Fund currently owns land totalling 408,341 square metres located near Byala 
on the central Black Sea coast, south of Varna. Foster + Partners have completed 
the detailed masterplan for 200,000 square metres of buildable space in Byala as 
part of a 1.2m square metre total project in conjunction with our development 
partner, BBT Projects. The project entails luxury residential apartments, 
townhouses and villas along with a hotel, retail space and leisure facilities. 
Due to the current economic conditions, this project is currently on hold 
pending the availability of satisfactory financing. 
 
 
The Fund also entered into a conditional agreement to acquire land totalling 
124,000 square metres close to the centre of the established ski resort of 
Borovets. There have been several delays and complications with regard to the 
completion of this deal. Given market conditions, therefore it has been agreed 
in principle to unwind this agreement which will involve the vendor agreeing to 
return the shares in the Fund, which were issued in exchange for the acquisition 
of the land. The details of the agreement are yet to be concluded and an 
announcement will be made as soon as it has been finalised. 
 
 
It is the intention of the Board to seek either joint venture partners for the 
Fund's existing investments or to negotiate the sale of certain assets at an 
acceptable price to provide for any additional investment activity or for 
working capital purposes. 
 
 
Fund's Finances 
 
 
Given the lack of yield from the existing investments and the poor environment 
in both equity and credit markets, the Fund has been reliant on support from its 
existing shareholders for finance. A capital raising in Q4 08 from existing 
shareholders provided the Fund with some important interim financing and the 
Fund has agreed a loan agreement with Titan AS EOOD ("Titan"), a party related 
to its principal shareholder, pursuant to which Titan will lend it up to 
EUR409,000 with interest payable at the Central Bulgarian Bank annual rate. 
Titan is a company connected to Moran Trade & Investments Inc, a substantial 
shareholder (as defined in the AIM Rules) of the Company. The loan agreement 
with Titan is therefore classified as a transaction with a related party for the 
purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the 
directors of the Company, having consulted with the Company's nominated adviser, 
Arbuthnot Securities, consider that the terms of the transaction are fair and 
reasonable insofar as the Company's shareholders are concerned. 
 
 
The Fund is reliant on this working capital facility for the foreseeable future. 
However, only one of the six payments due has been received to date. This means 
that the cash levels of the Fund remain critical. 
 
 
Valuation of the Fund's real estate investments 
 
 
The Fund has re-appointed Colliers International EOOD ("Colliers") as 
independent valuer to provide a valuation of its property portfolio on a annual 
basis, which they provided as at 31 December 2008.  This valuation was based on 
certain assumptions of the property market which are subject to change. For the 
sake of consistency and prudence, the Directors have used the Gross Development 
Value ("GDV") as the basis for the Fund's Adjusted NAV calculation despite the 
developments being on hold. The GDV is the lower of the two valuation methods 
used by Colliers. Based on this, the Adjusted Net Asset Value per Ordinary Share 
as at 30 June 2009 was EUR0.94 per share. The Adjusted NAV is based on Net Assets 
adjusted for the independent valuation of assets, contingent tax and performance 
fees. This is a reduction of 1.7% over the preceding 12 months which reflects 
the prevailing economic conditions in the region. 
 
 
The structure and objectives of the Fund 
 
 
The Fund is a Jersey incorporated company established in April 2006 with 
registered number 93301. The Fund's purpose is to make investments in Bulgaria's 
property market, primarily in acquiring land capable of development in prime 
coastal, mountain resort or city locations. The strategy is subsequently to 
develop such acquired land in accordance with its consented (regulated) use or 
to profitably trade the acquired land with the benefit of such consent. 
 
 
The Fund aims to provide shareholders with a total return, which is expected to 
comprise primarily capital growth with the potential for dividends over the 
medium to long term. The level of any dividend which might become payable will 
depend on, amongst others, the rental and other income (including realised 
capital gains) generated by the investments made by the Fund. The timing and 
amount of any rental or any other income cannot be predicted, therefore there 
can be no guarantee as to the amount or timing of any dividend payable by the 
Fund. 
 
 
The Fund will be dissolved and its affairs wound up no later than 30 June 2016 
unless its life is extended by the passing of a special resolution by its 
shareholders. Following the end of the tenth year of the Fund, or such later 
date as its life may be extended by special resolution of shareholders, the 
proceeds of the sale of the property portfolio will be returned to shareholders 
in such manner as is determined by the Directors. 
 
 
Dividend policy 
 
 
The Fund does not currently intend to pay dividends for the first five years of 
its life, during which period profits will be reinvested into further property 
investments. However, thereafter the Directors will consider the payment of 
dividends subject to the prevailing market conditions at the time and dependent 
upon the availability of distributable reserves of the Fund and on the 
availability of sufficient cash resources. 
 
 
The investment advisor 
 
 
Madara Capital LLP is the investment advisor to the Fund. It is a limited 
liability partnership registered in England and Wales with its head office 
located in London. The Investment Advisor comprises seven principals (four 
executives and three non-executives), five of whom are Bulgarian nationals and 
residents. The four executives of the investment advisor possess wide-ranging 
local knowledge and contacts and have over 35 years' collective real estate 
related experience in Bulgaria. 
 
 
Conclusion 
 
 
Conditions in the Bulgarian property sector remain depressed with little 
tangible sign of an imminent recovery. Until conditions improve the Fund is 
focused on cash preservation, and the unwinding of the Borovets deal should add 
value to existing shareholders. The Directors remain disappointed at the 
discount to which the shares are trading and are reviewing options in this 
regard. 
 
 
 
 
Timothy Chadwick 
Chairman 
29 September 2009 
 
 
 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Condensed consolidated statement of comprehensive income       |       |           | 
+----------------------------------------------------------------+-------+-----------+ 
| for the 6 months to 30 June 2009                               |       |           | 
+----------------------------------------------------------------+-------+-----------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
|        |        |        |       | 6 months to  | 6 months to  |        Year ended | 
|        |        |        |       | 30 June 2009 | 30 June 2008 |  31 December 2008 | 
|        |        |        |       |  (unaudited) |  (unaudited) |         (audited) | 
+--------+--------+--------+-------+--------------+--------------+-------------------+ 
|        |        |        |       |            EUR |            EUR |                 EUR | 
+--------+--------+--------+-------+--------------+--------------+-------------------+ 
| Continuing operations    |       |              |              |       |           | 
+--------------------------+-------+--------------+--------------+-------+-----------+ 
|                 |        |       |              |              |       |           | 
+-----------------+--------+-------+--------------+--------------+-------+-----------+ 
| Expenses        |        |       |              |              |       |           | 
+-----------------+--------+-------+--------------+--------------+-------+-----------+ 
| Administrative expenses  |       |      624,164 |      862,022 |         1,587,960 | 
+--------------------------+-------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Results from operating           |    (624,164) |    (862,022) |       (1,587,960) | 
| activities                       |              |              |                   | 
+----------------------------------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Finance income  |        |       |        1,016 |        3,129 |             5,449 | 
+-----------------+--------+-------+--------------+--------------+-------------------+ 
| Finance expense                  |        (320) |      (2,422) |           (2,827) | 
+----------------------------------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Net finance income       |       |          696 |          707 |             2,622 | 
+--------------------------+-------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Loss for the period/year         |    (623,468) |    (861,315) |       (1,585,338) | 
+----------------------------------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Other comprehensive expense      |              |              |       |           | 
+----------------------------------+--------------+--------------+-------+-----------+ 
| Taxation                         |            - |        (170) |                 - | 
+----------------------------------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Total comprehensive expense for  |    (623,468) |            . |       (1,585,338) | 
| the period/year                  |              |    (861,485) |                   | 
+----------------------------------+--------------+--------------+-------------------+ 
|        |        |        |       |              |              |       |           | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
| Loss per Ordinary Share (EUR)      |       (0.02) |      (0.023) |            (0.04) | 
+--------+--------+--------+-------+--------------+--------------+-------+-----------+ 
 
 
 
 
 
Condensed consolidated statement of changes in equity 
+------------------------------+------------+------+------+------+------+--------------+ 
| for the 6 months to 30 June 2009 (unaudited)            |                            | 
+---------------------------------------------------------+----------------------------+ 
|                                                                                      | 
+--------------------------------------------------------------------------------------+ 
|                              |            Stated |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |          Capital  |          Retained  |              | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |           Account |          Earnings  | Total Equity | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                EUR  |                 EUR  |           EUR  | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                   |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
| Balances at 1 January 2009   |        38,296,194 |        (4,492,855) |   33,803,339 | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                   |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
| Loss for the period          |                 - |          (623,468) |    (623,468) | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                   |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
| Balances at 30 June 2009     |        38,296,194 |        (5,116,323) |   33,179,871 | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                   |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
|                              |                   |                    |              | 
+------------------------------+-------------------+--------------------+--------------+ 
| 6 months to 30 June 2008 (unaudited)                                                 | 
+--------------------------------------------------------------------------------------+ 
|                              |     Stated |                    |                     | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |   Capital  |          Retained  |                     | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |    Account |          Earnings  |        Total Equity | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |         EUR  |                 EUR  |                  EUR  | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |            |                    |                     | 
+------------------------------+------------+--------------------+---------------------+ 
| Balances at 1 January 2008   | 37,373,105 |        (2,907,517) |          34,465,588 | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |            |                    |                     | 
+------------------------------+------------+--------------------+---------------------+ 
| Expenses of share issues     |   (30,000) |                  - |            (30,000) | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |            |                    |                     | 
+------------------------------+------------+--------------------+---------------------+ 
| Loss for the period          |          - |          (861,485) |           (861,485) | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |            |                    |                     | 
+------------------------------+------------+--------------------+---------------------+ 
| Balances at 30 June 2008     | 37,343,105 |        (3,769,002) |          33,574,103 | 
+------------------------------+------------+--------------------+---------------------+ 
|                              |            |                    |                     | 
+------------------------------+------------+------+------+------+------+--------------+ 
 
 
+------------------------------+------------+--------+--------+--------+--------------+ 
|                              |                     |                 |              | 
+------------------------------+---------------------+-----------------+--------------+ 
| Year ended 31 December 2008 (audited)                                               | 
+-------------------------------------------------------------------------------------+ 
|                              |     Stated |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |   Capital  |       Retained  |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |    Account |       Earnings  |          Total Equity | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |         EUR  |              EUR  |                    EUR  | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |            |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
| Balances at 1 January 2008   | 37,373,105 |     (2,907,517) |            34,465,588 | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |            |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
| Issue of stated capital      |    953,089 |               - |               953,089 | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |            |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
| Expenses of share issues     |   (30,000) |               - |              (30,000) | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |            |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
| Loss for the year            |          - |     (1,585,338) |           (1,585,338) | 
+------------------------------+------------+-----------------+-----------------------+ 
|                              |            |                 |                       | 
+------------------------------+------------+-----------------+-----------------------+ 
| Balances at 31 December 2008 | 38,296,194 |     (4,492,855) |            33,803,339 | 
+------------------------------+------------+--------+--------+--------+--------------+ 
 
 
 
 
 
+-----------------------------+----+----+----+-------------+-------------+-------------+ 
| Condensed consolidated statement of financial position                 |             | 
+------------------------------------------------------------------------+-------------+ 
| as at 30 June 2009          |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |            As at |       As at |       As at | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |     30 June 2009 |     30 June | 31 December | 
|                             |         |      (unaudited) |        2008 |       2008  | 
|                             |         |                  | (unaudited) |   (audited) | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |  Notes  |               EUR  |          EUR  |          EUR  | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| ASSETS                      |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Non-current assets          |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Land acquired for           |         |       27,095,763 |  27,095,763 |  27,095,763 | 
| development                 |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Land acquisitions yet to    |         |        8,061,771 |   8,061,771 |   8,061,771 | 
| complete                    |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Development costs           |         |          870,176 |     870,177 |     870,176 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Total non-current assets    |         |       36,027,710 |  36,027,711 |  36,027,710 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Current assets              |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Cash and cash equivalents   |         |           11,073 |     198,938 |      75,723 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Trade and other receivables |         |           28,711 |     561,281 |      34,884 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Total current assets        |         |           39,784 |     760,219 |     110,607 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| Total assets                |         |       36,067,494 |  36,787,930 |  36,138,317 | 
+-----------------------------+---------+------------------+-------------+-------------+ 
|                             |         |                  |             |             | 
+-----------------------------+---------+------------------+-------------+-------------+ 
| SHAREHOLDERS' EQUITY AND LIABILITIES                                   |             | 
+------------------------------------------------------------------------+-------------+ 
| Equity                           |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Stated capital account           |    3    |  38,296,194 |  37,343,105 |  38,296,194 | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Retained earnings                |         | (5,116,323) | (3,769,002) | (4,492,855) | 
+----------------------------------+---------+-------------+-------------+-------------+ 
|                                  |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Total equity                     |         |  33,179,871 |  33,574,103 |  33,803,339 | 
+----------------------------------+---------+-------------+-------------+-------------+ 
|                                  |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Current liabilities              |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Bank loan                        |         |           - |     492,000 |           - | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Other liabilities and payables   |         |   2,887,623 |   2,721,827 |   2,334,978 | 
+----------------------------------+---------+-------------+-------------+-------------+ 
|                                  |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Total current liabilities        |         |   2,887,623 |   3,213,827 |   2,334,978 | 
+----------------------------------+---------+-------------+-------------+-------------+ 
|                                  |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Total equity and liabilities     |         |  36,067,494 |  36,787,930 |  36,138,317 | 
+----------------------------------+---------+-------------+-------------+-------------+ 
|                                  |         |             |             |             | 
+----------------------------------+---------+-------------+-------------+-------------+ 
| Net asset value per Ordinary share (EUR)     |        0.85 |        0.89 |        0.87 | 
+-----------------------------+----+----+----+-------------+-------------+-------------+ 
 
 
The financial statements were approved by the Board of Directors and authorised 
for issue on 29 September 2009 and were signed on its behalf by: 
 
 
Director Director 
 
Condensed consolidated statement of cash flows 
for the 6 months ended 30 June 2009 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |  6 months to | 6 months to |       Year ended | 
|                                   | 30 June 2009 |     30 June | 31 December 2008 | 
|                                   |  (unaudited) |        2008 |        (audited) | 
|                                   |              | (unaudited) |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |            EUR |           EUR |                EUR | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Cash flows from operating         |    (624,164) |   (862,022) |      (1,587,960) | 
| activities                        |              |             |                  | 
| Loss from the period/year         |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Expenses recognised in profit or  |            - |           - |          753,683 | 
| loss in respect of equity-settled |              |             |                  | 
| share based payments              |              |             |                  | 
| Adjustments for:                  |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Change in trade and other         |        6,889 |      37,525 |          544,615 | 
| receivables                       |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Change in trade and other         |      526,441 |     191,653 |        (162,646) | 
| payables                          |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Net cash used in operating        |     (90,834) |   (632,844) |        (452,308) | 
| activities                        |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Cash flows from investing         |              |             |                  | 
| activities                        |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Land acquisition and development  |            - |       (365) |            (364) | 
| expenditure                       |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Loan advanced to related party    |            - |    (20,451) |                - | 
+-----------------------------------+--------------+-------------+------------------+ 
| Interest received                 |          300 |           - |            5,642 | 
| Interest paid                     |            - |       4,424 |          (2,827) | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Net cash from (used in) investing |          300 |    (16,392) |            2,451 | 
| activities                        |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Cash flows from financing         |              |             |                  | 
| activities                        |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Proceeds of the issue of share    |            - |           - |          199,406 | 
| capital                           |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Expenses of share issues          |            - |           - |         (30,000) | 
+-----------------------------------+--------------+-------------+------------------+ 
| Proceeds of borrowings            |       25,884 |     492,000 |                - | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Net cash from financing           |       25,884 |     492,000 |          169,406 | 
| activities                        |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Net decrease in cash and cash     |     (64,650) |   (157,236) |        (280,451) | 
| equivalents                       |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Cash and cash equivalents at 1    |       75,723 |     356,174 |          356,174 | 
| January                           |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
| Cash and cash equivalents at end  |       11,073 |     198,938 |           75,723 | 
| of period/year                    |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
|                                   |              |             |                  | 
+-----------------------------------+--------------+-------------+------------------+ 
 
 
 
 
 
 
+----+----------+------------------------------------------------------------------+ 
| Notes to the Financial Statements                                                | 
+----------------------------------------------------------------------------------+ 
|    |                                                                             | 
+----+-----------------------------------------------------------------------------+ 
| 1. | Statement of compliance                                                     | 
+----+-----------------------------------------------------------------------------+ 
|    |                                                                             | 
+----+-----------------------------------------------------------------------------+ 
| These condensed consolidated interim financial statements have been prepared in  | 
| accordance with International Accounting Standard (IAS) 34 Interim Financial     | 
| Reporting. They do not include all of the information required for full annual   | 
| financial statements and should be read in conjunction with the consolidated     | 
| financial statements of the Group as at and for the year ended 31 December 2008. | 
|                                                                                  | 
+                                                                                  + 
|                                                                                  |    | 
+----------------------------------------------------------------------------------+----+ 
| 2. | Significant accounting policies                                             | 
+----+-----------------------------------------------------------------------------+ 
| Except as described below, the accounting policies applied by the Group in these | 
| condensed consolidated financial statements are the same as those applied by the | 
| Group in its consolidated financial statements as at and for the year ended 31   | 
| December 2008.                                                                   | 
|                                                                                  | 
+----------------------------------------------------------------------------------+ 
| The Group applies revised IAS 1 Presentation of Financial Statements (2007),     | 
| which became effective as of 1 January 2009. This presentation has been applied  | 
| in these condensed interim financial statements as of and for the six month      | 
| period ended 30 June 2009.                                                       | 
|                                                                                  | 
+----------------------------------------------------------------------------------+ 
| Comparative information has been re-presented so that it also is in conformity   | 
| with the revised standard. Since the change in accounting policy only impacts    | 
| presentation aspects, these is no impact in earnings per share.                  | 
|                                                                                  | 
+----------------------------------------------------------------------------------+ 
| The following new standards, amendments to standards or interpretations are      | 
| mandatory for the first time for the financial year beginning 1 January 2009 but | 
| are not currently relevant for the group:                                        | 
+----------------------------------------------------------------------------------+ 
|                                                                                  | 
+----------------------------------------------------------------------------------+ 
|      *        | Amendments to IFRS 2 'Share-based Payment' (effective for annual | 
|               | periods beginning on or after 1 January 2009);                   | 
+---------------+------------------------------------------------------------------+ 
|      *        | IFRS 8 'Operating Segments' (effective for annual periods        | 
|               | beginning on or after 1 January 2009);                           | 
+---------------+------------------------------------------------------------------+ 
|      *        | Amendments to IAS 23 'Borrowing Costs' (effective for annual     | 
|               | periods beginning on or after 1 January 2009);                   | 
+---------------+------------------------------------------------------------------+ 
|      *        | Amendments to IAS 32 'Financial Instruments: Presentation and    | 
|               | IAS 1, Presentation of Financial Statements' (effective for      | 
|               | annual periods beginning on or after 1 January 2009);            | 
+---------------+------------------------------------------------------------------+ 
|      *        | Amendments to IAS 40 'Investment Property' (effective for annual | 
|               | periods beginning on or after 1 January 2009);                   | 
+---------------+------------------------------------------------------------------+ 
|      *        | IFRIC 13 'Customer Loyalty Programmes' (effective for annual     | 
|               | periods beginning on or after 1 July 2008);                      | 
+---------------+------------------------------------------------------------------+ 
|      *        | IFRIC 15 'Agreements for the Construction of Real Estate'        | 
|               | (effective for annual periods beginning on or after 1 January    | 
|               | 2009);                                                           | 
+---------------+------------------------------------------------------------------+ 
|      *        | IFRIC 16 'Hedges of a Net Investment in a Foreign Operation'     | 
|               | (effective for annual periods beginning on or after 1 October    | 
|               | 2008);                                                           | 
+---------------+------------------------------------------------------------------+ 
|      *        | IFRIC 17 'Distributions of Non-cash Assets to Owners' (effective | 
|               | prospectively for annual periods beginning on or after 15 July   | 
|               | 2009).                                                           | 
|               |                                                                  | 
+----+----------+------------------------------------------------------------------+ 
The Directors anticipate that the adoption of these Standards and 
Interpretations in future periods will have no material financial impact on the 
group financial statements, though certain additional disclosures may be 
necessary on their application. 
 
 
3.    Stated capital account 
 
 
The Articles of Association of the Fund give it the power to issue an unlimited 
number of Ordinary Shares of no par value, as permitted by the Law. 
 
 
+-------------------------+---------------+-------+------------+-------+------------+ 
|                         |         As at |              As at |              As at | 
|                         |  30 June 2009 |       30 June 2008 |   31 December 2008 | 
+-------------------------+---------------+--------------------+--------------------+ 
|                         |             EUR |       |          EUR |       |          EUR | 
+-------------------------+---------------+-------+------------+-------+------------+ 
| Issued and fully paid   |    38,296,194 |       | 37,343,105 |       | 38,296,194 | 
| up                      |               |       |            |       |            | 
+-------------------------+---------------+-------+------------+-------+------------+ 
 
 
+-------------------------+---------------+-------+------------+-------+------------+ 
| Issued and fully paid   |     Number of |       |  Number of |       | Number of  | 
| up                      |        shares |       |     shares |       | shares     | 
|                         |    39,013,307 |       | 37,611,705 |       | 39,013,307 | 
+-------------------------+---------------+-------+------------+-------+------------+ 
 
 
 
 
4.    Related party transactions 
 
 
Throughout the six months to 30 June 2009, and subsequently, Moran Trade and 
Investment Inc ("Moran") has held 18,721,205 of the shares in issue of the 
Company , which represents a holding of 47.99% of the issued share capital as at 
30 June 2009. As such, Moran is the ultimate controlling party of the Company. 
During the period, the Fund has owed EUR1,724,966 to Moran in respect of purchases 
of land from Moran carried out during 2007. This amount is included in current 
liabilities. Moran has confirmed that they will not call upon this amount due to 
them until the Group and Fund has sufficient funds available. 
 
 
Scott Perkins and Mark Smith, who are Directors of the Company, are also 
partners of Madara Capital LLP, the investment advisor to the Company.  Madara 
Capital LLP also holds 2,292,647 of the issued shares of the Company. During the 
period, Madara Capital LLP charged asset and property advisory fees of EUR 299,252 
to the Company, of which EUR 634,564 was outstanding at 30 June 2009. 
 
 
Nigel Le Quesne, Philip Burgin and Stephen Burnett, who are Directors of the 
Company, are all shareholders and directors of JTC Group Limited of which JTC 
Management Limited is a wholly-owned subsidiary. JTC Management Limited, which 
is Company Secretary and a provider of administration services to the Company, 
charged fees totalling EUR 75,961 during the period, of which EUR 127,413 was 
outstanding at 30 June 2009. 
 
 
5.Going concern 
 
 
The Group currently has insufficient liquid resources to meet its liabilities 
falling due within one year. During the prior year a proportion of Investment 
Management fees were settled by way of share-based payments and an agreement has 
been reached with the Investment Manager to defer payment on outstanding fees 
until the fund has sufficient resources. 
 
 
In order to provide short term liquidity to the Group a loan agreement has been 
entered into with Titan AS EOOD ("Titan") which provides for monthly advances to 
be made to the fund until January 2010.  Although Titan have not met the monthly 
loan advances as outlined in the loan agreement, a letter of comfort has been 
received by the Fund stating that they expect to be in a position to deliver 
upon this during October 2009. Titan also confirmed that a 12 month extension to 
the loan term will be granted if necessary. 
 
 
The directors have reviewed the expected future cash flows of the fund for 12 
months from the date of signing the Financial Statements and they are satisfied 
they will have adequate resources to meet ongoing liabilities as they fall due. 
As such, the directors have prepared the Financial Statements on a going concern 
basis. 
 
 
6.    Events after the balance sheet date 
 
 
In the opinion of the directors, no events occurred after the balance sheet date 
which require to be disclosed. 
 
 
7.Availability 
 
 
Copies of this announcement are available from the Fund's registered office, 
Elizabeth House, 9 Castle Street, St Helier, Jersey, JE2 3RT, Channel Islands 
and on the Fund's website, www.madarafund.com. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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