We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Diamond Cap | LSE:DIAM | London | Ordinary Share | IM00B1Y64R53 | ORD USD0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.1005 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMDIAM
RNS Number : 2925L
Diamond Circle Capital Plc
03 September 2012
DIAMOND CIRCLE CAPITAL PLC Unaudited Condensed Half-Yearly Financial Statements For the period from 1st January 2012 to 30th June 2012
Report of the Directors
For the period from 1st January 2012 to 30th June 2012
The Directors have pleasure in presenting the interim condensed financial statements of Diamond Circle Capital PLC (the "Company") for the period from 1st January 2012 to 30th June 2012.
The Company
The Company was registered on 29 May 2007 with the registration number 119887C and was incorporated and is domiciled in the Isle of Man. The Company was incorporated under the Companies Act 1931 to 2004 as a closed-ended investment Company. Its Ordinary Shares are traded on the London Stock Exchange.
Investment Objective
The investment objective of the Company during the period was to seek to produce long-term appreciation of its portfolio of diamonds by creating a portfolio of polished diamonds for long-term investment. It was intended that diamonds within the Company's diamond portfolio would be traded only when the Investment Adviser believes that there was a profitable opportunity to make a sale or a purchase. Following the results of voting at an Extraordinary General Meeting held on 12 July 2012, the investment objective and policy has been amended, and the Company will now be managed with a view to realising its existing portfolio of diamonds in an orderly and timely manner and returning the net proceeds of sale to Shareholders at such times and in such manner as the Board may in its absolute discretion determine.
Results and dividends
The results for the period and the Company's financial position at the end of the period are shown on page 9 and page 10 respectively.
The Directors expect to declare dividends in the near future, as part of a overall strategy to return capital to shareholders as and when sufficient reserves are available and in such manner as the Board deem appropriate.
Directors
The Directors of the Company who served during the period and at the period end is as follows: -
Patrick Rupert Cottrell (Chairman) Jonathan David Clague (Chairman of Audit Committee)
Clive Parrish
Pavlo Protopapa Resigned 29 February 2012
The Directors interest in the share capital of the Company at 30 June 2012 were:
Number of Ordinary Shares Patrick Rupert Cottrell 5,000
Substantial interest in share capital
As at 30 June 2012, the following holdings represented more than 3 per cent of the Company's issued share capital.
Number of Ordinary Percentage Shares Held Abdullah Chatila 4,629,500 62.3 Diapason Commodities Management S.A. *1,003,867 13.5 UBS AG Zurich 664,150 8.9 Numis Securities 284,115 3.8 * Information provided by Diapason Commodities Management S.A
The Investment Adviser
AUM Asset Management Limited were appointed as Investment Adviser, effective from 20 July 2011.
Listing
On 25 June 2008, the Company's Ordinary Shares were admitted to trading on the Main Market of the London Stock Exchange. Upon incorporation 2 Ordinary Shares were issued at a price of $1 per share. On 25 June 2008, the Company issued 7,432,398 Ordinary Shares in its initial placing at an offer price of $10 per share.
Going Concern
Following the result of the voting on the Company's investment policy at an Extraordinary General Meeting held on 12 July 2012, the Company is embarking on a managed realisation of its existing portfolio in an orderly and timely manner, returning the net proceeds to Shareholders, and accordingly the accounts have been prepared on a break up basis.
The Directors consider that the Company has adequate resources to continue to meet its liabilities as they fall due.
Corporate Governance Statement
The Company is a closed-ended investment Company registered and incorporated in the Isle of Man on 29 May 2007. The Company complies with the corporate governance obligations that are applicable to it under Isle of Man Law. The Combined Code does not directly apply to companies incorporated in the Isle of Man but the Directors have complied with the relevant requirements of the Combined Code to the extent that they consider it appropriate having regard to the Company's size and nature of business. The Board is not presently aware of any respects in which it will depart from this approach and the Board considers that the Company has complied with this approach to corporate governance throughout this accounting period.
The Board of Diamond Circle Capital PLC has developed its internal procedures to be in line with the recommendation of the Combined Code where appropriate and these are monitored on a regular basis. The Directors will continue to comply with the relevant requirements of the Combined Code to the extent that they consider it appropriate.
Responsibilities of the Board
The Board of Directors is responsible for the determination of the investment policy of the Company and for its overall supervision via the investment policy and objectives that it has set out. The Board is also responsible for the Company's day-to-day operations; however, since the Board members are all non-executive, in order to fulfill these obligations, the Board has delegated operations through arrangements with the Investment Adviser and Administrator.
The Board intends to meet at least four times a year at which time the Directors review the management of the Company's assets and all other significant matters so as to ensure that the Directors maintain overall control and supervision of the Company's affairs. The Board is responsible for the appointment and monitoring of all service providers to the Company. Between these quarterly meetings there is regular contact with the Investment Adviser and Administrator. The Directors are kept fully informed of investment and financial controls and other matters that are relevant to the business of the Company and should be brought to the attention of the Directors. The Directors also have access to the Secretary and, where necessary in the furtherance of their duties, to independent professional advice at the expense of the Company.
The Articles of Association provide that unless and until otherwise determined by ordinary resolution of the Company, the Directors (other than alternate Directors) shall be no less than two and no greater than twelve in number. In addition the Directors (other than alternate Directors) shall be entitled to receive by way of fees for their services as Directors such sum as may be determined from time to time by the Board, not exceeding, in aggregate, $200,000 per annum or such other sum as the Company in general meeting shall from time to time determine.
The Board and Committees
The Company has established an Audit Committee, which is due to meet formally at least twice a year. The principal duties of the Audit Committee are to:
- consider the appointment of external auditors;
- discuss and agree with the external auditors the nature and scope of the audit;
- review the scope, results and cost effectiveness of the audit;
- review the independence and objectivity of the auditors;
- review the external auditors' letter of engagement and management letter;
- analyse the key procedures adopted by the Company's service providers;
- review the annual financial statements and interim report and recommend them to the Board for approval;
- consider the requirement of an internal audit function;
In addition where non-audit services are to be provided by the auditors, full consideration of the financial and other implications on the independence of the auditors arising from any such engagement will be considered before proceeding.
The Audit Committee is due to meet twice a year. In addition, there have been a small number of ad hoc meetings of the board to review specific items between the regular scheduled quarterly meetings.
All the Directors are non-executive and therefore a nomination committee is not required. The Company has not established a separate remuneration committee as the Board is satisfied that any relevant issues can be properly considered by the Board or by the established Audit Committee.
The Board has a breadth of experience relevant to the Company and the Directors believe that any changes to the Board's composition can be managed without undue disruption. With any new Director appointment to the Board, consideration will be given as to whether an induction process is appropriate.
Internal Controls
The Board recognises the need for effective high level internal controls. High level controls in operation at the Company include:
- Segregation of duties between relevant functions and departments within the Administrator and the Investment
Adviser;
- consideration of administration reports and portfolio valuations provided by the Administrator; and
- consideration of Investment Adviser reports and analysis.
The Company's administrator, IOMA Fund and Investment Management Limited has a number of internal control functions including a dedicated Compliance Officer whose role includes the maintenance of a log of errors and breaches which are reported to the Board of both the Company and Administrator at each quarterly board meeting.
Relations with Shareholder
The Board believes that the maintenance of good relations with Shareholders is important for the long term prospects of the Company. The Board receives feedback on the views of Shareholders from the corporate broker and the Investment Adviser.
All general meetings of the Company will be held in the Isle of Man. The Company held its annual general meeting on 13 June 2012, and an extraordinary general meeting on 12 July 2012 to consider the proposed change to the investment strategy and policy.
Principal risks and uncertainties
The principal risks facing the Company relate to the Company's investment activities. These risks are market risk (comprising of price risk, interest rate risk, currency risk) liquidity risk, credit risk and off-balance sheet risk.
An explanation of these risks and how they are managed is contained in Company's Audited Financial Statements for the year ended 31 December 2011. Other risk factors facing the Company include the following: Capital Management Risk, Regulatory Risks (including Listing Rules of the UK Listing Authority ("Listing Rules") or Rules of the London Stock Exchange ('LSE Rules") and Taxation. The principal risks and uncertainties have not changed since the publication of the Annual Report.
Directors' Responsibility Statement
For the period from 1st January 2012 to 30th June 2012
To the best of the knowledge of the Directors:
The condensed half-yearly financial statements give a true and fair view of the assets, liabilities, financial position and comprehensive income of the Company and has been prepared in accordance with International Accounting Standards (IAS) 34 'Interim Financial Reporting'.
The Interim Management Statement includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred in the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
For and on behalf of the Board of Directors
Rupert Cottrell
Director
Interim Management Report
For the period from 1st January 2012 to 30th June 2012
MARKET COMMENT
After a promising start, the first half of 2012 eventually proved to be a challenging period for the diamond market.
The seeds of the current weakness had been planted a while ago and are now well documented, e.g. the seemingly ever-worsening European fiscal and banking situation, the protracted slowing down of economic momentum in emerging markets in general and China in particular, and the lack of significant job creation in the US.
Initially, its objectively sound fundamentals enabled the diamond market to very convincingly absorb the aforementioned shocks and to show a very good face against a background of increasing weakness of all "risk assets". But there is no such thing as complete decorrelation these days, and at some stage the diamond market had to be mechanically contaminated by the plight of commodities overall. Beyond exogenous stress, the diamond market also suffered from more endogenous developments: the sharp fall of the Indian rupee to new all-time lows, a dwindling trading liquidity, and, more down to earth, the fact that rough prices remained stubbornly high for too long, logically resulting in excess supply down the line and therefore price pressure all along the value chain from the very last days of spring onwards.
Over the period, the PolishedPrices Composite Rough Diamond Index shed 11%. Polished diamonds demonstrated better resistance, losing only 4.5% during the semester.
Meanwhile, top coloured diamonds continued to register prices close to all-time highs at auctions. Highlights include a 3.54-carat fancy blue that sold for USD 2,434,500 at Sotheby's in New York and a 12.04-carat fancy intense pink, known as the Martian Pink, which sold for an impressive USD 1,452,267 per carat at Christie's spring sale of Hong Kong Magnificent Jewels.
FUND ACTIVITY
Activity was severely hindered by the progressive evaporation of liquidity on the trading front. DCC's Board decided to take some profits in January 2012, subsequently increasing cash levels to 12%. But the sheer lack of momentum in the market place prevented any kind of meaningful arbitrage thereafter. Net cash amounted to 9.94% of assets at the end of the period.
The Fund's NAV consolidated marginally from 7.20 to 7.02 (-2.5%)
Following the acquisition by Mr Chatila of 62.29% of the voting of the company in June 2012, shareholders decided at an Extraordinary General Meeting held on 12 July 2012 that "the Company will now be managed with a view to realising its existing portfolio of diamonds in an orderly and timely manner and returning the net proceeds of sale to shareholders at such times and in such manner as the Board may in its absolute discretion determine."
OUTLOOK
Short-term prospects remain somewhat challenging for the diamond market and should remain so as long as risk aversion is clearly the main topic on the agenda of markets and the industry overall. More concretely, the market will therefore remain vulnerable until liquidity resumes at normal levels. Arguably, the current policies of central banks worldwide should help in that regard, but how long will that process take?
In the meantime, cautiousness should continue to rule and preference be given to the most liquid segments of the markets.
In the longer term, diamond fundamentals remain outstanding and any consolidation on prices of gems, especially the top ones, should therefore be seen as an investment opportunity on a reasonable horizon. After the summer recess, the forthcoming Hong Kong Gems and Jewellery Show will be the next moment of truth for gems.
Diamond Circle Capital PLC
Half-Yearly Condensed Statement of Comprehensive Income
For the period from 1st January 2012 to 30th June 2012
6 month 6 month to to Year ended Note 30 Jun 2012 30 Jun 2011 31 Dec 2011 (Audited) $ $ $ Income Unrealised (loss)/gain on revaluation of investment diamonds 3 (4,098,786) 2,634,114 5,658,240 Net loss on financial asset at fair value through profit or loss - (414) (3,730) Interest income on bank balances - 172 234 Net realised and unrealised foreign exchange (losses)/gains (6,701) 1,898 (1,648) Realised gain/(loss) on sale of investment diamonds 130,200 - (289,146) Realised (loss) on financial asset at fair value through profit and loss - (3,316) - ------------ ------------ ------------ (3,975,287) 2,632,454 5,363,950 ------------ ------------ ------------ Expenses Investment adviser fees 8 (266,364) (370,051) (647,908) Board of experts' fees 9 (100,000) (150,000) (250,000) Valuators' fees 10 (121,409) (100,000) (200,000) Directors' fees (69,623) (56,560) (122,370) Administration fees 11 (57,000) (42,000) (84,000) Safe custody fees (77,151) (65,745) (131,579) Registrar and transfer agent fees (5,938) (9,000) (18,000) Audit fees (14,456) (23,936) (40,780) Professional fees (337,697) (103,341) (187,820) Marketing expenses (75,000) - (80,086) Other expenses (294,290) (54,806) (166,398) (1,418,928) (975,439) (1,928,941) ------------ ------------ ------------ (Loss)/(Profit) for the period/year before taxation (5,394,215) 1,657,015 3,435,009 Taxation - - - Total comprehensive (loss)/income for the period/year after taxation (5,394,215) 1,657,015 3,435,009 ------------ ------------ ------------ Earnings per share - Basic and diluted (cents) 12 (0.73) 0.22 0.46 ============ ============ ============
There are no other items that require disclosure in the Statement of Comprehensive Income.
All operating activities are discontinuing from 12 July 2012.
Half-Yearly Condensed Statement of Financial Position
As at 30th June 2012
30 June 31 December 30 June Note 2012 2011 2011 (Audited) $ $ $ Non-Current Assets Investment diamonds 3 - 47,966,370 47,370,564 ---------------------- --------------------- --------------------- - 47,966,370 47,370,564 Current Assets Assets held for resale 3 42,565,584 - - Cash and cash equivalents 4 5,170,651 5,386,313 4,621,464 Prepayments and debtors 5 136,303 136,936 24,360 ---------------------- --------------------- --------------------- Total current assets 47,872,538 5,523,249 4,645,824 TOTAL ASSETS 47,872,538 53,489,619 52,016,388 Non-Current Liabilities Preliminary expenses 6 - 339,716 631,945 Current Liabilities Trade and other payables 6 951,210 834,360 846,894 TOTAL LIABILITIES 951,210 1,174,076 1,478,839 ---------------------- --------------------- --------------------- Capital and Reserves Issued share capital 7 74,324 74,324 74,324 Share premium 74,249,676 74,249,676 74,249,676 Retained earnings (27,402,672) (22,008,457) (23,786,451) ---------------------- --------------------- --------------------- 46,921,328 52,315,543 50,537,549 ---------------------- --------------------- --------------------- TOTAL EQUITIES AND LIABILITIES 47,872,538 53,489,619 52,016,388 ---------------------- --------------------- --------------------- Net asset value per Ordinary Share 6.31 7.04 7.01 ====================== ===================== =====================
These financial statements were approved by the Board on 29 August 2012.
Half-Yearly Condensed Statement of Changes in Equity
For the period from 1st January 2012 to 30th June 2012
Share Share Retained Capital Premium Earnings Total $ $ $ $ Balance at 1(st) January 2011 74,324 74,249,676 (25,443,466) 48,880,534 Total comprehensive income for the period - - 1,657,015 1,657,015 Balance at 30 June 2011 74,324 74,249,676 (23,786,451) 50,537,549 ======== =========== ============= ============ Total comprehensive income for the period - - 1,777,994 1,777,994 Balance at 31(st) December 2011 74,324 74,249,676 (22,008,457) 52,315,543 Total comprehensive income for the period - - (5,394,215) (5,394,215) Balance at 30 June 2012 74,324 74,249,676 (27,402,672) 46,921,328 ======== =========== ============= ============
Half-Yearly Condensed Statement of Cash Flows
For the period from 1st January 2012 to 30th June 2012
6 months 6 months to to Year ended 31 Dec 30 Jun 2012 30 Jun 2011 2011 (Audited) Note $ $ $ Operating activities Total comprehensive income for the period/year (5,394,215) 1,657,015 3,435,009 Adjustments to reconcile loss before tax to net cash flows Decrease/(increase) in value of investment diamonds 4,098,786 (2,634,114) (5,658,239) Decrease in value of financial assets - 3,730 414 Increase/(decrease) in prepaid expenses and sundry debtors 633 22,538 (90,038) Decrease in creditors and accruals (222,866) (311,885) (616,648) Interest on bank balances - (172) (234) Realised (gain)/loss on sale of investment diamonds (130,200) - 292,461 -------------- ------------- ------------ Net cash flows from operating activities (1,647,862) (1,262,888) (2,637,275) -------------- ------------- ------------ Investing activities Purchase of investment diamonds - - (6,548,800) Proceeds of financial assets designated at fair value through the profit and loss - 3,991,304 3,991,303 Proceeds from sale of investment diamonds 1,432,200 - 8,687,975 Receipt of interest on bank balances - 172 234 -------------- ------------- ------------ Net cash flows from investing activities 1,432,200 3,991,476 6,130,712 -------------- ------------- ------------ Changes in cash and cash equivalents (215,662) 2,728,588 3,493,437 Cash and cash equivalents as at period start 5,386,313 1,892,876 1,892,876 Cash and cash equivalents as at period end 4 5,170,651 4,621,464 5,386,313 -------------- ------------- ------------
Notes to the Condensed Half-Yearly Financial Statements
For the period from 1st January 2012 to 30th June 2012
1. General information
Diamond Circle Capital PLC, ("the Company") is a closed-ended investment Company registered and incorporated in the Isle of Man on 29 May 2007. The Company was formed to invest in polished diamonds and has no fixed life. The Company was incorporated under the Companies Act 1931 to 2004 and is a limited company. The Company was launched on 29 May 2007 and commenced operations on 1 July 2008.
The investment objective of the Company during the period was to seek to produce long-term appreciation of its portfolio of diamonds by creating a portfolio of polished diamonds for long-term investment. It was intended that diamonds within the Company's diamond portfolio would be traded only when the Investment Adviser believes that there was a profitable opportunity to make a sale or a purchase. Following the results of voting at an Extraordinary General Meeting held on 12 July 2012, the investment objective and policy has been amended, and the Company will now be managed with a view to realising its existing portfolio of diamonds in an orderly and timely manner and returning the net proceeds of sale to Shareholders at such times and in such manner as the Board may in its absolute discretion determine.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of the financial statements are set out below.
2.1 Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2012 have been prepared in accordance with IAS 34 - Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the company's annual financial statements as at 31 December 2011. Following the result of the voting on the Company's investment policy at an Extraordinary General Meeting held on 12 July 2012, the Company is embarking on a managed realisation of its existing portfolio in an orderly and timely manner, and returning the net proceeds to Shareholders, the accounts have been prepared on a break up basis.
2.2 Diamonds
Diamonds are initially recognised at cost; this is calculated as the fair value of the consideration given including the transaction costs associated with acquiring the diamonds.
Subsequent to initial recognition, the investment diamonds were previously stated at fair values which reflected the market conditions at the balance sheet date. Following the change to the break up basis as described in note 2.1 the investment diamonds are stated at net realisable value, which reflects the market conditions and expected realisable value at the balance sheet date. Gains or losses arising from changes in the values of the investment diamonds are included in the Statement of Comprehensive Income in the period in which they arise.
Following a sealed bid auction of the Company's portfolio on 6 August 2012 sales were agreed on 5 of Company's diamonds, as detailed in the subsequent event note. These assets have been valued at net realisable value being the total gross sales less costs to sell.
The remaining stones that have not been sold post balance sheet have been valued on the basis of a report issued on 31 May 2012 by the Valuators (see Note 3), which projected the expected sales over a 3, 6 and 12 month period. For the purposes of these interim reports the Directors have elected to adopt the 3 month projection, being the Directors best estimate of the realisable value of the stones as at 30 June 2012.
2.3 Changes and future changes in accounting standards
The accounting policies adopted in the preparation of the condensed financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2011, except for the adoption of amended, improved and new standards and interpretations detailed below.
Title New since Status Issue date Effective date
March 2011 of the original (annual periods standard beginning on
or after)
Effective for annual periods (and interim periods therein) ending 30 June 2012 and thereafter:
2010 Improvements to IFRSs No Mandatory May 2010 Various
IAS 24 Amendment - Related
Party Disclosures No Mandatory November 2009 1 January 2011
IFRIC 14 Amendment - Prepayments No Mandatory November 2009 1 January 2011
of a Minimum Funding Requirement
Amendments to IFRS 7 - Disclosures - No Mandatory October 2010 1 July 2011
Transfers of Financial Assets
Amendments to IFRS 1 - Severe No Mandatory December 2010 1 July 2011
Hyperinflation and Removal of
Fixed Dates for First-time Adopters
Amendments to IAS 12 - Deferred No Mandatory December 2010 1 January 2012
Tax: Recovery of Underlying Assets
Effective for annual periods (and interim periods therein) ending 30 June 2013 or thereafter:
IFRS 9 - Financial Instruments: No May early adopt November 2009 1 January 2015
(issued in 2009)
IFRS 9 - Financial Instruments No May early adopt October 2010 1 January 2015
(issued in 2010)
IFRS 13 - Fair Value Measurement Yes May early adopt June 2011 1 January 2013
Title New since Status Issue date Effective date
March 2011 of the original (annual periods standard beginning on
or after)
IAS 27 (Revised) - Separate Yes May early adopt May 2011 1 January 2013
Financial Statements
Amendment to IAS 1 - Presentation Yes May early adopt June 2011 1 July 2012
of Items of Other Comprehensive Income
Amendment to IAS ew - Offsetting Yes May early adopt December 2011 1 January 2014
Financial Assets and Financial Liabilities
Amendments to IFRS 7 - Disclosures - Yes December 2011 1 January 2013
Offsetting Financial Assets and
Financial Liabilities
Amendments to IFRS 7 and IFRS 9 - Yes May early adopt December 2011 1 January 2015
Mandatory Effective Date and
Transition Disclosures
2.4 Segment reporting
An operating segment is a component of an entity:
(a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);
(b) whose operating results are regularly reviewed by the Board and along with the Investment Advisor to make decisions about resources to be allocated to the segment and assess its performance; and
(c) for which discrete financial information is available
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.
The Directors are of the opinion that the Company is engaged in a single operating segment being investment in diamond assets in one geographical area, being the Isle of Man.
2.5 Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources or estimation of uncertainty at the period end, that have a significant risk or causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Valuation of investment diamonds
The realisable value of the Company's investment diamonds of $42,565,584 (2011: $47,966,370) was determined by professionally qualified independent Valuators, Mr Teakle and Mr. Block, acting in their capacity as external Valuators, with the exception of the 5 stones sold as a result of the sealed bid auction on 6 August 2012, which have been valued at the net realisable value being gross sales less cost of sales totalling $9,695,584.
Each Valuator provided a portfolio valuation based on expected sales over a 3, 6 and 12 month period to the Directors as at 31 May 2012 on a diamond-by-diamond basis, and the Directors agreed to adopt the 3 month projection as the basis of valuation to prepare the financial statements. The period end portfolio consists of both colourless and coloured diamonds and each type is valued slightly differently. Approximately 70% of the period end portfolio consists of colourless diamonds and 30% of coloured diamonds.
The following significant assumptions and techniques are used by the valuators in the valuation of colourless and coloured investment diamonds:
Colourless diamonds
The valuation of the colourless diamonds is driven by the Rapaport price guidance, market conditions, the uniqueness of each diamond together with the knowledge and professional judgement of the external valuators.
Coloured diamonds
There is no equivalent to the Rapaport price guidance for coloured diamonds as these types of diamonds tend to more unique and rarer than colourless diamonds. The assumptions, judgements and estimates in the valuation of coloured diamonds takes account of the following factors:
-- current valuations available for similar diamonds
-- recent agreed sales prices of diamonds sold on the open market usually through public auction houses
-- market conditions and activity levels -- knowledge, professional judgement and expertise of the external valuators.
Although transaction evidence underpins the valuation process, the Valuators must also reflect the realities of the current market. In this context Valuators must use their knowledge and professional judgement and not rely upon historic market sentiment based on historic transaction comparables. In these circumstances, there is likely to be greater uncertainty in respect of the valuations. There is no assurance that the estimated values resulting from the valuation process would be reflected in the actual sales proceeds, even if the sales occurred shortly after the valuation date.
3. Assets held for resale 30 Jun 2012 31 Dec 2011 30 Jun 2011 $ $ $ Cost of diamonds on hand at start of period 57,262,050 59,690,370 59,690,370 Cost of diamonds purchased - 6,548,800 - Disposals at cost (1,302,000) (8,977,120) - ------------- ------------ ------------- Cost of diamonds on hand at end of period 55,960,050 57,262,050 59,690,370 Unrealised loss on revaluation of investment diamonds (13,394,466) (9,295,680) (12,319,806) Market value of diamonds on hand at end of period 42,565,584 47,966,370 47,370,564 ------------- ------------ -------------
The diamonds sold as a result of the sealed bid auction on 6 August 2012, have been valued at the net realisable value being gross sales less cost to sell, totaling $9,695,584.
The diamonds that were not sold post balance sheet were valued as at the 31 May 2012 by two professionally qualified Valuators acting in their capacity of independent, external Valuators. The two Valuators used are Mr. Teakle and Mr. Block. Mr. Teakle is a graduate gemologist with a diploma from the National Association of Goldsmiths. Mr. Block attended New York University's Institute of Fine Arts and has been a specialist and an auctioneer in the diamond field since 1970. The report was commissioned by the Board to establish the expected sales over a 3, 6 and 12 month period, and for the purpose of the financial reports the Directors have elected to adopt the 3 month projected sales as the basis of valuation.
However, the Valuators have also used their market knowledge and professional judgment and not simply relied upon historical transactions for comparison. As a result of the level of professional judgment used in preparing the valuations, the amounts ultimately realised in respect of any given diamond may differ from the valuations in the balance sheet.
The principal risk faced by the Company is the fluctuation in the price of diamonds. The carrying value of the diamonds is based on the valuation provided by independent Valuators and the fair value includes an element of estimation on part of the Valuations.
4. Cash and cash equivalents 30 Jun 2012 31 Dec 2011 30 Jun 2011 $ $ $ Cash and cash equivalents 5,170,651 5,386,313 4,621,464 Represented by: Cash at bank 5,170,651 5,386,313 4,621,464 ============ ============ ============ 5. Prepayments and debtors 30 Jun 2012 31 Dec 2011 30 Jun 2011 $ $ $ Prepaid expenses - 23,604 9,216 Prepaid insurance - 96,314 - Sundry debtors 53,943 - - VAT receivable 82,360 17,018 15,144 136,303 136,936 24,360 ============ ============ ============ 6. Trade and other payables 30 Jun 2012 31 Dec 2011 30 Jun 2011 Non-current $ $ $ Preliminary expense payable - 339,716 631,945 ------------ ------------ ------------ Current Administration fees payable 26,340 24,824 21,000 Audit fees payable 12,743 24,869 11,275 Directors' fees payable 28,961 41,714 23,847 Shariah board fees 15,000 80,000 65,000 Investment adviser fee 42,942 45,689 63,754 Board of experts fees - - 25,000 Preliminary expense payable 631,839 584,172 584,172 Registrar fees and Agent fees payable 4,656 4,240 4,219 Other professional fees 14,406 1,299 16,347 Safe custody fees payable 28,900 27,553 32,280 Insurance 145,423 - - ------------ ------------ ------------ 951,210 834,360 846,894 951,210 1,174,076 1,478,839 ============ ============ ============ 7. Share capital 30 Jun 2012 31 Dec 2011 30 Jun 2011 $ $ $ Authorised share capital 100,200,000 Ordinary Shares of $0.01 each 1,002,000 1,002,000 1,002,000 1,002,000 1,002,000 1,002,000 ============ ============ ============ Issued share capital 7,432,400 Ordinary Shares of $0.01 each 74,324 74,324 74,324 74,324 74,324 74,324 ============ ============ ============
The shareholders of the Company have the right to receive notice of, and to attend and vote at, general meetings of the Company and each holder of Ordinary Shares being present in person or by attorney at a meeting upon a show of hands has one vote and upon a poll each such holder present in person or by proxy or by attorney has one vote in respect of each Ordinary Share held by him. On winding up, the Shareholders have the right to receive a part of the assets of the Company.
The Articles contains provisions as to the rights of pre-emption on the allotment of Ordinary Shares, the Directors have obtained a general authority, granted pursuant to a composite special resolution passed by the members of the Company, to allot Ordinary Shares for cash on a non-pre-emptive basis otherwise than in connection with the Offer. The Directors will only consider issuing further Ordinary Shares at or above the then prevailing estimated Net Asset Value per Share.
8. Investment Adviser fees
The Company pays to the Investment Adviser an advisory fee equal to a rate of 1.0%, (expressed annually) of net assets value (before deduction of that months management fee and before the deduction of any accrued performance fee). The advisory fee is payable monthly in arrears.
The Investment Advisor is entitled to a Performance Fee to be calculated in respect of each period of 3 years ending on 31 July in each relevant year (a "Calculation Period"). The Performance Fee is deemed to accrue on a monthly basis as at the calculation date of each Net Asset Value.
For each Calculation Period, the Performance Fee will be an amount equal to 11.5 per cent. of the increase in the Net Asset Value as calculated at the end of the Calculation Period over the Base Net Asset Value provided such increase is equal to or exceeds 6.5 per cent per annum. (the "Trigger Return") and will be paid net of any Interim Payments (as defined below) that may have been paid by the Fund in respect of the relevant Calculation Period. The "Base Net Asset Value" is the highest Net Asset Value achieved as at the end of any previous Calculation Period (if any), or, in the case of the first Calculation Period, the Net Asset Value at the Commencement Date. The Performance Fee in respect of each Calculation Period will be calculated by reference to the Net Asset Value before deduction of the Performance Fee save that any Performance Fee will be reduced to the extent that payment would cause the increase in Net Asset Value at the end of the relevant Calculation Period to be equal to or less than the Trigger Return. The Net Asset Value at the end of a Calculation Period will be adjusted for any increases or decreases in Net Asset Value arising from issues (including the sale or re-issue of ordinary shares held in treasury), repurchases or redemptions of ordinary shares.
No Performance Fee is payable in respect of a Calculation Period if the performance of the Fund is less than the Trigger Return. In addition, if in any Calculation Period the performance of the Fund is less than the Trigger Return, no Performance Fee will be payable in subsequent Calculation Periods until the performance of the Fund exceeds the amount by which the performance in such prior Calculation Period is less than the Trigger Return.
9. Board of experts' fees
The Company pays to each Expert a fixed fee of $100,000 per year in installments on a quarterly basis at the end of each quarter. There were two Experts in the Board of Experts up to 30 June 2012 resulting in an interim charge of $100,000.
10. Valuators' fees
The Company pays to each Valuator a fixed fee of $100,000 per year in installments on a monthly basis at the end of each month. There are two Valuators resulting in a standard annual charge of $200,000. During the period an additional $21,409 was charged in relation to production of reports outside those prepared in the normal course of business.
11. Administration fees
A per annum basis point fee is paid quarterly in arrears, to the Administrator, based on the net asset value as of each valuation day, in accordance with the following schedule
Amount Basis Points $0 to $250,000,000 8 $250,000,001 to $500,000,000 6 $500,000,001 to $750,000,000 4 $750,000,001 and above 2
Administration fees are subject to a minimum monthly fee of $7,000 or such other fees as may be agreed on normal commercial terms between the Administrator and the Company from time to time. The administration fees payable for the period were $57,000 (2011: $42,000).
12. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss attributable to shareholders by the weighted average number of ordinary shares outstanding during the year.
30 Jun 2012 31 Dec 2011 30 Jun 2011 (Loss)/profit attributable to shareholders ($5,394,215) $3,435,009 $1,657,015 Weighted average number of ordinary shares in issue 7,432,400 7,432,400 7,432,400 Basic and diluted earnings per share (cents) (0.73c) 0.46c 0.22c
There are no dilutive instruments and therefore basic and diluted earnings per share are identical.
13. Reconciliation of net asset value 30 Jun 2012 31 Dec 2011 30 Jun 2011 Published Net Asset Value attributable to Ordinary Shareholders 52,203,414 53,538,448 52,269,535 Cumulative additional preliminary expenses written off in accordance with IAS 38. In accordance with the Company's prospectus, the preliminary expenses are charged to the Company as an expense on a monthly basis over a period of five years. (631,803) (923,888) (1,216,117) Prepaid storage costs of CHF250,000 amortized over a period of five years for valuation purposes and written off in the financial statements (52,704) (77,700) (102,696) Adjustments made to expense accruals (148,138) (9,841) 4,329 Adjustment to revalue the portfolio (4,031,941) - - on net realisable basis from fair value basis Adjustment to performance fee - (211,476) - Adjustment to revalue a diamond from directors valuation to comply with the accounting policy and the requirements of IAS 40 (417,500) - (417,502) ============= ============ ============= Net assets attributable to Ordinary Shareholders 46,921,328 52,315,543 50,537,549 ============= ============ ============= 14. Related party transactions
Directors' fees
During the period the fees of $69,623 (period ended 30 June 2011 $56,560 and year ended 31 December 2011 $120,630) were paid to the Directors. As at 30 June 2012, $28,961 (period ended 30 June 2011 $23,847 and year ended 31 December 2011 $41,714) was outstanding and included in accrued expenses.
Directors' interests
Rupert Cottrell has a total interest in 5,000 Ordinary Shares as at 30 June 2012 (31 December 2011: 5,000 Ordinary Shares, 30 June 2011: 5,000 Ordinary Shares).
15. Subsequent Events
As at 31 July 2012 the published Net Asset Value was $6.82.
On the 6 August 2012, the Board unanimously agreed the sale of 5 diamonds by way of sealed bid auction. The net sales, calculated as gross sales less cost to sell, totalled $9,695,584 representing a realised loss of ($3,331,716)..
Portfolio Statement As at 30th June 2012 Class of investments Market value % of $ net assets ---------------------------- ------------- ----------- Diamonds Diamond > 65 ct 13,200,000 28.13 Diamond > 50 ct 7,500,000 15.98 Diamond > 20 ct 5,232,388 11.15 Diamond > 10 ct 8,175,250 17.42 Diamond > 5 ct 7,600,000 16.20 Others * 857,946 1.83 Total investments 42,525,584 90.72 ---------------------------- ------------- -----------
* No individual position is more than 5% of total portfolio.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DGGDCRXGBGDD
1 Year Diamond Cap Chart |
1 Month Diamond Cap Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions