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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Justice Hldgs | LSE:JUSH | London | Ordinary Share | VGG5209A1084 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 856.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMJUSH
RNS Number : 3990L
Justice Holdings Limited
29 July 2011
JUSTICE HOLDINGS LIMITED
Symbol: JUSH 29 July 2011
Interim Report for the period commenced 7 February 2011 and ended 30 June 2011 (Unaudited)
Justice Holdings Limited ("Justice" or the "Company") today publishes its Interim Report for the period commenced 7 February 2011 and ended 30 June 2011.
Justice was admitted to the London Stock Exchange (the "Admission") on 17 February 2011, raising gross proceeds of GBP900.0 million in its initial public offering ("IPO"). As set out in the Justice Holdings Limited Prospectus dated 14 February 2011 (the "Prospectus"), the Company was formed with the strategy of acquiring a target business which is expected to have an enterprise value of between GBP1.0 billion and GBP7.0 billion, though a target business with a smaller or larger enterprise value may be considered. The Company's efforts in identifying a prospective target business are not limited to a particular industry or geographic region. The Board of Directors (the "Board") has commenced the implementation of the Company strategy by beginning the process to review a number of acquisition targets. A copy of the Prospectus has been submitted to the National Storage Mechanism and is available for viewing at: www.hemscott.com/nsm.do.
Financial Position
On 17 February 2011, Justice raised gross proceeds of GBP900.0 million and, as of 30 June 2011, has 90,057,000 ordinary shares in issue.
Total expenses incurred by the Company in connection with the Admission were GBP19.0 million, which was GBP2.0 million below the estimate disclosed in the Prospectus of GBP21.0 million.
As at 30 June 2011, the Company had cash and cash equivalent balances of approximately GBP882.1 million (equivalent to GBP9.78 per ordinary share), and net assets attributable to ordinary shareholders of GBP881.9 million. The net proceeds from the IPO, which are easily accessible when required, have been invested in instruments available from the Sterling denominated money markets and/or are being held at commercial banks that are at least AA rated or better at the time of deposit.
Period ended
(in GBP'000) 30 June 2011
Administration costs (42,520)
Costs associated with Admission (19,003)
OPERATING LOSS (61,523)
Finance income 1,428
LOSS FOR THE PERIOD (60,095)
Basic loss per share (pence) 66.73
Adjusted loss per share (pence) 45.63
Priority Return Sum per share (pence) 978
Administration costs include a non-cash charge of GBP41,360. Further details are available in note 10 of the notes to the interim financial statements.
The adjusted loss used in the adjusted loss per share does not include the costs associated with the Admission. The Priority Return Sum per share has been calculated with reference to the expected minimum value per share that ordinary shareholders are entitled to on a winding up of the Company as set out in the Prospectus. Further details are available in note 7 of the notes to the interim financial statements.
Enquiries:
International Administration (Guernsey) Limited
Company Secretary
Attn: Mark Woodall
Tel: +44 1481 723450
JUSTICE HOLDINGS LIMITED
Interim Report for the Period to
30 June 2011
Company overview
The Directors present their report together with the unaudited interim financial statements of Justice Holdings Limited for the period ended 30 June 2011. The first year end for the Company is 31 December 2011.
Justice Holdings Limited was incorporated in the British Virgin Islands on 7 February 2011 and its principal activity is that of a holding company formed with the strategy of acquiring a target business (the "Acquisition") which is expected to have an enterprise value of between GBP1.0 billion and GBP7.0 billion, though a target business with a smaller or larger enterprise value may be considered. The Company's efforts in identifying a prospective target business are not limited to a particular industry or geographic region.
Results and Dividends
The results for the period are shown in the unaudited Income Statement.
The Directors do not recommend the payment of a dividend in respect of the period ended 30 June 2011.
Principal risks and uncertainties
The Company holds a significant portion of its net assets as cash and cash equivalents. To mitigate against the risk of default by one or more of its counterparties, the Company currently holds its assets in instruments available from the Sterling denominated money markets and/or at commercial banks that are at least AA rated or better at the time of deposit. As of 30 June 2011, approximately GBP868.7 million was held in AAA rated instruments available from the Sterling denominated money markets. The Board regularly monitors interest rates offered by, and the credit ratings of, current and potential counterparties, to ensure that the Company remains in compliance with its stated investment policy for its cash balances.
The Company may not be able to identify or complete a suitable acquisition. The success of the Company's business strategy is dependent on its ability to identify sufficient suitable acquisition opportunities and to complete an Acquisition on terms that are consistent with the Company's stated objectives. While the Board believes that an Acquisition can be completed before the third anniversary of Admission there is no certainty that it will achieve this objective if it is unable to identify a suitable target and execute a transaction.
The principal risk therefore is that an Acquisition does not take place by 17 February 2014. At that time, the Board will recommend to Shareholders either that the Company be wound up by ordinary resolution (in order to return to Shareholders, to the extent assets are available, the Priority Return Sum and any other remaining distributable assets) or that the Company continue to pursue the Acquisition for a further year. A more comprehensive description of risks and uncertainties was included in the Prospectus.
JUSTICE HOLDINGS LIMITED
Interim Report for the Period to
30 June 2011
Directors
The Directors of the Company who served during the period and subsequently, all of whom are Non-Executive, are:
Lord Myners of Truro, Chairman (Independent) (appointed 7 February CBE 2011) Alun Cathcart Independent Non-Executive (appointed 7 February Director 2011) Nouriel Roubini Independent Non-Executive (appointed 7 February Director 2011) Miguel Pais do Amaral Non-Executive Director (appointed 7 February 2011) Nicolas Berggruen Non-Executive Director (appointed 7 February 2011) Martin E. Franklin Non-Executive Director (appointed 7 February 2011) William A. Ackman Non-Executive Director (appointed 19 April 2011) Alan C. Parker Independent Non-Executive (appointed 19 April Director 2011)
Each of Lord Myners, Mr. Cathcart, Mr. Roubini, Mr. Amaral and Mr. Parker are sometimes referred to herein individually as a "Non-Founder Director" and collectively as the "Non-Founder Directors".
Secretary
The Secretary of the Company during the period and subsequently is:
International Administration (Guernsey) Limited
Responsibility statement
The Directors confirm that this set of interim financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the Interim Report herein includes a fair view of the information required by the Financial Services Authority's Listing Rules, including the Disclosure and Transparency Rules 4.2.7 and 4.2.8, namely:
-- an indication of important events that have occurred during the period commenced 7 February 2011 and ended 30 June 2011 and their impact on the interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related party transactions in the period commenced 7 February 2011 and ended 30 June 2011.
By Order of the Board
Lord Myners of Truro, CBE 29 July 2011 Chairman
Registered Office
Nemours Chambers Road Town Tortola British Virgin Islands
Independent review report to the members of Justice Holdings Limited
Introduction
We have been engaged by the Company to review the interim financial statements in the Interim Report for the period commenced 7 February 2011 and ended 30 June 2011, which comprises the Company Income Statement, Company Balance Sheet, Company Statement of Changes in Equity, Company Statement of Cash Flows and related notes. We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
Directors' responsibilities
The Interim Report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the interim financial statements in the Interim Report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of the interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements in the Interim Report for the period commenced 7 February 2011 and ended 30 June 2011 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP Chartered Accountants 1 Embankment Place London WC2N 6RH 29 July 2011
Notes:
(a) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
JUSTICE HOLDINGS LIMITED
Company Income Statement For the Period Commenced 7 February 2011 and ended 30 June 2011
2011 Unaudited Note GBP'000 Administration Costs (42,520) Costs associated with Admission (19,003) Operating loss 5 (61,523) Finance income 1,428 Loss before tax (60,095) Taxation 6 - Loss for the period (60,095)
The operating loss for the period relates to losses from continuing operations and there has been no other comprehensive income in the period.
2011 Notes Pence Loss per share attributable to the ordinary equity holders of the Company: - Basic loss per share 7 66.73 - Diluted loss per share 7 66.73
The notes on pages 9 to 16 are an integral part of these financial statements
JUSTICE HOLDINGS LIMITED
Company Balance Sheet At 30 June 2011
2011 Unaudited Note GBP'000 Current assets Cash and cash equivalents 8 882,137 Total current assets 882,137 Current liabilities Other payables and accrued expenses (272) Total current liabilities (272) Net assets and net current assets 881,865 Equity Called up share capital 9 900,600 Retained Loss (18,735) Total shareholders' equity 881,865
Approved on behalf of the Board by
Lord Myners of Truro, CBE
29 July 2011
Chairman
The notes on pages 9 to 16 are an integral part of these financial statements
JUSTICE HOLDINGS LIMITED
Company Statement of Shareholders Equity
At 30 June 2011
(GBP'000)
Share Retained Note capital Loss Total Loss for the period - (60,095) (60,095) Issue of ordinary share capital 9 900,570 - 900,570 Issue of Founder shares 9 15 - 15 Issue of Founder securities 9 15 - 15 Reserve for Founder Shares, Founder Securities and Share Matching Awards 10 - 41,360 41,360 Balance as at 30 June 2011 900,600 (18,735) 881,865
The notes on pages 9 to 16 are an integral part of these financial statements
JUSTICE HOLDINGS LIMITED
Statement of Cash Flows For the Period Commenced 7 February 2011 and ended 30 June 2011
2011 Unaudited Notes GBP'000 Cash flows from operating activities Cash consumed by operations 11 (378) Net cash flows from operating activities (378) Cash flows from investing activities Interest received 1,428 Net cash flows from investing activities 1,428 Cash flows from financing activities Costs paid in association with Admission (19,003) Proceeds from issue of Founder Shares and Founder Securities 30 Proceeds from issue of ordinary shares 900,060 Net cash flows from financing activities 881,087 Net increase in cash and cash equivalents 882,137 Cash and cash equivalents at start of the period 8 - Cash and cash equivalents at end of the period 8 882,137
The notes on pages 9 to 16 are an integral part of these financial statements
JUSTICE HOLDINGS LIMITED
Notes to the Interim Financial Statements
30 June 2011
1 General information
The Company was incorporated in the British Virgin Islands on 7 February 2011. The address of the Company's registered office is Nemours Chambers, Road Town, Tortola, British Virgin Islands.
The Company's ordinary shares are listed on the London Stock Exchange.
The interim financial information was approved and authorised for issue in accordance with a resolution of the Directors on 29 July 2011.
The financial information contained in the interim financial statements is unaudited. The Company Income Statement, Company Statement of Changes in Equity and Company Statement of Cash Flows for the interim period commenced 7 February 2011 and ended 30 June 2011, and the Company Balance Sheet as at 30 June 2011 and related notes have been reviewed by the auditors and their report to the Company is set out herein.
2 Basis of preparation
These interim financial statements are prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting'. They do not include all of the information required for full annual financial statements. As the Company was incorporated on 7 February 2011, there is no comparative information.
The Directors have, at the time of approving the interim financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, the Company continues to adopt the going concern basis of accounting in preparing the interim financial statements.
The interim financial statements and notes thereto are presented in Pounds Sterling (GBP), which is the Company's presentation currency and are rounded to the nearest thousand.
3 Accounting policies
The accounting policies applied in these interim financial statements are consistent with those expected to be applied in the annual financial statements for the year ending 31 December 2011.
3.1 Standards, amendments and interpretations
The Company adopted all current International Financial Reporting Standards ("IFRSs"), as adopted by the European Union, upon incorporation. There are no new accounting standards that will have an impact on these interim financial statements.
3.2 Segmental reporting
IFRS 8 requires the Company to disclose information about its operating segments and the geographic areas in which it operates. It requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entity's chief operating decision maker in order to allocate resources to the segment and assess its performance. As no operating activities are carried out in the Company, no operating segments can be identified and therefore no segmental information has been presented.
3.3 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits held at call with banks, and other short-term highly liquid investments. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, generally have an original maturity of 90 days or less and are subject to an insignificant risk of adverse changes in value. However, certain deposits of greater duration can be classified as cash equivalents if the funds can be withdrawn at short notice with an insignificant risk of adverse changes in value.
3.4 Share based payments
The Company operates equity-settled, share-based arrangements under which it receives services as consideration for equity shares of the Company.
The fair value of the grant of Founder Shares, Founder Securities and Share Matching Awards is recognised as an expense.
The total amount to be expensed is determined by reference to the fair value of the awards granted:
-- including any market performance condition;
-- excluding the impact of any service and non-market performance vesting conditions; and
-- including the impact of any non-vesting conditions.
Non-market vesting conditions are included in assumptions about the number of awards that are expected to vest. The total expense is recognised in the income statements with a corresponding credit to equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
3.5 Finance income
Finance income is accounted for on an accrual basis using the effective interest method and represents income in relation to cash and cash equivalent assets.
4 Critical accounting judgements and key sources of estimation uncertainty
The preparation of the interim financial statements requires the use of certain critical estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the interim financial statements are disclosed below:
The terms of the Founder Shares and Founder Securities were summarised in the Prospectus. The successful Admission reflects, therefore, an acceptance of the terms of the Founder Shares and Founder Securities. Management has also considered, at the grant date, the probability of an Acquisition being completed, and potential range of values for the Founder Shares and Securities, based on the circumstances at the grant date. Overall it has been concluded that the fair value of the Founder Shares, the Founder Securities and the share based payments calculated using the Black Scholes simulation model has been charged to the income statement with a corresponding credit to equity and is charged over the vesting period of the relevant instrument. A summary of the terms of the Founder Shares and Founder Securities and the Share Matching Awards are set out in notes 9 and 10.
5 Operating loss
The operating loss for the period has been calculated after deducting the following:
2011 GBP'000 Costs associated with Admission (i) 19,003 Non-Founder Director fees (ii) 510 Charge Related to Founder Shares and Founder Securities (see note 10) 41,211 Charge Related to Share Matching Awards (see note 10) 149 Other costs 650 61,523
(i) The costs associated with the Admission include placing and admission fees, fees and expenses payable under the Placing Agreement, legal, accounting, registration, printing, advertising and distribution costs and any other applicable expenses incurred solely for the purpose of the Admission. These costs have been expensed as incurred.
(ii) The Non-Founder Director fees have been paid in the form of ordinary shares issued to the Non-Founder Directors.
6 Taxation
The Company is not a financial services company under the British Virgin Island Income Tax Law and is therefore subject to British Virgin Island income tax at a rate of 0 per cent. If the Company derives any income from the ownership or disposal of land in the British Virgin Islands, such income will be subject to tax at the rate of 20 per cent. It is not expected that the Company will derive any such income.
7 Earnings per share
Adjusted Loss Diluted loss Loss per share per share per share Loss attributable to ordinary shareholders 60,095 60,095 41,092 Pence per ordinary share 66.73 66.73 45.63
Basic loss per ordinary share is calculated by dividing the loss attributable to ordinary shareholders of the Company of GBP60,095,000 by the weighted average number of ordinary shares in issue during the period of 90,054,000.
Diluted earnings per share equal basic earnings per share at 30 June 2011 as the exercise of the Share Matching Awards by the Non-Founder Directors is not dilutive, given the losses arising.
The adjusted loss used in the adjusted loss per share does not include the costs associated with the Admission of GBP19,003,000. The Directors believe that the presentation of adjusted basic earnings per ordinary share assists with understanding the underlying performance of the Company.
The Founder Shares and Founder Securities are not included in the EPS calculation as neither of the Founder Shares nor the Founder Securities has the right to participate in earnings.
Priority Return Sum per share (GBP'000) Cash raised (Net of Founder Shares and Founder Securities) 900,060 Costs associated with Admission (19,003) Priority Return Sum 881,057 Shares in issue 90,057 Pence per ordinary share 978
The Directors believe that the presentation of the Priority Return Sum assists the users of the interim financial statements in understanding the current value that would be returned to ordinary shareholders on winding up in the event that no Acquisition takes place.
8 Cash and cash equivalents
Cash and cash equivalents are invested in instruments available from the sterling denominated money market and/or deposited with banks holding credit-ratings 2011 as follows: GBP'000 AAA 868,742 AA 13,395 Cash at banks and cash equivalents 882,137
The Company aims to mitigate the risk of default by one or more of its counterparties, regularly monitoring interest rates offered by, and the credit ratings of, current and potential counterparties, to ensure that the Company remains in compliance with its stated investment policy for cash balances.
9 Called up share capital
2011 GBP'000 Authorised: Unlimited number of Ordinary shares at GBP10 per share - 15,000 Founder Shares at GBP1 per share 15 15,000 Founder Securities at GBP1 per share 15 Issued and fully paid: 90,057,000 Ordinary shares at GBP10 per share 900,570 15,000 Founder Shares (Class A shares) at GBP1 per share 15 15,000 Founder Securities (Class B shares) at GBP1 per share 15 90,057,000 Ordinary shares at GBP10 per share 900,600
Ordinary shares
No shares were issued on incorporation. The Company's issued ordinary share capital consists of 90,057,000 ordinary shares. There are no shares held in Treasury, therefore the total number of shares with voting rights in Justice is 90,057,000 ordinary shares of no par value. Each share holds one voting right.
Founder Shares (Class A shares)
If the Company achieves its strategy of completing an Acquisition before 17 February 2014, the Founder Shares can, in aggregate, be converted at the holder's option into ordinary shares equal to 6.67 per cent of the then-issued ordinary shares of the Company. The Founder Shares do not carry any dividend rights and do not carry voting rights except in respect of any variation or abrogation of class rights.
Founder Securities (Class B shares)
If the Company achieves its strategy of completing an Acquisition before 17 February 2014 and a performance condition is satisfied, the Founder Securities can, in aggregate, be converted at the holder's option into ordinary shares with value equal to 15% of the increase in the share price since the date of acquisition.
The performance condition will be satisfied if, within five years from the completion of an Acquisition, the closing share price reaches either of the following conditions for 20 out of 30 business days:
-- an equivalent of a compound rate of return of 8.5% on the share from the Admission value of GBP10 and from date of Acquisition; or
-- an increase of 25% of the share price from the Admission value of GBP10.
The performance condition can also be satisfied in certain circumstances after the occurrence of a change of control of the Company.
The Founder Shares do not carry any dividend rights and do not carry voting rights except in respect of any variation or abrogation of class rights.
10 Reserve for Founder Shares, Founder Securities and Share Matching Awards
Justice Holdings Limited has outstanding Founder Shares and Founder Securities sold to its Founders and Share Matching Awards issued to its Non-Founder Directors, all of which are described in detail in the Prospectus. Such securities and awards have been accounted for in accordance with "IFRS 2- Share Based Payment". The total value of the securities and awards that were issued during the period ended 30 June 2011 was GBP42,554,000, comprised of GBP22,651,000 for the Founder Shares and GBP18,560,000 for the Founder Securities (both of which amounts were expensed during the period), and GBP1,343,000 for the Share Matching Awards (GBP149,000 of which was expensed during the period). Accordingly, the aggregate non-cash charge relating to the Founder Shares, Founder Securities and the Share Matching Awards for the period ended 30 June 2011 was GBP41,360,000.
Founder Shares and Founder Securities
A summary of the key terms of the Founder Shares and Founder Securities are set out in note 9.
The Company has the option to settle its obligations under the terms of the Founder Shares and Founder Securities by issuing shares or the equivalent in cash. As set out in note 4, the Company expects to settle any future obligations by the issuance of shares. The Founder Shares and Founder Securities are deemed to have vested immediately as no service conditions related to their issuance are attached to them.
Founder Shares Founder Securities No of securities sold on 14 February 2011 and in place as at 30 June 2011 15,000 15,000 Market value of ordinary shares at grant date GBP9.93 GBP9.93 Exercise price Nil Nil Vesting period Immediate Immediate Fair Value of securities at grant date (per share) GBP1,510 GBP1,237 Black-Scholes, Binomial Valuation models Black-Scholes Tree Expected dividend growth Nil Nil Time to acquisition 1.5 years 1.5 years Acquisition probability 50% 50% Volatility 37.47% 37.47% Risk free interest rate 3.94% 3.94% Marketability discount 24% 24%
The volatility of the Company prior to acquisition is assumed to be zero, given it is a largely cash based entity. As the potential acquisition company is unknown, the future volatility has been calculated based on the S&P 500 index which has companies of comparable size to the Company's likely acquisition target across a broad range of industries.
Share-based payments (Share Matching Awards)
On 14 February 2011, the four initial Non-Founder Directors of the Company were granted an option to purchase a maximum of 2 shares at an option price of GBP1 for each share obtained on Admission. On 19 April 2011, a newly-appointed Non-Founder Director of the Company was granted an option to purchase a maximum of 2 shares at an option price of GBP1 for each share obtained on Admission. The participation in the placement by the Non-Founder Directors (and the participation thereafter by the newly-appointed Non-Founder Director) was limited to a maximum of 15,000 shares per Non-Founder Director.
In respect of the Non-Founder Directors' Share Matching Awards, the Company has calculated the cost based upon the fair value and taking into account the vesting period and using the Black-Scholes methodology. This is on the basis that a maximum of 150,000 ordinary shares can be subscribed for under the Share Matching Awards and that during the period no subscription was forfeited, expired, exercised or exercisable. The market value of the ordinary shares at the grant date was GBP9.93 with an exercise price of GBP1, and the valuation has been based on the following assumptions: a fair value of options at the grant date of GBP8.95, 1.5 years time to acquisition with a probability of acquisition of 50%, volatility of 37.47% and a risk free interest rate of 3.94%. Based on this, the charge for the period ending 30 June 2011 is GBP1,343,000 (of which GBP149,000 of such Share Matching Awards amount was expensed during the period).
There are no expected forfeitures at grant date. The volatility of the Company prior to acquisition is assumed to be zero, given it is a largely cash based entity. As the potential acquisition company is unknown, the future volatility has been calculated based on the S&P 500 index which has companies of comparable size to the Company's likely acquisition target across a broad range of industries.
11 Cash flows from operations
2011 GBP'000 Operating loss for the period (61,523) Add back: Charge Related to Founder Shares and Founder Securities 41,211 Charge Related to Share Matching Awards 149 Costs associated with Admission 19,003 Other non cash movements 510 Operating cash flows before movements in working capital (650) Decrease in debtors - Increase in creditors 272 Cash flows from operations (378)
12 Related party transactions
On 11 February 2011, the Company, in consideration for each of Berggruen Acquisition Holdings III Ltd. and Marlin Equities VI, LLC advancing the Company GBP100,000, issued an unsecured promissory note for a principal amount of GBP100,000 to each of Berggruen Acquisition Holdings III Ltd. and Marlin Equities VI, LLC. On 11 February 2011, the Company, in consideration for the Pershing Square Entities advancing GBP100,000 in aggregate to the Company, issued an unsecured promissory note for an aggregate principal amount of GBP100,000 to such Pershing Square Entities. The terms of the loans were that there should be no interest accrued on the principal amount and that the loans should be repaid within 60 days following admission. On 25 February 2011 the loans were repaid in full and the terms of the promissory notes were therefore satisfied.
During the period, the Company sold Founder Shares and Founder Securities which are intended to incentivise the Founders to achieve the Company's objectives. The Founder Shares are intended to reward such holders for their initial capital commitment to the Company and for completing the Acquisition, through conversion of the Founder Shares into Ordinary Shares on terms favourable to the Founder Entities following the Acquisition. The Founder Securities are intended to encourage the Founders to grow the Company following the Acquisition and to maximise value for holders of Ordinary Shares by entitling the holders to a share of any increase in the Company's value through the right to convert their Founder Securities into Ordinary Shares at any time within five years following the Acquisition once the Performance Condition has been satisfied. The Performance Condition will be satisfied when either the price per Ordinary Share reaches the specified levels described in note 9 or in the event of a Change of Control. The Company has also issued Share Matching Awards in the period and these are discussed in further detail in note 10.
Prior to Admission, certain costs associated with the marketing, placing and listing of shares were incurred and paid by the Founders and recharged to Justice Holdings Limited at cost. Within the total costs associated with the Admission, amounting to GBP19,003,000, GBP144,000 represented recharges from related parties. All balances had been paid at 30 June 2011.
Berggruen Holdings Inc. performs certain administrative, investment and accounting services on behalf of the Company. The total fees for these services from 17 February 2011 to 30 June 2011 was GBP28,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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