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VCF Value Catalyst

30.00
0.00 (0.00%)
14 Jun 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Value Catalyst LSE:VCF London Ordinary Share KYG9315M1134 ORD USD0.00001 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 30.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Half Yearly Report (8667D)

30/03/2011 7:00am

UK Regulatory


Value Catalyst Fund (LSE:VCF)
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TIDMVCF

RNS Number : 8667D

Value Catalyst Fund Limited (The)

30 March 2011

30 March 2011

The Value Catalyst Fund Limited

Unaudited Interim Report

For the Period from 1st July, 2010 to 31st December, 2010

The Board of The Value Catalyst Fund Limited announces its results for the six months ended 31st December, 2010.

The Company confirms that copies of the interim results for the six months to 30(th) June, 2010 will be available, today, on its website, http://www.valuecatalystfund.com.

Enquiries:

Azhic Basirov / Siobhan Sergeant

Smith & Williamson Corporate Finance Limited

Tel +44 (0)20 7131 4000

Investment Adviser's Report

For the six months ended 31st December 2010

Future of The Value Catalyst Fund - update

On 14th February 2011 the Board of The Value Catalyst Fund Ltd ("VCF" or "the Company") published further details of its proposals for the reorganisation of the Company. Subject to shareholder approval it is intended that the Company's portfolio will be divided into two separate pools of assets - a continuation pool and a realisation pool - according to shareholder elections. The proposals will provide an opportunity for shareholders to continue being invested in the Company, whilst also offering those shareholders desiring an earlier potential exit the ability to realise their investment in accordance with an orderly realisation programme.

The Board was pleased to note that shareholders voted in favour of the continuation for a further five years at the last annual general meeting of the Company but, regardless, wishes to offer shareholders new liquidity options. Historically, VCF's shares have traded at times on a significant discount to NAV and despite the size of the Company, the liquidity in the shares has not been good. As such, the Board would like to see both continuing and realising shareholders offered a structure which reduces any discount to NAV and provides regular realisation opportunities at around NAV level. The Board has therefore formulated proposals which the Directors believe will maximise the options available to shareholders.

In summary these comprise:

-- an invitation to shareholders to remain invested in a company focussed on generating value from investing in undervalued asset based companies including closed-ended and property companies and other discounted situations, with opportunities to realise their investment following the expiry of an initial twelve month period; and

-- an opportunity for shareholders desiring to exit their investment in the Company to rollover their investment into a realisation pool of assets, to be realised over time in accordance with an orderly programme which will seek to return capital to shareholders in stages and as soon as is reasonably practicable

A circular containing proposals outlined above will be posted to shareholders in due course.

The Company performed very well ahead of the credit crisis, but during the credit crisis suffered from being geared and holding large strategic stakes. As an activist fund such positions are part of the investment process and the Company recognised a substantial uplift in value of DouglasBay Capital plc ("DouglasBay"), during the period to 31 December 2010 which resulted in an uplift of 22.95% to the NAV, demonstrating the underlying value in the portfolio. We believe that the full value of DouglasBay is yet to be recognised in the NAV and there is substantial potential in the Company's other major investments. For the six months ended 31st December 2010 VCF returned 27.06%. Even with the credit crisis effects and the conservative valuation of certain positions within the portfolio, the NAV of the Company has increased by 20.44% with distributions re-invested, since inception to the 31(st) December 2010, against a fall of 13.44% in the S&P and a fall of 3.63% in the FTSE (US$) over the same period.

Portfolio Review

TDG was bought by DouglasBay a week before Lehmans collapsed having borrowed heavily to make the purchase. That certainly made for an exciting initial period as few knew quite how the world was going to cope. It has been a very successful investment despite its timing and will realise a gain of approximately 65% over the two years it was held for. That against one of the worst backdrops imaginable. The realisation of TDG and the distribution of the proceeds from DouglasBay will move the Company from a leveraged position to a net cash position and so allow for the start of distributions to shareholders choosing to exit.

Celtic Property Development SA ("Celtic") has progressed well and is waiting on planning for its big development site. Planning has been slower than hoped but we expect it to be finalised in the next three months. That will allow Celtic to push on and start building out the site and create value for the Company. Celtic was listed on the Warsaw Stock Exchange in December and while it did not raise any money it is a precursor to Celtic being able to raise money when it receives the relevant permits on its major development site. Over the next two years we expect Celtic to realise substantial value from its assets.

Ceiba Investments Limited de-listed from the Channel Islands Stock Exchange in December and is re-listing in Canada. It has also completed a major hotel purchase in Cuba and we believe it has substantial value to come over the next year.

Over the period, VCF has continued to build positions in both closed-end funds and property companies and has announced a number of declared positions. The attractiveness of the opportunities in this area does fluctuate and was better at the beginning of 2010 than the end. Over the last couple of months as markets have been weak we have seen better opportunities but it is an area where too much capital will reduce returns.

Alliance Trust PLC ("Alliance")

At GBP2.4bn (market cap as at 31st December 2010), Alliance Trust is Britain's largest investment trust. It is also one of the oldest investment trusts in existence (123 years) with more than 50,000 retail investors. As of 31st December 2010, funds managed by Laxey owned 9,547,403 shares in Alliance, representing 1.44% of the shares in issue, worth approx $56m.

Compared to its peers, Alliance is a poor performer trading at a consistently wide discount (2007: average of 16.30%; 2008: average of 16.00%; 2009: average of 15.40% and 2010: average of 17.10%). However, unlike its peers, Alliance has not sought to address the discount at which its shares trade to NAV. Likened to "a rusty old oil tanker unable to change course without difficulty and possessing only one speed (slow)" (Jeff Prestridge, Daily Mail, 20 February 2011), Alliance has seemingly ignored calls for it to tackle the discount.

In November 2010 Laxey wrote to the board of Alliance to request that it allow shareholders to debate the introduction of a Discount Containment Mechanism ("DCM") designed to limit the discount to NAV where the share price could trade to a maximum of 10% (excluding income and with debt treated at market value) in normal market conditions. A full copy of our letter may be found here: https://www.atstaction.co.uk.

In the same letter, we called into question the Alliance Trust Savings Scheme. This is a scheme that allows the Alliance Trust Savings' nominee shareholder to scale up the votes in the Alliance Trust Savings Enfranchisement Scheme ("SEF") by a huge multiple, including the votes cast by Alliance Trust PLC's management. In effect, it enables Alliance to vote on behalf of its shareholders who hold their shares through its Alliance Trust Savings Scheme. Unless an Alliance shareholder who has not voted specifically opts out of the SEF, Alliance may vote any uncast shares in proportion to the votes cast overall by its scheme. As at the 10th November 2010 the scheme held 21.5% of Alliance shares and was by far and away the largest shareholder. With no disclosure on the actual votes cast within the scheme, shareholders have no idea of the extent of scaling up. We believe that the numbers within the scheme that do vote is minimal, perhaps sub 0.5%. If correct, then at the very least Alliance shareholders should be made aware of the materiality of the scaling up.

Our action has struck a chord with many Alliance (and non-Alliance) shareholders, commentators, other investment trusts and brokers. When Alliance rejected our calls for shareholders to have the right to debate the introduction of a DCM and the operation of the Alliance Savings Scheme, we formally requested that the Alliance board put corresponding resolutions to all shareholders at the forthcoming AGM in May. We have also requested that ahead of the vote Alliance remove itself from the Alliance Trust Savings Enfranchisement Scheme.

After we formally requisitioned Alliance at the end of January, on the 11th February 2011 Alliance conducted a share buy-back and cancellation of 75,000 shares. To put this into context, this is one of only a handful of buy-backs Alliance has ever conducted in its 123 year history. In a note on the same date, Canaccord called this "relatively groundbreaking" and "nice to see (at last!!)".

Any shares in Alliance held by the realisation portion of the Company will either be held until value has been realised or bought by Laxey Partners and will not result in any selling pressure on the trust.

Alternative Investment Trust ("AIT")

The Australian investment trust, AIT, has exposure to a portfolio of leading absolute return funds and a remaining single direct investment. Formerly Everest Babcock & Brown Alternative Investment Trust, following a vote by unit holders at a meeting held on 30th January 2009 AIT was put into wind down with an orderly realisation of its portfolio to be managed by Laxey.

By August 2010 AIT had repaid its outstanding debt (from the peak of AUD289m in January 2009) and post 31st December 2010 had amassed a sizeable cash balance from realisation proceeds and the expiration of a secondary swap within the main Swap that had a sizeable cash balance. These proceeds were paid to unit holders, including VCF, on 18th February 2011.

Post this return of capital, the remainder of AIT's portfolio remains in liquidation or is proceeding according to the original redemption terms (68% of AIT's gross assets at the time of writing), with 30% of assets side pocketed without a stated redemption point (although in liquidation) and the remainder cash (2%). Excluding side pocket assets, Laxey expects a further 22% of AIT's gross assets (gross assets were AUD 179m as at 31st December 2010) to be returned in redemption proceeds over the course of 2011.

Atlantis Japan Growth Fund Limited ("Atlantis Japan")

Atlantis Japan is an investment trust incorporated in Guernsey. The fund aims to achieve long term capital growth through investing in a diversified portfolio of medium/smaller companies in Japan.

In order to tackle the discount and enhance trading liquidity, in October 2010, the Board put forward proposals for a regular redemption facility which will enable shareholders to redeem all or part of their holding, subject to directors' discretion, on a 4 monthly basis. The initial redemptions are at a discount of 4% to FAV (Fair Asset Value), falling to 3% on the third redemption and 2% on the fifth redemption, and expected to remain at 2% thereafter.

The first redemption opportunity was on the 28 February 2011; 23.6% of the share capital including us elected to redeem. We have also bought further shares for further redemptions as we thought the market did not seem to price the value of the reorganization initially. A Redemption Pool has been formed containing the exiting assets. On 18 March 2011, the Board of Atlantis Japan approved an interim payment equivalent to approximately 72.86 pence per share to those who elected for the first redemption, funded by the sale of approximately 85.1% (by market value on 28 February 2011) of the investments held in the Redemption Pool. In addition, 99.4% of the payment reflects sales made before the earthquake hit Northern Japan. The board of Atlantis Japan has decided to suspend further investment sales in the Redemption Pool until market conditions in Japan stabilise.

BB Biotech

BB Biotech invests in biotechnology companies and is one of the world's largest investors in this sector with CHF 1.2 bn in assets under management. The Company is listed in Switzerland, Germany and Italy. Its investments are focused on listed companies that are developing and commercializing novel medical treatments and cures.

Since the credit crisis in the autumn of 2008, the discount between NAV and the share price of BB Biotech had remained at a high level of 26% (average discount during the preceding 12 months).

The company has decided to bring the discount towards a targeted range of 10% to 15% within the next 12 to 18 months. The solution and a steady reduction of the discount will be achieved by reducing the number of shares through a series of share buy backs with the company committed to seeking approval several times a year from Investors to renew its buying capability if required. The board have put forward a very clear policy to reduce the discount to the benefit of all shareholders and we think they have created an impressive approach.

Private Equity Investor plc

Private Equity Investor plc has continued to surprise on the upside and has received good cash flows from realisations from its underlying limited partnership investments. As a private equity fund with no over funding issues it is in a very strong position and has continued to distribute cash to shareholders. On 11th January 2011 a repurchase offer was announced, which equated to 38.25p per share. That distribution was paid on 16th February 2011. We are likely to see further distributions later this year.

LinQ Resources Fund

As mentioned in our last commentary, LinQ Resources Fund carried out a tender for 25% with an additional conditional 10% at a discount of 15%. We exited the whole of our position at the 15% discount having bought at an average discount in excess of 30%. We received the bulk of the money as a return of capital on 7th February 2011 and the balance as a dividend one day later for a total return of over 28%.

Statement of Comprehensive Income (Unaudited)

For the six months ended 31st December 2010

 
                                                          2010           2009 
                                                           US$            US$ 
 Income 
 Dividends on long equity securities and 
  investment funds                                   2,800,018      2,466,261 
 Interest 
 - Cash balances                                       373,104        266,698 
 - Debt securities                                         936        248,282 
 Other income                                          135,882        128,451 
 Net realised losses on financial assets 
  and liabilities at fair value through profit 
  or loss 
 - Equities and funds                              (6,219,061)   (24,382,127) 
 - Derivatives                                     (2,445,105)    (3,130,695) 
 - Forwards                                       (12,005,012)    (6,720,299) 
 Net unrealised gains/(losses) on financial 
  assets and liabilities other than currency 
  forwards at fair value through profit or 
  loss 
 - Equities and funds                               44,134,814     34,589,472 
 - Derivatives                                       (590,770)    (1,743,626) 
 - Other foreign currency gains/(losses)               345,899       (54,412) 
 Net unrealised gain on currency forwards            1,506,266        414,226 
                                                    28,036,971      2,082,231 
 
 Expenses 
 Investment expenses 
 Dividends payable on short equity securities 
  and investment funds                                  11,283         13,685 
 Interest expense 
 - Cash balances                                       265,299        796,360 
 - Derivatives                                         127,478        121,260 
 Total Investment expenses                             404,060        931,305 
 
 Other expenses 
 Investment advisory fees                            1,051,653      1,446,760 
 Audit fees                                             18,000         18,000 
 Administration fees                                    93,166         89,622 
 Directors' fees and expenses                           59,974         63,310 
 Other expenses                                        475,677        687,932 
 Total other expenses                                1,698,470      2,305,624 
 
 Total expenses                                      2,102,530      3,236,929 
 
 Net gain/(loss)                                    25,934,441    (1,154,698) 
 
 Other comprehensive income/(loss)                           -              - 
 
 Total comprehensive income/(loss) for the 
  period                                            25,934,441    (1,154,698) 
 
 Gain/(loss) per ordinary share 
 Basic and fully diluted                               US$0.15      US$(0.01) 
 

Statement of Financial Position

As at 31(st) December 2010

 
                                                          30th 
                                  31st December           June   31st December 
                                           2010           2010            2009 
                                    (Unaudited)      (Audited)     (Unaudited) 
                                            US$            US$             US$ 
 Assets 
 Cash at bank and brokers             2,123,677      3,317,261       1,689,776 
 Cash held as margin at brokers       1,276,254      1,275,886         928,802 
 Investment funds - long at 
  fair value through profit or 
  loss                               62,851,108     36,413,335      30,646,886 
 Investment funds - long swaps 
  at fair value through profit 
  or loss                               175,342          1,910          52,550 
 Investment funds - short swaps 
 at fair value through profit 
 or loss                                      -         34,207               - 
 Equities - long at fair value 
  through profit or loss            109,858,704     95,117,255     112,861,383 
 Equities - warrants at fair 
  value through profit or loss          510,318      2,145,867       2,513,497 
 Equities swaps - long at fair 
  value through profit or loss          631,516        223,835         359,099 
 Equities swaps - short at fair 
  value through profit or loss              716          3,714               - 
 Index swaps - short at fair 
 value through profit or loss                 -         64,629               - 
 Futures - short at fair value 
  through profit or loss                109,107        525,386               - 
 Amounts receivable on currency 
  forwards                               26,167         10,919       2,969,036 
 Amounts due for outstanding 
  sale settlements                      363,635        250,451         129,147 
 Other debtors and accrued 
  income                                494,268      1,315,097         264,391 
 Loan receivable                              -        410,509       2,191,832 
 Total assets                       178,420,812    141,110,261     154,606,399 
 
 Equity 
 Share capital                            1,798          1,798           1,798 
 Share premium                      181,934,679    181,934,679     181,934,679 
 Retained losses                   (60,173,769)   (86,108,210)    (79,969,755) 
 Total shareholders' equity         121,762,708     95,828,267     101,966,722 
 
 Liabilities 
 Overdrawn balances at brokers       48,714,887     36,400,748      46,761,736 
 Equities - short at fair value 
  through profit or loss              3,288,019      2,656,934               - 
 Equity swaps - long at fair 
  value through profit or loss                -              -       4,120,048 
 Equities swaps - short at fair 
  value through profit or loss            9,576          1,984          15,943 
 Investment funds - short at 
  fair value through profit or 
  loss                                  117,100        372,423          27,115 
 Investment funds - long swaps 
  at fair value through profit 
  or loss                               753,837      2,332,775          34,087 
 Investment funds - short swaps 
 at fair value through profit 
 or loss                                  1,221              -               - 
 Index swaps - short at fair 
 value through profit or loss            17,792              -               - 
 Futures - short at fair value 
  through profit or loss                 60,236              -          68,010 
 Amounts payable on currency 
  forwards                            1,687,483      3,178,501           3,489 
 Amounts due for outstanding 
  purchase settlements                  926,735         20,407         181,106 
 Other creditors and accrued 
  expenses                            1,081,218        318,222       1,428,143 
 Total liabilities                   56,658,104     45,281,994      52,639,677 
 
 Total liabilities and equity       178,420,812    141,110,261     154,606,399 
 
 Net asset value per ordinary           US$0.72        US$0.56         US$0.60 
  share 
 

Statement of changes in Shareholders' Equity (Unaudited)

For the six months ended 31st December 2010

 
                             Share         Share       Retained 
                           Capital       Premium         losses          Total 
 
                               US$           US$            US$            US$ 
 
 Balance at 1st July 
  2009                       1,619   171,291,268   (68,171,467)    103,121,420 
 
 Total comprehensive 
 loss for the period: 
 Loss for the period             -             -    (1,154,698)    (1,154,698) 
 Other comprehensive 
 income                          -             -              -              - 
 
 Transaction with owners 
 recorded directly 
 in equity: 
 
 Contributions by and 
 distributions to 
 owners 
 Capitalisation in lieu 
  of dividend                    -             -   (10,643,590)   (10,643,590) 
 Issue of shares               179    10,643,411              -     10,643,590 
 
 Balance at 31st 
  December 2009            1,798     181,934,679   (79,969,755)   101,966,722 
 
 Balance at 1st July 
  2010                     1,798     181,934,679   (86,108,210)   95,828,267 
 
 Total comprehensive 
 loss for the period: 
 Profit for the period     -         -             25,934,441     25,934,441 
 Other comprehensive 
 income                    -         -             -              - 
 
 Transaction with owners 
 recorded directly 
 in equity: 
 
 Contributions by and 
 distributions to 
 owners 
 Capitalisation in lieu 
 of dividend               -         -             -              - 
 Issue of shares           -         -             -              - 
 Redemption of shares      -         -             -              - 
 
 Balance at 31st 
  December 2010            1,798     181,934,679   (60,173,769)   121,762,708 
 

Statement of Cash Flows (Unaudited)

For the six months ended 31st December 2010

 
                                                          2010            2009 
                      Note                                 US$             US$ 
 
 Dividends received                                  3,249,456       2,441,684 
 Interest received                                     745,431         285,124 
 Other income received                                  80,675         128,451 
 Dividends paid on short positions                    (11,522)        (13,685) 
 Advisory fee paid                                   (338,085)       (516,138) 
 Administration fee paid                              (90,206)        (95,529) 
 Other expenses paid                                 (526,552)       (684,855) 
 Interest paid                                       (373,168)       (987,317) 
 Decrease in other receivable                                -         327,198 
 Decrease in loans receivable                          410,509         477,065 
 Decrease/(increase) in cash held 
  as margin                                             54,839       (487,496) 
 Purchase of investments                          (18,075,544)     (5,100,757) 
 Sale of investments                                 1,366,444      66,912,426 
 Net cash inflow from operating activities        (13,507,723)      62,686,171 
 
 
 (Decrease)/increase in cash and cash 
  equivalents                                     (13,507,723)      62,686,171 
 
 Opening cash and cash equivalents                (33,083,487)   (107,758,132) 
 
 Closing cash and cash equivalents                (46,591,210)    (45,071,961) 
 
 Significant non-cash transactions: 
 Capitalisation in lieu of dividend                          -      10,643,590 
 
 

Notes to the financial statements (Unaudited)

For the six months ended 31st December 2010

1. Accounting Policy

The interim financial statements have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting. Accounting policies have been applied on a consistent basis with those adopted for the last full financial year.

Comparative figures

The comparative figures in the Statement of Comprehensive Income, Statement of Changes in Shareholders' Equity and Statement of Cash Flows relate to the corresponding interim period for the preceding financial year, 1(st) July 2009 to 31(st) December 2009.

Estimates

The preparation of financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Management believes that the estimates utilised in preparing its financial statements are reasonable and prudent, however, actual results could differ from those estimates. The most significant estimates and judgements that are required to be made are in respect of the valuation of investments for which no reliable market price is available (see note 3).

2. Cash held as margin at brokers

 
                                   31st December   30th June   31st December 
                                            2010        2010            2009 
                                             US$         US$             US$ 
 
 Cash held as margin at brokers        1,479,185   1,534,024       1,242,809 
 less: Provision for doubtful 
  debts                                (202,931)   (258,138)       (314,007) 
                                       1,276,254   1,275,886         928,802 
 
 

The provision for doubtful debts represents 100% provision against a holding in Kaupthing Singer & Friedlander. An amount of US$55,207 was recovered during the period.

3. Investments

 
                     31st December     30th June   31st December 
                              2010          2010            2009 
                               US$           US$             US$ 
 Long positions: 
 Market value          173,273,150   131,569,428     142,279,281 
 
 Cost                  171,924,435   174,964,222     176,478,954 
 
 Short positions: 
 Market value          (3,384,120)   (2,403,405)       (111,068) 
 
 Proceeds              (3,183,357)   (3,402,106)       (107,334) 
 

All of the Company's investments are designated as financial assets and liabilities held at fair value through profit or loss.

Investments valued by the Investment Advisor using a valuation technique, and having been considered by the Directors, are Celtic Property Development S.A., DouglasBay Capital plc and Balkan Reconstruction Investment Financing SCA.

The Company has a holding in Celtic Property Development S.A. (Celtic) of US$42,174,246, or 23.64% of the Total Assets of the Company as at 31st December 2010 (34.64% of Net Assets). On 23(rd) September 2010 Celtic listed on the Warsaw Stock Exchange. Pre-listing, the shares of Celtic were split on a 1:5 basis. The Directors, with the advice of the Investment Advisor, consider that although Celtic has a stock market quotation, trading is not sufficient to enable the quoted price to be a reliable estimate of fair value. Therefore, the Directors, with the advice of the Investment Advisor, have estimated the fair value based on the proportionate share of the estimated net asset value of Celtic as at 31(st) December 2010. This has resulted in Celtic being carried at PLN27.748 per share at 31(st) December 2010 (30(th) June 2010: EUR35 per share) (PLN29.029 after adjusting for stock split).

The Company has a holding in DouglasBay Capital plc ("DouglasBay") of US$62,666,467, or 35.12% of the Total Assets of the Company as at 31st December 2010 (51.47% of Net Assets). On 29th November 2010 DouglasBay announced the disposal of TDG Limited, its major investment holding, to Norbert Dentressangle SA for an initial consideration of approximately GBP205m, with the precise amount dependent upon the date that closing occurs and the closing adjustments. The European Commission approved the transaction on 21(st) March 2011. When completed, DouglasBay estimates that following the repayment of group debt facilities and transaction costs the company will have cash funds of approximately GBP185m, equivalent to GBP0.143 per DouglasBay share. Post the transaction, DouglasBay will still retain ex-TDG real estate assets worth approximately GBP0.02 per share, giving a total estimated fair value of GBP0.163 per share. As at 31st December 2010, the Directors, with the advice of the Investment Adviser, have resolved to carry the holding in DouglasBay at GBP0.155 per share (30th June 2010: GBP0.10 per share). The difference in carrying price and the estimated fair value of the cash and remaining assets has been set to provide for the fact that the remaining real estate assets may not realise their estimated fair value upon

sale.

The Company has a holding in Balkan Reconstruction Investment Financing S.C.A. (BRIF) of US$5,216,570, or 2.92% of the Total Assets of the Company as at 31st December 2010 (4.28% of Net Assets). BRIF is not quoted and the Directors, with the advice of the Investment Advisor, consider that the last reported net asset value before delisting as at 31st December 2010 is not a reliable estimate of fair value. Instead the investment is being carried at EUR12.77 per share (30th June 2010: EUR12.77 per share), the price at which BRIF issued new shares in December 2008, February 2009 and March 2009. As no more recent information has been made available, the Directors, with the advice of the Investment Advisor, consider this to be the most accurate estimate of fair value as at 31st December 2010.

These three investments, which continue to be measured in the Statement of Financial Position using the above mentioned valuation techniques, comprise a combined total value of US$110,057,283 or 61.68% of the Total Assets of the Company as at 31st December 2010 (90.39% of Net Assets). The net change in fair value for the period recorded in the Statement of Comprehensive Income amounted to a gain of US$26,704,376 (31(st) December 2009: loss of US$334,659).

4. Share capital

 
                    Period ended   Period ended    Period ended   Period ended 
                                           31st                           31st 
                   31st December       December   31st December       December 
                            2010           2010            2009           2009 
                          Number            US$          Number            US$ 
 Authorised 
 Share Capital 
 Founder shares 
  of US$1 each               100            100             100            100 
 Ordinary shares 
 of 
 US$0.00001 each   4,990,000,000         49,900   4,990,000,000         49,900 
                                         50,000                         50,000 
 
 
                    Period ended   Period ended    Period ended   Period ended 
                                           31st                           31st 
                   31st December       December   31st December       December 
                            2010           2010            2009           2009 
                          Number            US$          Number            US$ 
 Issued share 
 capital 
 Founder shares 
  of US$1 each               100            100             100            100 
 
 Ordinary shares of US$0.00001 
 each 
 At 1st July         169,915,650          1,698     152,051,283          1,519 
 Capitalization 
  in lieu of 
  dividend                     -              -      17,864,367            179 
 At 31st 
  December           169,915,650          1,698     169,915,650          1,698 
 
 
 Total issued 
  share capital                           1,798                          1,798 
 

5. Reserves

 
                                                Period ended    Period ended 
                                               31st December   31st December 
                                                        2010            2009 
                                                         US$             US$ 
 Share Premium 
 At 1st July                                     181,934,679     171,291,268 
 Relating to issue of shares                               -      10,643,411 
 At 31st December                                181,934,679     181,934,679 
 
 Retained losses 
 At 1st July                                    (86,108,210)    (68,171,467) 
 Comprehensive income/(loss) for the period       25,934,441     (1,154,698) 
 Dividend                                                  -    (10,643,590) 
 At 31st December                               (60,173,769)    (79,969,755) 
 

6. Dividend

2010 Dividend

No dividend was paid in respect of the year ended 30(th) June 2010.

 
 2009 Dividend                                                    US$ 
 Paid 31(st) December 2009 - Capitalisation in lieu of dividend of 
  US$0.07 
 per ordinary share                                        10,643,590 
 
 

7. Prime brokerage agreements

Under the terms of the prime brokerage agreement which the Company has entered into, the prime broker holds a fixed charge over the Company's assets and cash held with the prime broker as security for the payment and performance by the Company of its obligations to the prime broker.

8. Guarantee

As part of the acquisition of TDG plc by DouglasBay Capital plc in October 2008, the Company and DouglasBay Capital plc executed a four year guarantee of GBP12.2m, a seven year guarantee of GBP15m and an unlimited guarantee of GBP3.3m in favour of TDG Trustees Limited ("TDGTL") (pension trustee for TDG), pursuant to which, the Company and DouglasBay Capital plc agreed to guarantee to TDGTL the punctual performance by TDG of all its guaranteed obligations. The maximum liability is GBP30.5m.

The Company will be released from providing these guarantees upon the completion of the sale of TDG by DouglasBay Capital plc.

9. Copies of interim statements

Copies of the interim statements will be sent to shareholders. Further copies will be available from Quintillion Limited, 24-26 City Quay, Dublin 2, Ireland.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR MMGZFNLRGMZM

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