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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Damille Inv Ii | LSE:DIL2 | London | Ordinary Share | GG00BFMHSG58 | ORD SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 50.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMDIL2
RNS Number : 9294O
Damille Investments II Limited
24 August 2017
Damille Investments II Limited
Half-Yearly
Financial Report
From 1 December 2016 to 31 May 2017
(Unaudited
CONTENTS
Summary Information 1 - 3 Chairman's Statement 4 Investment Report 5 - 6 Interim Management Report 7 Directors 8 Unaudited Financial Statements 9 - 12 Notes to Unaudited Financial Statements 13 - 27 Key Advisers and Contact Information 28
SUMMARY INFORMATION
Company Overview
Damille Investments II Limited (LSE:DIL2) (the "Company") is a Guernsey-incorporated company formed as a registered closed-ended investment company. It was incorporated on 3 November, 2011 and operates under The Companies (Guernsey) Law, 2008, as amended (the "Law"), The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, the Registered Collective Investment Scheme Rules 2015 issued by the Guernsey Financial Services Commission (the "GFSC") and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (the "FCA").
The ordinary shares of no par value (the "Shares") of the Company were admitted to trading on the Specialist Fund Segment (the "SFS") (formerly the Specialist Fund Market) of the London Stock Exchange's Main Market for Listed Securities and listed and admitted to trading on the Channel Islands Stock Exchange (the "CISX") on 9 November, 2011 ("Admission"). The listing of the Shares on the Channel Islands Securities Exchange (the successor to the CISX) was cancelled with effect from 21 July, 2014.
Investment Objective and Policy
The Company's investment objective was to realise significant capital returns for its shareholders with low volatility, by investing in a concentrated portfolio of primarily equity securities. In the opinion of the Company, many but not all of these companies would have benefited from implementing certain measures to optimise their balance sheets and align management and shareholder interests. Such issuers were expected to be, but were not limited to, closed-ended investment funds, investment companies and other corporate entities, such as real estate companies or natural resource companies.
At the Company's annual general meeting held on 4 May, 2016 a resolution put to the shareholders that, in accordance with Article 172 of the Company's Articles of Incorporation (the "Articles"), the Company continue its business as a closed-ended investment company, was not passed. Therefore, on 23 June, 2016 the Company announced that the Directors proposed to commence an orderly realisation of the Company's assets, which process was expected to take approximately 18 months. Shareholders' capital was intended to be returned to them by way of periodic distributions.
In order to permit the cost-effective return of capital to shareholders, at an extraordinary general meeting held on 5 September, 2016, the shareholders voted to adopt new articles of incorporation (the "New Articles") in substitution for and to the exclusion of the previous Articles. The New Articles include provisions permitting the Directors at their discretion to compulsorily redeem any issued Shares in the Company.
The Directors intend to continue to realise the Company's investment portfolio for cash and to return such cash to shareholders periodically by means of a compulsory redemption of a portion of each shareholder's Shares pro rata to their then percentage holding in the Company.
Capital and Income Distribution Policy
The Company previously aimed to provide shareholders with an attractive total return, comprising primarily capital growth, although there was also the potential for distributions of income to be made.
The nature of the Company's investments is such that the timing and amount of investment income can not be predicted. Because the Company is making periodic returns of capital to shareholders via compulsory redemptions of Shares, there is no current intention to declare any dividends and any surplus income received which is not needed to finance the Company's operating expenses will be distributed to shareholders when making the afore-mentioned redemptions.
SUMMARY INFORMATION (CONTINUED)
Capital and Income Distribution Policy (continued)
As the Company has been granted "reporting fund" status by H.M. Revenue & Customs, United Kingdom resident or ordinarily resident shareholders, or any shareholders who carry on a trade in the United Kingdom through a branch, agency of permanent establishment, will be subject to UK income tax or corporation tax (as appropriate) on their share of the excess of the Company's "reportable income" for any period of account over any amounts actually distributed, in addition to such tax on amounts actually distributed. Since the Directors intend to distribute all reportable income, such shareholders should not in practice be subject to UK tax on 'excess' amounts of income not actually distributed. This detail has been included for information purposes and should not in any way be regarded as tax advice and relied on. Investors who are affected are recommended to contact their own tax advisors when taking decisions regarding the above.
Compulsory Redemptions of Shares
Since the adoption of the New Articles on 5 September, 2016, the Directors have resolved to make the following compulsory redemptions of Shares:
Date Number of Shares Redemption Price ------------------ ----------------- ----------------- 9 September, 2016 11,802,243 110.92 pence ------------------ ----------------- ----------------- 18 October, 2016 5,352,389 118.30 pence ------------------ ----------------- ----------------- 14 December, 2016 5,199,671 119.90 pence ------------------ ----------------- ----------------- 15 February 2017 3,864,177 131.54 pence ------------------ ----------------- ----------------- 15 June 2017 2,189,707 100.62 pence ------------------ ----------------- -----------------
The return of capital via a compulsory redemption of Shares, in some instances, has triggered the payment of a performance fee to Damille Partners Limited ("Damille"), a 15% portion of which was payable to Nimrod Capital LLP ("Nimrod") under the Services Agreement with Damille and the Corporate and Shareholder Advisory Agreement between the Company and Nimrod Capital LLP. The performance fees were settled by the sale out of treasury to Damille and Nimrod of Shares at their prevailing net asset value. All such issues of Shares are disclosed in note 10 and 14 to the financial statements.
Discount Control
At the annual general meeting held on 18 May, 2017, the shareholders granted the Directors authority to make market purchases of up to 3,782,231 Shares within specified parameters, with a view to addressing any imbalance between the supply of and demand for Shares. The Directors seek annual renewal of this authority from shareholders at each annual general meeting held under section 199 of the Law.
In accordance with the Law, any repurchase of Shares will be effected by the purchase of Shares in the market for cash at a price below the estimated prevailing net asset value per Share, which is accretive to the net asset value per Share. Shares which are purchased may be cancelled or held in treasury. Although shareholders can have a reasonable expectation that their Shares will in due course be redeemed at a price close to their prevailing net asset value, there can be no guarantee as to the timing of such future compulsory redemptions, so this discount control mechanism also offers shareholders an alternative method of realising their investment sooner and increases liquidity in the Shares.
During the financial period ended 31 May, 2017 the Company repurchased and cancelled 167,623 Shares. At the period end, the Company held 2,562,790 Shares in treasury.
SUMMARY INFORMATION (CONTINUED)
Voluntary Redemption Offer
Under both the previous Articles and the New Articles, the Directors had and continue to have the ability in each year following the second anniversary of Admission to offer at their absolute discretion to each holder of Shares an option to redeem up to 15% of their shareholding, subject to any legal or regulatory requirements and, in particular, the Law (the "Redemption Offer").
Prior to the adoption of the New Articles, the following Shares were redeemed pursuant to previous Redemption Offers:
Date Number of Shares Redemption Price ------------------ ----------------- ----------------- 27 February, 2014 5,451,757 103.64 pence ------------------ ----------------- ----------------- 18 February, 2015 9,554,308 101.64 pence ------------------ ----------------- ----------------- 26 February, 2016 8,139,756 95.87 pence ------------------ ----------------- -----------------
Following the adoption by the shareholders of the New Articles and the empowerment of the Directors at their discretion to compulsorily redeem Shares, the Directors do not intend to incur the additional expense of making any further Redemption Offers.
CHAIRMAN'S STATEMENT
I have pleasure in presenting the half yearly financial report of the Company for the period from 1 December, 2016 to 31 May, 2017(the "Period").
The Company's unaudited Net Asset Value (the "NAV") as at 31 May, 2017 was 101.65 pence per Share amounting to a net asset value of GBP22,256,384. As the NAV at 1 December, 2016 was 121.21 pence per Share, the performance was down 16.14% for the half year.
During the Period, the Company bought back 167,623 Shares, 799,931 Shares were sold out of treasury and 167,623 Shares were cancelled, so that the Company held 2,562,790 Shares in treasury at the Period end. The Company intends to continue to buy back Shares opportunistically where they trade at significant discounts to NAV.
As the Continuation Resolution put to shareholders at the Company's annual general meeting held on 4 May, 2016 was not passed, on 23 June, 2016 the Company announced that the Directors proposed to commence an orderly realisation of the Company's assets and this is currently underway. Pursuant to this, the Company has continued returning its capital to shareholders and during the Period undertook two compulsory redemptions of Shares, whereby a total of 9,063,848 Shares were redeemed for GBP11.317 million. Post the Period end, the Company has returned a further GBP2.2 million through a further compulsory redemption of Shares.
It should be noted that since inception (when the Company raised GBP70.7 million net of expenses) the Company has returned GBP60.2 million to shareholders through redemption offers, share buy backs and compulsory redemptions.
Richard Prosser
Chairman
INVESTMENT REPORT
During the Period, the Company's NAV per Share decreased by 16.14%. Since launch on 3 November, 2011 until 31 May, 2017, the Company's NAV increased by 4.95%.
At the Period end, the Company was invested with weightings of approximately 85.3% in equities and 14.7% in cash and net working capital. However, shareholders should note that, as the Company is in realisation mode, equities have been sold and cash returned to shareholders.
At the Period end, the Company held eleven investments, of which four are currently notifiable under the Disclosure Guidance and Transparency Rules ("DGTR"). In total the top five investments (including cash) accounted for 94.3% of the Company's NAV.
At the annual general meeting held on 4 May, 2016, the resolution put to the Company's shareholders that, in accordance with Article 172 of the Company's Articles, the Company continue its business as a closed-ended investment company, did not pass. Accordingly, and as announced on 23 June, 2016, the Company is now in an orderly realisation which is expected to have concluded by the end of the 2017 calendar year although there is no guarantee that this will be achieved.
We set out below a summary of the Company's portfolio composition as at the Period end. Where any particular investments are notifiable under the DGTR these are detailed as in previous periods. However, where investments are not notifiable under the DGTR we do not disclose names, so as not to prejudice our ability to further deal in those investments and realise these holdings.
Overview of Investments
The Company's portfolio is demarcated into four distinct "classes" as follows:
1. Private Equity and Venture (one holding representing 17.7% of NAV)
Whilst we have realised a substantial amount of this exposure, we retain a holding in Eurovestech plc ("EVT"). Our investment case was predicated on successive returns of capital ("RoCs"), and during its lifetime EVT has made five RoCs, however recent progress on realising its investments has been slower than expected. Since the Period end EVT have announced a recommended cash offer for one of its holdings, Kalibrate Technologies plc.
2. Real estate and other funds (three holdings representing 28.4% of NAV)
Here we again looked for the combination of attractive discounts to realisable net asset value and rational capital management policies. The underlying exposures of these funds are extremely diverse. Approximately 90% of our Other funds, by value, are in the Real Estate sector.
The Local Shopping REIT plc ("LSR")
The Company holds 22.2% of LSR. LSR is a UK Real Estate Investment Trust with an established portfolio of local shops in urban and suburban areas throughout the United Kingdom. LSR is in a realisation phase whereby it is seeking buyers for its properties with a view to returning cash to shareholders. The Company has a representative on the board of directors of LSR.
St Peter Port Capital Limited ("SPPC")
The Company holds 8.5% of SPPC. SPPC is a Guernsey registered, closed-ended investment company established with the aim of generating value for shareholders by investing in growth companies. SPPC has announced a strategic review and commencement of a formal sales process and the Company awaits the outcome of this.
INVESTMENT REPORT (CONTINUED)
3. Holding company trading at a discount (one holding, Sistema PJSFC, representing 23.0% of NAV)
As a result of a legal claim brought against Sistema PJSFC by Rosneft and announced to the market on 3 May, 2017, Sistema's share price fell almost 46% in May alone, closing at US$4.50 at the Period end. This is a severe disappointment to the Executive Directors who are monitoring the situation closely.
4. Natural resources companies (five holdings representing 16.2% of NAV)
Certain natural resource companies are valued at significant discounts to their asset values.
Lionsgold Limited ("Kolar")
Kolar is a gold exploration company, incorporated in Guernsey and focused primarily on the Kolar Gold Field region to the east of Bangalore in India. At the Period end the Company had a 14.6% shareholding in Kolar.
Ovoca Gold plc ("OVG")
OVG is a cash-rich gold explorer incorporated in Ireland and operating in Russia. At the Period end the Company had a 5.0% shareholding in OVG.
Sunrise Resources plc
Sunrise Resources plc is an AIM-traded, diversified mineral exploration and development company. The Company holds 56,500,000 shares in Sunrise Resources plc and 30,000,000 warrants.
Investment Allocation
As at 31 May, 2017, the Company's net assets were allocated in the following proportions (% net assets):
Notifiable shareholdings: 30.5%
18,300,000 shares in Local Shopping REIT PLC: 25.4%
4,315,000 shares in St Peter Port Capital Limited: 1.7%
28,183,173 shares in Lionsgold Limited: 1.4%
4,382,100 shares in Ovoca Gold plc: 1.7%
56,500,000 shares in Sunrise Resources plc: 0.3%
Non-Notifiable shareholdings: 54.8%
Cash (incl. net working capital): 14.7%
Outlook
As the Company has adopted a realisation mode there is currently every expectation that this will be concluded by the end of 2017 - as announced on 23 June, 2016. Although there is no guarantee that this will be achieved by then.
Brett Miller Rhys Davies Executive Director Executive Director
INTERIM MANAGEMENT REPORT
A description of the important events that have occurred during the Period and their impact on the financial statements is included in the Executive Directors' Investment Report on pages 5 to 6. A description of the principal risks and uncertainties facing the Company is given in the Investment Report and note 13. Details of all related party transactions and changes in the related parties are given in note 14 to the financial statements. Other than the information set out in the Investment Report, notes 13 and 14, the Board is not aware of any events or changes in the related parties transactions during the Period, which had or could have had a material impact on the financial position of the Company.
Responsibility Statement
The Directors jointly and severally confirm that, to the best of their knowledge:
(a) the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, 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 (including the information incorporated by reference) includes
(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 24 August 2017.
David Copperwaite Richard Prosser Director Director
DIRECTORS
Richard Prosser: Chairman (independent non-executive)
Richard Prosser is a Chartered Accountant. Richard is a shareholder of Estera Trust (Jersey) Limited, a corporate and fiduciary administrator authorised to conduct trust company business in Jersey and is a director of a number of companies quoted in London and elsewhere, including property companies, hedge funds and investment management companies. Richard is Chairman of Threadneedle Investments (C.I.) Limited, manager of the Threadneedle Property Unit Trust. He is also Chairman of the Aberdeen Latin American Income Fund, listed on the CISE and the London Stock Exchange.
David Copperwaite: Director (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, including Aberdeen Private Equity Fund Limited which is listed on the CISE and the London Stock Exchange. David has considerable experience in the management and administration of offshore funds.
Martin Tolcher: Director (independent non-executive)
Martin Tolcher is a Chartered Fellow of the Chartered Institute for Securities and Investment (Chartered FCSI) and has been involved within the fund administration industry in Guernsey for over 25 years. He has worked at a senior level for three fund administration subsidiaries of Bermudan and Canadian international banks, gaining considerable experience in a wide variety of funds and private equity structures. Martin joined Legis Group in 2005 as a director of Legis Fund Services Limited and became Managing Director of that company at the beginning of 2007, a role he had until 31 December, 2010 (he remained as a director until 30 September, 2011). Martin is a non-executive director of a number of open and closed-ended Guernsey domiciled funds and associated management companies.
Brett Miller: Director (executive)
Brett Miller is an executive director of the Company. Brett presently serves as a non-executive Director of M&L Property & Assets plc, Manchester and London Investment Trust plc and The Local Shopping REIT plc. 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 qualified as a solicitor and practised until December 1997.
Rhys Davies: Director (executive)
Rhys Davies is an executive director of the Company. Rhys also presently serves as the non-executive Chairman of EIH plc, an AIM quoted Isle of Man registered investment company. Rhys holds degrees from the University of Wales, Cardiff and Imperial College, London, as well as the CFA designation.
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 May 2017
Hot Features
Premium
Period ended Period ended
31 May 2017 31 May 2016
Notes GBP GBP
Net unrealised loss on financial
assets designated at fair value
through profit or loss 7 (5,417,117) (937,522)
Realised gain on financial assets
designated at fair value through
profit or loss 7 1,913,434 164,178
------------- -----------------------
Net loss on financial assets
designated at fair value through
profit or loss (3,503,683) (773,344)
Operating income 3 600,246 601,709
Operating expenses 4 (1,125,785) (540,708)
Net loss before tax (4,029,222) (712,343)
Withholding taxes - (44,152)
Loss and Total Comprehensive
Loss for the period attributable
to Shareholders (4,029,222) (756,495)
------------- -----------------------
Pence Pence
Loss per share for the year
- Basic and Diluted 6 (18.08) (1.49)
------------- -----------------------
A non-going concern basis (refer to note 2(c)) has been adopted in arriving at the results for the period.
The notes on pages 13 to 27 form an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
as at 31 May 2017
30 November
31 May 2017 2016
Notes GBP GBP
NON-CURRENT ASSETS
Financial assets designated
as at fair value through profit
or loss 7 - -
CURRENT ASSETS
Financial assets designated
as at fair value through profit
or loss 7 18,989,778 31,692,067
Trade and other receivables 8 99,626 292,879
Cash and cash equivalents 3,227,316 5,188,861
------------ -------------------------
22,316,720 37,173,807
TOTAL ASSETS 22,316,720 37,173,807
------------ -------------------------
CURRENT LIABILITIES
Trade and other payables 9 60,335 414,264
------------ -------------------------
NET ASSETS 22,256,385 36,759,543
------------ -------------------------
EQUITY
Share capital 10, 11 14,900,140 25,374,076
Accumulated reserves 7,356,245 11,385,467
TOTAL EQUITY 22,256,385 36,759,543
------------ -------------------------
Pence Pence
Net asset value per Ordinary
share based on 21,896,829 (Nov
2016: 30,328,369) shares in
issue 101.65 121.21
------------ -------------------------
The financial statements were approved by the Board of Directors and authorised for issue on 24 August 2017 and are signed on its behalf by:
David Copperwaite Richard Prosser Director Director
The notes on pages 13 to 27 form an integral part of these financial statements.
STATEMENT OF CASH FLOWS
for the period ended 31 May 2017
Period ended Period ended
31 May 2017 31 May 2016
Notes GBP GBP
OPERATING ACTIVITIES
Loss and Total Comprehensive
Loss for the period attributable
to Shareholders (4,029,222) (756,495)
Adjustments for:
Net unrealised gains on financial
assets designated at fair value
through profit or loss 7 5,417,117 937,522
Bond income 3 (53,777) 31,254
Dividend income 3 (534,196) (632,963)
799,922 (420,682)
Decrease in payables 9 (353,929) (16,531)
Decrease in receivables 8 (3,352) (80,920)
Realised gain on financial assets
designated at fair value through
profit or loss 7 (1,913,434) (164,178)
(1,470,793) (682,311)
Bond interest received - (31,254)
Dividends received from investments 525,293 632,963
Proceeds from sale of investments 9,457,891 2,555,164
NET CASH FLOW USED IN OPERATIONS 8,512,391 2,474,562
------------- ------------------
FINANCING ACTIVITIES
Costs of redemption of Ordinary
shares 10 (11,317,343) (7,803,584)
Treasury shares issued 10,11 1,026,974 -
Purchase and cancellation of
own shares 10 (183,567) -
NET CASH FLOW USED IN FINANCING
ACTIVITIES (10,473,936) (7,803,584)
------------- ------------------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE PERIOD 5,188,861 9,115,572
Decrease in cash and cash equivalents (1,961,545) (5,329,022)
CASH AND CASH EQUIVALENTS AT OF PERIOD 3,227,316 3,786,550
------------- ------------------
The notes on pages 13 to 27 form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
for the period ended 31 May 2017
Share Accumulated
Capital Reserves Total
Notes GBP GBP GBP
Balance as at 1 December 2016 25,374,076 11,385,467 36,759,543
Profit / (Loss) and total
comprehensive income for the
period - (4,029,222) (4,029,222)
Treasury shares issued in
lieu of Performance Fees 11 1,026,974 - 1,026,974
Share redemptions during the
period 10 (11,317,343) - (11,317,343)
Ordinary shares cancelled
during the period 10 (183,567) - (183,567)
Transactions with owners (10,473,936) - (10,473,936)
Balance as at 31 May 2017 14,900,140 7,356,245 22,256,385
------------------ ---------------------- ----------------------
Share Accumulated
Capital Reserves Total
GBP GBP GBP
Balance as at 1 December 2015 51,776,209 4,310,630 56,086,839
Profit / (Loss) and total
comprehensive loss for the
year - 7,074,837 7,074,837
Treasury shares issued in
lieu of Performance Fees 11 826,465 - 826,465
Share redemptions during the
year 10 (27,226,508) - (27,226,508)
Treasury shares acquired during
the year 11 (2,090) - (2,090)
Transactions with owners (26,402,133) - (26,402,133)
Balance as at 30 November
2016 25,374,076 11,385,467 36,759,543
------------------ ---------------------- ----------------------
The notes on pages 13 to 27 form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
for the period ended 31 May 2017
1. GENERAL INFORMATION
Damille Investments II Limited is a closed-ended investment company incorporated in Guernsey on 3 November 2011 whose Shares were admitted to trading on the Specialist Fund Segment ("SFS") of the London Stock Exchange's Main Market on 9 November 2011.
The principal activity of the Company was to realise capital growth from a portfolio of equities and to generate a significant capital return to Shareholders.
The Company's investment objective was to realise significant capital returns for its Shareholders with low volatility, by investing in a concentrated portfolio of primarily equity securities. In the opinion of the Company, many but not all of these companies would have benefited from implementing certain measures to optimise their financial position and align management and Shareholder interests. Such issuers were expected to be, but were not limited to, closed-ended investment funds, investment companies and other corporate entities, such as real estate companies or natural resource companies.
At the Company's annual general meeting held on 4 May, 2016 a resolution put to the shareholders that, in accordance with Article 172 of the Company's Articles of Incorporation (the "Articles"), the Company continue its business as a closed-ended investment company, was not passed. Therefore, on 23 June, 2016 the Company announced that the Directors proposed to commence an orderly realisation of the Company's assets, which process was expected to take approximately 18 months. Shareholders' capital is intended to be returned to them by way of periodic distributions.
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 European Union on a non-going concern basis (refer to note 2 (c)) 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 Standards and Interpretations
The following Standards or Interpretations have been issued by the IASB but not yet adopted by the Company:
IFRS 7 Financial Instruments: Disclosures - Deferral of mandatory effective date of IFRS 9 and amendments relating to additional hedge accounting disclosures (and consequential amendments). Applies only when IFRS 9 is adopted, which is effective for annual periods beginning on or after 1 January 2018.
IFRS 9 Financial Instruments - Classification and measurement of financial assets, effective for annual periods beginning on or after 1 January 2018.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
2. ACCOUNTING POLICIES (CONTINUED) a) Basis of Preparation (continued)
IFRS 9 Financial Instruments - Accounting for financial liabilities and derecognition, effective for annual periods beginning on or after 1 January 2018.
IFRS 9 Financial Instruments - Classification and measurement of financial liabilities and derecognition, effective for annual periods beginning on or after 1 January 2018.
The Directors have considered the above and are of the opinion that the above Standards and Interpretations are not expected to have a material impact on the Company's financial statements except for the presentation of additional disclosures and changes to the presentation of components of the financial statements. These items will be applied in the first financial period for which they are required.
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. The preparation of the Company's financial statements requires the Directors to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements and disclosures. However, uncertainty about these assumptions and estimates could result in outcomes that could require material adjustment to the carrying amount of the assets or liabilities in future periods.
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 disclosed below. The Directors consider that the most significant estimate is the valuation of Level 3 investments as shown in Note 7.
c) Non-going concern
The Continuation Resolution put to shareholders at the Company's annual general meeting held on 4 May 2016 was not passed. The Directors are realising the Company's assets in an orderly manner and returning their invested capital to Shareholders via periodic compulsory redemptions. Therefore, the Directors believe it is appropriate to adopt a non-going concern basis in preparing the financial statements, as they consider that the Company will be voluntarily liquidated within the next 18 months. The Directors believe that the Company will be able to realise its remaining investments in an orderly manner and therefore do not consider there to be a material difference in the value of the Company's assets, and liabilities, compared to if the financial statements had been prepared on a going concern basis. This has also not resulted in changes in the principle accounting policies and valuation methodology for investments. Non-current assets have been reclassified to current as a result of the financial statements being prepared on a non-going concern basis. The estimated costs of winding up the Company have not been included in preparing these financial statements as these costs cannot be accurately determined at this stage.
d) Taxation
The income tax authority of Guernsey has granted the Company exemption from Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and the income of the Company may be distributed or accumulated without deduction of Guernsey Income Tax. Exemption under the above mentioned ordinance entails payment by the Company of an annual fee of GBP1,200 for each year in which the exemption is granted. It should be noted however, that interest and dividend income accruing from the Company's investments may be subject to withholding tax in the country of origin. With effect from 1 January 2008 the standard rate of income tax for most companies in Guernsey became 0%.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
2. ACCOUNTING POLICIES (CONTINUED) d) Taxation (continued)
Tax exemption continues to be available and the Company has been granted this status for 2017. The Directors intend to conduct the Company's affairs so that it continues to remain eligible for exemption from Guernsey income tax.
e) Expenses
All expenses are accounted for on an accruals basis.
f) Dividend income
Dividend income is recognised when the right to payment is established.
g) Bank interest and other income
Bank interest income and other income is included in the financial statements on time apportioned basis using the effective interest rate method.
h) Cash and Cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise of cash at bank, call deposits, short term deposits, short term cash with original maturities of three months or less 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 cash equivalents defined above.
i) Share 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.
j) Financial assets designated as at fair value through profit or loss
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 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 depreciation on investments" and recognised in the "realised gain on investments" along with any additional gain or loss recognised for 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.
IFRS 13 Fair value measurement defines fair value as a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
2. ACCOUNTING POLICIES (CONTINUED) j) Financial assets designated as at fair value through profit or loss (continued)
Where no quoted market prices are available, the valuation of the investment is based on the quarterly NAV provided to the Company, adjusted for any subsequent distributions received.
Warrants held by the Company are valued using an option pricing model which uses directly observable market inputs
k) 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.
l) Segmental Reporting
The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business and operates solely from Guernsey. Therefore, no segmental reporting has been provided based on operating segments. Geographical information is based on the location of the Company's investments. Geographical locations are determined based on the country of primary listing for listed investments and the country of incorporation for unlisted investments. The dividend income as detailed in note 3 received from investments with a country of incorporation or primary listing in the United Kingdom or Europe comprised of approximately 28% with the remaining income being derived from investments incorporated or listed in the rest of the world.
m) Foreign Currencies
The financial statements are expressed in Pounds Sterling ('GBP'), which is the functional and presentation currency of the Company.
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 rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to GBP at the rate of exchange ruling at the dates the values were determined.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
3. OPERATING INCOME
Period ended Period ended
31 May 2017 31 May 2016
GBP GBP
Bond income 53,777 (31,254)
Dividend income 534,196 632,963
Director's fee income 12,273 -
600,246 601,709
-------------- --------------
A director, Brett Miller, sits as a non-executive director on the board of one of the Company's investments: The Local Shopping Reit plc. The director's fee income shown above is earned from this position and paid over to the Company.
4. OPERATING EXPENSES
Period ended Period ended
31 May 2017 31 May 2016
GBP GBP
Investment advisory fees 208,706 362,015
Performance fees 14 699,198 -
Directors' fees 83,980 84,770
Corporate and shareholder advisory
fees 26,081 47,410
Brokerage 19,953 2,824
Administrator's fee 23,842 28,855
Annual fees 7,798 8,202
Audit fees 8,729 7,594
Directors' and Officers'
insurance 3,995 4,005
Public Offering of Securities
Insurance 1,120 1,127
Legal and professional
fees 20,000 450
Sundry costs 4,314 9,655
Registrar's fee 6,059 3,000
Bank interest and charges 41 284
Loss/(gain) on foreign
exchange 11,969 (19,483)
Net operating expenses for the period 1,125,785 540,708
-------------- --------------
5. DIRECTORS' REMUNERATION
The non-executive Directors are paid GBP20,000 per annum (2016: GBP20,000 per annum). David Copperwaite receives an additional fee of GBP3,500 (2016: GBP3,500) as Chairman of the audit committee and Richard Prosser receives an additional fee of GBP5,000 (2016: GBP5,000) as Chairman of the Company. The executive Directors are each paid GBP50,000 per annum (2016: GBP50,000 per annum).
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
6. LOSS PER SHARE
Loss per share is calculated by dividing the net loss for the period attributable to Shareholders of GBP4,092,222 (2016: loss of GBP756,495) by the weighted average number of ordinary shares in issue during the period 22,285,897 (2016: 50,635,443). There are no dilutive instruments and therefore basic and diluted earnings per ordinary share are identical.
7. FINANCIAL ASSETS DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
TOTAL TOTAL
31 May 2017 30 Nov 2016
GBP GBP
Opening valuation 31,692,067 44,942,965
Additions - cost - 75,000
Proceeds from sales (9,252,383) (21,509,725)
Realised gain on investments 1,913,434 1,617,516
Accrued amortisation 53,777 72,097
Movement in unrealised appreciation
on investments (5,417,117) 6,494,214
Closing valuation 18,989,778 31,692,067
------------ ---------------
Closing portfolio cost 18,543,196 25,882,145
------------ ---------------
Unrealised depreciation on valuation
carried forward 446,582 5,809,922
------------ ---------------
IFRS 13 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).
As at 31 May 2017 Level 1 Level 2 Level 3 Total
----------- -------- ---------- -----------
Equity securities 14,756,194 37,043 - 14,793,237
Investment funds - - 4,196,541 4,196,541
14,756,194 37,043 4,196,541 18,989,778
=========== ======== ========== ===========
Investments held by the Company have been classified as Level 1, for those investments that are quoted and are valued using quoted market bid prices.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
7. FINANCIAL ASSETS DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
As at 30 November 2016 Level 1 Level 2 Level 3 Total
----------------- ----------------- ------------------ -----------
Equity securities 26,471,624 387,989 - 26,859,613
Investment funds - - 4,832,454 4,832,454
26,471,624 387,989 4,832,454 31,692,067
================= ================= ================== ===========
The Company invests in warrants which are valued using an option pricing model using observable market inputs and are therefore classified as Level 2. Where the Net Asset Value (NAV) or current market price per share is below the warrants' exercise price the warrants are being valued at the Directors' best estimate of fair value, considering the likelihood of the warrants being exercised, and are therefore classified as Level 3.
The Company also invests in managed funds which are not quoted in an active market and which may be subject to restrictions on redemptions. Investments in those funds are valued based on the Net Asset Value (NAV) per share published by the administrator of those funds adjusted for any distributions. The Company classifies the fair value of these investments as Level 3. The value of these investments as at 31 May 2017 was GBP4,196,541 (Nov 2016: GBP4,832,454). If the NAV of these investments was to increase/ decrease by 10%, this would result in an increase/ decrease in the fair value as at 31 May 2017 of GBP419,654 (Nov 2016: GBP483,245).
The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting period:
31 May 2017 30 Nov 2016
GBP GBP
Opening valuation 4,832,454 4,980,105
Net gain on valuation - -
Movement in unrealised depreciation on
valuation (635,913) (147,651)
Closing valuation 4,196,541 4,832,454
------------ -----------------
8. TRADE AND OTHER RECEIVABLES
31 May 2017 30 Nov 2016
GBP GBP
Prepayments and accrued
income 47,281 35,026
Broker debtors 52,345 257,853
99,626 292,879
------------ -------------
The above carrying value of receivables is equivalent to its fair value.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
9. TRADE AND OTHER PAYABLES
31 May 2017 30 Nov 2016
GBP GBP
Accrued expenses 60,335 414,264
60,335 414,264
------------- --------------
The above carrying value of payables is equivalent to its fair value.
10. SHARE CAPITAL
The Company is authorised to issue an unlimited number of ordinary shares of no par value.
31 May 2017 30 Nov 2016
SHARES GBP SHARES GBP
Shares of no par value
Issued shares at the
start of the period/year 30,328,369 25,374,076 54,905,479 51,776,209
Shares issued in lieu
of Performance Fees 799,931 1,026,974 719,278 826,465
Redemption of shares (9,063,848) (11,317,343) (25,294,388) (27,226,508)
Ordinary shares cancelled
during the period/year (167,623) (183,567) - -
Purchase of shares into
Treasury - - (2,000) (2,090)
Shares in issue at the
end of the period/year 21,896,829 14,900,140 30,328,369 25,374,076
------------ ------------- --------------- --------------
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.
Shareholders also have the right to receive notice of and to attend, speak and vote at general meetings of the Company and each shareholder 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 (or her).
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
11. TREASURY SHARES
31 May 2017 30 Nov 2016
SHARES GBP SHARES GBP
Shares held in Treasury
Opening balance 3,362,721 3,104,322 4,389,999 3,928,697
Purchase of shares into
Treasury - - 2,000 2,090
Treasury shares issued
in lieu of Performance
Fees (799,931) (1,026,974) (719,278) (826,465)
Treasury shares cancelled
during the period/year - - (310,000) -
Shares in Treasury at
the end of the period/year 2,562,790 2,077,348 3,362,721 3,104,322
---------- ------------ --------------- -------------
The treasury shares represent 2,562,790 (2016: 3,362,721) Shares purchased in the market at various prices per share ranging from GBP0.83 to GBP1.045 and held by the Company in treasury. No cancellations of treasury shares took place during the period.
12. FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
a) Cash and cash equivalents that arise directly from the Company's operations; and b) Quoted investment securities; c) Unquoted investment securities; d) Trade and other receivables; and e) Trade and other payables. 13. FINANCIAL RISK MANAGEMENT OBJECTIVES 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 reviews 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 GBP5,696,933 (Nov 2016: GBP9,507,620) and this would cause the net asset value of the Company to rise by 25.60% (Nov 2016: 25.86%).
If the value of the Company's investment portfolio were to decrease by 30%, it would represent a loss of GBP5,696,933 (Nov 2016: GBP9,507,620) and this would cause the net asset value of the Company to fall by 25.60% (Nov 2016: 25.86%).
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) a) Market Price Risk (continued)
A substantial proportion of the Company's investments is in closed-ended funds or companies sharing similar characteristics to closed-ended funds and is subject to the risk of concentrating its investments in this asset class. The Directors attempt to minimise this market risk by undertaking a detailed analysis of the risk/reward relationship prior to any investment being made. In addition, the Company have invested in equity securities reducing the concentration of assets to one type of asset class. No further investments are being made as the Company is in the process of realising its assets.
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 NAV 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. No further investments are currently being made as the Company is in the process of realising its assets.
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:
31 May 2017 30 Nov 2016
GBP GBP
Cash and cash equivalents 3,227,316 5,188,861
Broker debtors and accrued
income 86,756 281,314
3,314,072 5,470,175
------------ -------------------
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 limited 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.
At the period end the cash was held in an account with Barclays, which has a credit rating of BBB, as rated by Standard & Poor's. No cash is held in Broker custody at period end.
The investments of the Company are held in custody by Midas Investment Management Limited and Redmayne Bentley. Bankruptcy or insolvency of the Brokers may cause the Company's rights with respect to investments held by the Brokers to be delayed. Investments held with Midas Investment Management Limited and Redmayne Bentley are ring fenced and will be protected should the Brokers become bankrupt or insolvent.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) 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 ongoing operating expenses.
The Directors ensure that the Company has sufficient liquid resources available 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 May 2017 1-3 months year
GBP GBP
Accrued expenses 60,335 -
Broker creditors - -
60,335 -
---------------------- -------------------
Over 1
As at 30 November 2016 1-3 months year
GBP GBP
Accrued expenses 414,264 -
Broker creditors - -
414,264 -
---------------------- -------------------
d) Interest Rate Risk
At the period end the Company held cash with Barclays, the returns on which are subject to fluctuations in market interest rates. The Company also holds an immaterial investment that is accruing interest at the fixed rate of 8%.
The following table details the Company's exposure to interest rate risks:
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
d) Interest Rate Risk (continued)
As at 31 May 2017:
Floating Fixed Fixed
Less than 1-3 months Greater Non-interest Total
1 month than 3 bearing
months
GBP GBP GBP GBP GBP
Assets
Designated as
at fair value
through profit
or loss on initial
recognition:
Investments - - - 18,989,778 18,989,778
Loans and
receivables:
Trade and other
receivables - - - 99,626 99,626
Cash and cash
equivalents 3,227,316 - - - 3,227,316
------------------- ------------------- ------------------- ------------------- -------------
Total Assets 3,227,316 - - 19,089,404 22,316,720
------------------- ------------------- ------------------- ------------------- -------------
Liabilities
Financial liabilities
measured at amortised
cost:
Accrued expenses - - - 60,335 60,335
---------------- ------------------ ----------------- ---------- -----------
Total Liabilities - - - 60,335 60,335
---------------- ------------------ ----------------- ---------- -----------
Total interest
sensitivity gap 3,227,316
----------------
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
d) Interest Rate Risk (continued)
As at 30 November 2016:
Floating Fixed Fixed
Less than 1-3 months Greater Non-interest Total
1 month than 3 bearing
months
GBP GBP GBP GBP GBP
Assets
Designated as
at fair value
through profit
or loss on
initial
recognition:
Investments - - - 31,692,067 31,692,067
Loans and
receivables:
Trade and other
receivables - - - 292,879 292,879
Cash and cash
equivalents 5,188,861 - - - 5,188,861
------------------- ------------------- ------------------- ------------------- --------------
Total Assets 5,188,861 - - 31,984,946 37,173,807
------------------- ------------------- ------------------- ------------------- --------------
Liabilities
Financial
liabilities
measured at
amortised
cost:
Accrued expenses - - - 414,264 414,264
Total Liabilities - - - 414,264 414,264
------------------- ------------------- ------------------- ------------------- --------------
Total interest
sensitivity gap 5,188,861
-------------------
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 May 2017 would have increased by approximately GBP4,034 (2016: GBP12,972) or 0.02% (2016: 0.04%) of Net Assets due to an increase in the amount of interest receivable on the bank balances at the period end.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) d) Interest Rate Risk (continued)
Interest rate sensitivity(continued)
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 May 2017 would have
decreased by approximately GBP4,034 (2016: GBP12,972) or 0.02% (2016: 0.04%) of Net Assets due to an decrease in the amount of interest receivable on the bank balances at the period end.
e) Foreign Exchange Risk
The Company does not have significant monetary assets and liabilities denominated in currencies other than GBP at the end of the reporting period. GBP 5,584,287 (2016: GBP13,883,107) of the Company's portfolio is invested in securities priced in foreign currencies. The Company does not normally hedge against foreign currency movements affecting the value of the investment portfolio, but takes account of this risk when making decisions.
If the value of the Company's investment portfolio priced in foreign currencies were to increase by 10%, it would represent a gain of GBP558,429 (2016: GBP1,388,311) and this would cause the net asset value of the Company to rise by 2.51% (2016: 3.78%).
If the value of the Company's investment portfolio priced in foreign currencies were to decrease by 10%, it would represent a loss of GBP558,429 (2016: GBP1,388,311) and this would cause the net asset value of the Company to fall by 2.51% (2016: 3.78%).
f) Capital Management Risk
The investment objective of the Company was 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 SFS, the Ordinary shares may trade at a discount to their NAV per Share on occasion. However, in structuring the Company, the Directors have given detailed consideration to the discount risk and how this may be managed.
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.
14. RELATED PARTY TRANSACTIONS AND DIRECTORS' BENEFICIAL INTERESTS
The Company is provided with investment advice by Damille Partners Limited (the "Service Provider"), which owns 1,103,955 Ordinary Shares (5.04%) in the Company at period end. Brett Miller and Rhys Davies are directors of both the Service Provider and the Company.
Under the Services Agreement, Damille Partners Limited is entitled to receive fees of 1.45% per annum of the Company's NAV per annum on a monthly basis. During the period the Company incurred GBP208,706 (May 2016: GBP362,015) of fees, of which GBP29,221 (Nov 2016: GBP43,898) was outstanding as at the period end and is shown as part of accrued expenses.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
for the period ended 31 May 2017
14. RELATED PARTY TRANSACTIONS AND DIRECTORS' BENEFICIAL INTERESTS (CONTINUED)
The Service Provider and Nimrod Capital LLP shall be entitled to receive a Performance Fee from the Company payable in certain circumstances. The details of the fee can be found in the Company's prospectus available from the Company's website. The performance fee accrued for the period amounted to GBP699,198 (May 2016: GBPnil) of which GBPnil was outstanding at period end (Nov 2016: GBP327,776).
There have been no related party transactions with the Directors during the period (other than those disclosed in Note 5).
There is no one entity with ultimate control over the Company.
15. SIGNIFICANT AGREEMENTS
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 NAV per annum. The minimum annual total fees payable to Nimrod Capital LLP is GBP75,000. During the period the Company incurred GBP26,081 (May 2016: GBP47,410) of costs of which GBP8,159 (2016: GBP12,410) was outstanding at the period end as shown as part of accrued expenses.
16. SUBSEQUENT EVENTS
On 12 June 2017, the Company announced that it would return to Shareholders by way of a compulsory partial redemption of Shares a further amount of approximately GBP2.2 million, representing approximately 10 percent of the Company's issued share capital. 2,189,707 Ordinary Shares were redeemed on 15 June, 2017 and cancelled. The redemption proceeds due on the redemptions of those Ordinary Shares were payable on 21 June, 2017.
KEY ADVISERS AND CONTACT INFORMATION
Key Information
Exchange: Specialist Fund Segment of the
LSE's Main Market for Listed
Mnemonic: Securities
Admitted to trading on: DIL2
Financial year end: 9 November, 2011
Base currency: 30 November
ISIN: Pounds Sterling
SEDOL: GG00BF5L9164
Country of Incorporation and BF5L916
registered number: Guernsey - Registered number
Website: 54192
www.damilleinv.com
Management and Administration
Registered Office Secretary and Administrator
Ground Floor JTC Fund Solutions (Guernsey)
Dorey Court Limited
Admiral Park Ground Floor
St Peter Port Dorey Court
Guernsey GY1 2HT Admiral Park
St Peter Port
Guernsey GY1 2HT
Consultancy Service Provider Registrar
Damille Partners Limited Anson Registrars Limited
Blenheim Trust (BVI) Limited PO Box 426
PO Box 3483 Anson House
Road Town Havilland Street
Tortola St Peter Port
British Virgin Islands Guernsey GY1 3WX
Placing and Corporate and Shareholder Auditor
Advisory Agent
Nimrod Capital LLP Grant Thornton Limited
3 St Helen's Place PO Box 313
London EC3A 6AB Lefebvre House
Lefebvre Street
St Peter Port
Guernsey GY1 3TF
This information is provided by RNS
The company news service from the London Stock Exchange
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