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Final Results – 31 Dec 2008
 

Final Results – 31 Dec 2008

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    Final Results – 31 Dec 2008 Final Results – 31 Dec 2008 Document Transcript

    • 29 April 2009 Rapid Realisations Fund Limited Final Results Rapid Realisations Fund Limited (the "Company" or "Rapid"), the AIM quoted company which seeks to exploit the investment opportunity represented by companies in “pre-flotation” and other late stage situations, today announces its audited results for the year ended 31 December 2008 (the "Period"). Investment Overview When the Company was listed in August 2007 the Investment Manager, Cenkos Fund Managers Limited ("Cenkos") believed that there were a large number of companies that needed growth capital which was not available from banks or the listed market. The extent of this demand has far exceeded our expectations given the financial crisis which has dramatically reduced the availability of credit and the ability to raise finance in the listed market. Given the difficult financial market, exits for our investments will be more difficult to achieve, but we are responding to this challenge by both strategically positioning our investments to be attractive as trade disposals and by creating companies that have sufficient critical mass to be attractive to the stock market. Financial Highlights • Profit for the year of £3.7 million. • Net Asset Value per share at 31 December 2008 of 104.28p. • Invested circa £30 million during the year in 13 companies. • Cash and cash equivalents as at 31 December 2008 of £28.5 million. Since the Year End • The Net Asset Value per share at 31 March 2009 has decreased to 101.97p predominantly as a result of the fall in Enegi Oil’s share price. • We have invested an additional circa £4 million. • We have committed follow on investments of £9 million. • We are also currently undertaking due diligence on investments with a total investment cost of circa £14 million. Investment Highlights Investments made in 2007; The Darwen Group, a bus company, was listed on AIM in January 2008 at which point the company sold its shareholding realising a profit of approximately 100% of the original investment value. Daily Internet Plc was listed on the Plus Market in January 2008. The company is an SME internet hosting business with a broad suite of products providing customers with a one-stop shop for all of their internet requirements. Enegi Oil Plc ("Enegi") was successfully admitted to AIM in February 2008 raising £15 million of new equity and initially performed well as the group made progress in drilling a horizontal well in Newfoundland, Canada. However, although oil was found the flow rate is currently not sufficient 1
    • to make the well economic. The management of Enegi are currently working on alternative ways to extract value from this valuable reserve. During 2008 we reviewed in excess of 200 companies and made 13 investments; Barburrito Ltd is a Mexican fast-casual food concept. Barburrito Ltd currently operates three outlets; two in Manchester and a third in Liverpool’s new shopping centre, Liverpool One. The strategy is to roll out a chain of Mexican fast food restaurants. Consumer research shows that there is increasing demand for Mexican food which is under-represented in the UK. Concept Building Solutions Ltd ("Concept") offers insurance claim management services and repairs as well as private building repairs within the household sector. The Concept management team has built a national network of franchisees. Consumers phone the Head Office call centre and the lead is allocated to the appropriate franchisee who, if appointed by the client, negotiates directly with the insurance company concerned to agree a schedule of repairs and/or reinstatement. The work is then carried out and the franchisee is paid directly by the insurance company. Concept is focused on increasing the number of franchisees and the range of services offered. The company is looking to announce shortly some exciting new contracts. Deep Blue Restaurants Ltd ("Deep Blue") acquired Harry Ramsden’s “Locals” in August 2005 which consisted of twelve shops. The successful completion of the acquisition transformed Deep Blue into one of the sector’s largest operators. Deep Blue’s growth strategy is based on buying and rebranding existing businesses and small chains from owner/managers to build a chain of branded fish and chip shops. Deep Blue now has 29 shops. DDM Europe AG ("DDM") is a newly formed Swiss based company engaged in the acquisition and collection of distressed consumer debt portfolios from financial institutions. DDM are focused on the Eastern European consumer debt market and has a management team with an excellent track record in this market. Green CO2 Plc specialises in the provision of energy performance certificates and guidance necessary under the government’s Energy Performance of Buildings Directive. Kolar Gold Plc is a new joint venture between financiers and mining experts specifically established to acquire, redevelop and reopen Kolar Gold Fields mine in India which was closed in 2001. The company intends to bid for the mining leases and asset in a joint venture with the Indian workers, in order to extract the 11m oz of gold that remain in the mine. Just Car Clinics Plc ("JCC") is the UK’s second-largest independent chain of collision repair centres, specialising in motor collision repair and accident damage rectification for cars, vans and motorbikes. The group currently carries out collision repairs to around 45,000 vehicles every year as well as providing a wide range of additional services. JCC now has 23 repair centres under its control employing over 620 staff in total and are looking to acquire further sites in a fast- consolidating market worth in the region of £5.4 billion per annum. JCC is an AIM quoted company. Keycom Plc (Keycom”) provides managed communications services (broadband, voice services, Wi-Fi hotspot access) for UK university halls of residents, key worker residences, multi- tenants and MOD residences. Since the investment, Keycom has completed two acquisitions. The group now has 28,000 active broadband rooms in service with contracts already awarded for a further 20,000 rooms. Dynamic IT Management Services Ltd (“Logicscope”) are the leading provider of trade notification software to the foreign exchange and OTC markets. The company’s innovative TradeSTP deal notification software is deployed in most major global FX trading banks and electronic dealing venues. Logicscope are now looking to expand sales and marketing capacity in the UK and across Europe. Providence Resources Plc (“Providence”) is quoted on both AIM and the Irish Enterprise Exchange and is an international, upstream oil and gas production and exploration company currently actively involved in Ireland, UK, Nigeria and the Gulf of Mexico. The company’s portfolio is well diversified geographically and is also well balanced between production, appraisal and exploration assets. Providence is currently involved in 19 license interests world wide; at 12 of 2
    • which they act as operator. The company has invested in unquoted convertible loan notes with a 12% coupon payable six monthly in arrears on a term of four years. Take 2 Film Holdings Ltd hires out camera and grip equipment and provides associated services to production companies making dramas, features, commercials, promotional videos and corporate in-house shorts. The company also sells film stock and consumables. The investment has been used to expand the business starting with the acquisition of Web Lighting (in liquidation), for £300,000, which was rebranded under the Take 2 Lighting brand followed by a purchase of a further £200,000 worth of lighting equipment. The lighting division has enabled the company to compete at all levels with their two main rivals; Panavision and Media Film Services. The company has also been expanding its relatively new South African operation. Taylormade Betting Ltd (“Taylormade”) is a new independent bookmaker chain. Each shop offers air-conditioned, live screening of all UK horse races, live football matches as well as a multitude of special betting offers. The company now has 16 outlets with a strong pipeline of potential additional sites. Taylormade raised additional funds through an Enterprise Investment Scheme (“EIS”) issue at the end of March 2009. WDScott Ltd ("WDScott") is a specialist performance improvement consultancy business with its main operations in the UK and Australia. The company’s management consists of experienced executives within the consulting industry who believe they can use the WDScott brand name to build a world leader in consultancy through both organic growth and targeted acquisitions. In May, WDScott acquired Global Justice Solutions ("GJS") a specialist law, justice, policing and governance development assistance consulting and project management firm. GJS is an excellent business with high margins and a strong order book. Since the end of December 2008 we reviewed in excess of 40 companies and made investments totaling circa £4 million; Information Prophets Ltd ("i-Prophets") is a spin out company from Manchester University with diagnostics software based on artificial intelligence research. It has created a holistic building information management software product. I-Prophets deliver user-centric benefits to all stakeholders by providing the user with the tools to improve their energy performance. Infinity SDC Ltd ("Infinity") is a specialist provider of high availability, dedicated Business Continuity Services. The company’s offering includes infrastructure services (data centres, private high capacity communications systems and incident management centres) and human continuity services (the location, movement and support of critical personnel during an incident). Infinity have built up one of the most extensive knowledge bases of electrical and telecoms infrastructure outside the major utilities. Wyatt Group Plc / Green CO2 Plc. Green CO2 has recently reversed into Wyatt Group Plc, an AIM quoted company providing advice and services in the areas of HR, employee benefits, employment tax, health and safety, childcare vouchers and pension administration. The newly formed group provides a range of regulatory, mandatory and compliance services to the corporate and public sector. The reversal has allowed the group to widen the product offering, improve the overhead recovery, create national sales and marketing coverage and increase the database of contacts and clients creating additional cross selling opportunities. Commenting, Peter Tom, Chairman: "I am extremely pleased with the Company's progress to date with the Net Asset Value per share increasing over the year by 6.2% to 104.28p at 31 December 2008. Net Asset Value per share has increased by 8.1% since the last published Net Asset Value per share at 30 September 2008. We raised the money to invest in companies that needed growth capital. There is extensive demand for this product which has increased because of the credit squeeze and stock market volatility. However we have been relatively defensive in our choice of investments and as the investment manager reported our portfolio includes a chain of betting shops, a network of car collision repair centres, a company that buys and organises the collection of distressed debt and a data storage company." The Board is confident that the Company is delivering on its objectives. 3
    • Enquiries: Steve Charnock Cenkos Fund Managers Limited +44 (0)7770 363 683 Fund Manager scharnock@cenkosfm.com Philip Secrett Grant Thornton UK LLP +44 (0) 20 7383 5100 Nominated Adviser philip.j.secrett@gtuk.com Notes to Editors: Rapid Realisations Fund Limited ("Rapid") is a closed ended investment fund listed on the AIM market of the London Stock Exchange (AIM). The investment objective of the fund is to seek to exploit the investment opportunity represented by companies in "pre-IPO" and other late stage situations with a view to arbitraging differences in public and private company valuations. The fund is managed by Cenkos Fund Managers Limited. 4
    • Balance Sheet As at 31 December 2008 Notes 31 December 2008 31 December 2007 £ £ Non-current assets 2&6 Investment designated as: Fair value through profit or loss 19,086,705 2,890,920 Loans and receivables 15,454,815 180,000 Total investments 34,541,520 3,070,920 Current assets Other receivables 7 600,750 442,968 Cash and cash equivalents 8 28,526,345 55,463,259 29,127,095 55,906,227 Current liabilities Other payables 9 1,264,703 87,144 Net current assets 27,862,392 55,819,083 Total net assets 62,403,912 58,890,003 Equity attributable to equity holders Revenue Reserve 12 4,879,443 1,212,308 Distributable reserve 11 57,664,069 57,677,695 Treasury Shares 10 (139,600) - Total Equity 62,403,912 58,890,003 Net asset value per Ordinary Share 13 1.0428 0.9815 The financial statements were approved at a meeting of the Board of Directors held on 24 April 2009. The accompanying notes form an integral part of the financial statements. 1
    • Income Statement For the year 1 January 2008 to 31 December 2008 1 January 2008 12 July 2007 To To Notes 31 December 2008 31 December 2007 £ £ Income 2 Bank interest 2,180,222 1,526,039 Commission income 193,500 27,160 Loan note interest 700,336 2,783 Dividend income 15,063 - Other investment income 45,706 - Net realised gains on fair value through profit or loss investments 6 208,274 - Movement in net unrealised gain on fair value through profit or loss investments 6 203,657 54,872 Movement in net unrealised foreign exchange 1,693,730 - gains on loans investments 6 - Foreign exchange gains 740,022 - Total income 5,980,510 1,610,854 Expenses Investment management fee 3 814,340 239,099 Performance fee 3 923,999 - Administration fee 3 92,858 36,571 Custodian fee 3 18,572 7,314 Transaction expenses 181,379 18,261 Directors’ fees and expenses 4 115,851 55,675 Auditor’s remuneration 24,577 16,500 Legal and professional fees 121,422 14,759 Withholding tax on dividend income 1,506 - Bank interest paid 867 - Other expenses 18,004 10,367 Total expenses 2,313,375 398,546 Profit for the year/period 12 3,667,135 1,212,308 Earnings per Ordinary Share 5 0.061 0.020 The results from the current year and prior period are derived from continuing operations. 2
    • Statement of Changes in Equity For the year 1 January 2008 to 31 December 2008 1 January 2008 12 July 2007 To To Notes 31 December 2008 31 December 2007 £ £ Balance brought forward 58,890,003 - Issue of Ordinary Shares 10 - 60,000,000 Issue costs on issuance of Ordinary Shares 2h (13,626) (2,322,305) Repurchase of Ordinary Shares - held as Treasury Shares 10 (139,600) - Transfer in from /(out to) distributable reserve 10 13,626 (57,677,695) 58,750,403 - Transfer (out from)/in to distributable reserve 11 (13,626) 57,677,695 Profit for the year/period 3,667,135 1,212,308 Balance carried forward 62,403,912 58,890,003 1
    • Statement of Cash Flows For the year 1 January 2008 to 31 December 2008 1 January 2008 12 July 2007 To To Notes 31 December 2008 31 December 2007 £ £ Operating activities Commission received 193,500 27,160 Loan note interest received 197,100 - Dividend income received 15,063 - Other investment income 276,392 - Operating expenses paid (1,366,404) (323,738) Amounts paid for purchases of investments (29,772,772) (3,016,048) Amounts received from sales of investments 408,274 - Cash flows used in operating activities (30,048,847) (3,312,626) Financing activities Bank interest received 2,526,004 1,098,190 Bank interest paid (867) - Ordinary Shares issued - 60,000,000 Issue costs on issuance of Ordinary Shares (13,626) (2,322,305) Repurchase of Ordinary Shares - held as Treasury Shares (139,600) - Cash flows from financing activities 2,371,911 58,775,885 Net (decrease)/increase in cash and cash equivalents (27,676,936) 55,463,259 Cash and cash equivalents, start of year/period 55,463,259 - Effect of foreign exchange rate movements 740,022 - Cash and cash equivalents, end of year/period 8 28,526,345 55,463,259 Cash and cash equivalents comprise the following balance sheet amounts: Bank deposits 28,526,345 55,463,259 28,526,345 55,463,259 1. The Company: The Company is a closed-ended investment company and was registered with limited liability in Guernsey on 12 July 2007. The Company commenced business on 2 August 2007 when the Ordinary Shares of the Company were admitted to trading on AIM. The Company seeks to exploit the investment opportunity represented by companies in "pre-IPO" and other late stage situations with a view to arbitraging differences in public and private company valuations. Cenkos Fund Managers Limited (the “Investment Manager”) believes that a large number of private companies can be successfully prepared for IPO or trade sale by investing time, financial expertise and money. In addition the Investment Manager believes that current volatility in the stock market (especially AIM) and the stricter controls being imposed on AIM applicants will reduce market appetite for smaller IPOs in the short term. To the extent that this causes companies to delay seeking a flotation, it increases the number of opportunities for the Company to offer substantial pre- IPO investment. It is the Company's policy to invest in companies that are profitable or close to profitability. These companies will also typically have one or more of the following attributes: 1
    •  a requirement to increase the scale of its operations;  a need to replace a retiring owner-manager, or early stage investors;  a need to change strategy and invest to make it an attractive floatation or trade sale prospect;  a need to make a strategic acquisition or some other transformation to make it an attractive floatation or trade sale prospect; and/or  a decision to delay floatation because of small cap stock market volatility. Typically, the funds invested will be used to buy investee companies to meet working capital requirements and to finance capital expenditure in order to make possible the expansion of the businesses either by acquisition or through organic growth. Each business in which the Company invests will, in the opinion of the Investment Manager, be capable of achieving a realisation either through a sale or by listing of its shares on a stock exchange within 6 to 36 months of an investment by the Company. 2. Principal Accounting Policies: The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company’s financial statements: (a) Basis of Preparation: (i) General The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The financial statements of the Company have been prepared under the historical cost convention modified by the revaluation of assets at fair value through profit or loss, and in accordance with IFRS and comply with The Companies (Guernsey) Law, 2008. (ii) Judgements and estimates The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results could differ from such estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate was revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The most critical judgements, apart from those involving estimates, that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements are the functional currency of the Company (see note 2(d)(i)) and the fair value of investments designated to be at fair value through profit or loss (see note 2(f)(i)). The valuation methods/techniques used by the Company in valuing financial instruments involve critical judgements to be made and therefore the actual value of financial instruments could differ significantly from the value disclosed in these financial statements. (iii) IFRS The following International Accounting Standard, which has been applied, was in issue and became effective during the year: • IFRS 7 Financial Instruments: Disclosures, and the related amendments to IAS 1 on capital disclosures. At the date of authorisation of these financial statements, the following standards and interpretations, which are applicable to the Company’s operation but have not been applied in these financial statements, were in issue but not yet effective: • IFRS 2 Share Based Payments – Amendment relating to vesting conditions and cancellations (Effective date - 1 January 2009); 2
    • • IFRS 3 Business Combinations - Comprehensive revision on applying the acquisition method (Effective date - 1 July 2009); • IFRS 8 Operating Segments (Effective date - 1 January 2009); • IAS 32 and IAS 1 Amendment “Puttable financial instruments and obligations arising on liquidation“ mainly leads to changes in IAS 32: “Financial Instruments: Disclosures” which contains the key regulations separating equity from borrowed capital. The revised version of the Standard allows the classification of redeemable instruments under certain conditions as equity. Mandatory application of the new regulations will first apply to financial years beginning on or after 1 January 2009; • IAS 23 Borrowing costs - Comprehensive revision to prohibit immediate expensing (Effective date - 1 January 2009); and • IAS 27, IAS 28 and IAS 31- Consequential amendments arising from amendments to IFRS 3 (Effective date - 1 January 2009). In the Director’s opinion the adoption of the above standards will have no material impact on the Company’s financial statements. (b) Income: Bank interest income is classified as finance income in the Income Statement and is recognised on an accruals basis at the gross amount receivable. Other investment income, commission income, dividend income and loan interest income are included in the financial statements on an accruals basis. (c) Foreign Currency: (i) Functional and Presentation Currency The Company’s investors are mainly from the UK, with the subscriptions and redemptions of the Ordinary Shares denominated in sterling. The primary activity of the Company is to offer UK investors with an attractive return on their investment, primarily through investing in companies which are likely to achieve an IPO or a sale within a short term time horizon and through a small number of investment companies that are already listed. The performance of the Company is measured and reported to investors in sterling. The Directors consider sterling as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in sterling, which is the Company’s functional and presentation currency. (ii) Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement. Translation differences on non-monetary financial assets and liabilities such as equities at fair value through profit or loss are recognised in the Income Statement. (d) Financial Instruments: Financial assets and financial liabilities are recognised in the Balance Sheet when the Company becomes a party in the contractual provisions of the instrument. (i) Financial Assets The classification of financial assets at initial recognition depends on the purpose for which the financial asset was acquired and its characteristics. All financial assets are initially recognised at fair value. All purchases of financial assets are recorded at trade date, being the date on which the Company became party to the contractual requirement of the financial asset. The Company’s financial assets are categorised as financial assets at fair value through profit or loss. Unless otherwise indicated the carrying amounts of the Company’s financial assets approximate to their fair values. Gains and losses arising from changes in the fair value of financial assets classified as fair value through profit or loss are recognised in the Income Statement. A financial asset (in whole or in part) is derecognised either: • when the Company has transferred substantially all the risk and rewards of ownership; • when it has not retained substantially all the risk and rewards and when it no longer has control over the asset or a portion of the asset; or 3
    • • when the contractual right to receive cash flow has expired. (ii) Financial Liabilities The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued and its characteristics. All financial liabilities are initially recognised at fair value net of transaction costs incurred. All purchases of financial liabilities are recorded on trade date, being the date on which the Company becomes party to the contractual requirements of the financial liability. Unless otherwise indicated the carrying amounts of the Company’s financial liabilities approximate to their fair values. Financial liabilities measured at amortised cost include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method. A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the Income Statement. (e) Investments: The Company’s investments comprise of loans, equities, warrants and convertible loan notes. (i) Classification Equities have been designated as fair value through profit or loss in accordance with IAS 39 (Revised) “Financial Instruments: Recognition and Measurement”. Warrant investments meet the definition of “Derivatives” under IAS39 and have been designated as held for trading in accordance with IAS 39 (Revised) “Financial Instruments: Recognition and Measurement”. They are accounted for as fair value through profit or loss. Investments in convertible loan notes have been designated as loans and receivables in accordance with IAS 39 (Revised) “Financial Instruments: Recognition and Measurement”. (ii) Measurement Equities and warrants are initially recognised at fair value. Transaction costs are expensed in the Income Statement. Subsequent to initial recognition, equities and warrants are measured at fair value. Realised gains and losses on disposal of investments, where the disposal proceeds are higher/lower than the book cost of the investment are presented in the Income Statement in the period in which they arise. Unrealised gains and losses arising on the fair value of investments are presented in the Income Statement in the period in which they arise. Dividend income, if any, from equity investments is recognised in the Income Statement within dividend income when the Company’s right to receive payments is established. Convertible loan notes are initially recognised at fair value less any directly attributable transaction cost. Subsequent to initial recognition, loans are measured at amortised cost using the effective interest rate method. (iii) Fair Value Estimation Quoted investments at fair value through profit or loss are valued at the bid price on the relevant stock exchange, discounted, where necessary, to reflect any lack of liquidity or restrictions on resale. Unquoted investments are valued in accordance with the International Private Equity and Venture Capital valuation guidelines. Typically investments in unquoted companies are made by way of a package of instruments, for example a convertible loan note or outright purchase of shares which also has an attached equity interest in the form of a warrant or option of shares. In these circumstances the Directors are of the opinion that it is not possible to attribute a fair value to each of the separate components of the total investment in that company and therefore the Directors fair value the investment package as a whole. Warrant values are calculated using the International Private Equity and Venture Capital valuation guidelines. 4
    • Loans are valued at amortised cost and reviewed for impairment in accordance with IAS39 (see note 2(g)). (iv) Recognition/derecognition All regular way purchases and sales of investments are recognised on trade date - the date on which the Company commits to purchase or sell the investment. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership. (f) Impairment of Financial Assets: Financial assets are assessed at each reporting date to determine whether there is any objective evidence that they are impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impaired loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses, if any, are recognised in the Income Statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. The reversal is recognised in the Income Statement. (g) Placing Expenses: Expenses incurred in the Placing of the Company charged to the Statement of Changes in Equity during the year amounted to £13,626 (12 July 2007 to 31 December 2007: £2,322,305). (h) Expenses: Expenses are accounted for on an accruals basis. (i) Cash and Cash Equivalents: Cash and cash equivalents are defined as cash in hand, demand deposits and highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash in hand and deposits in bank. (j) Segmental Reporting: The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. (k) Treasury Shares: Where the Company purchases its own Ordinary Share capital, the consideration paid, including any directly attributable incremental costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs, is included in equity attributable to the Company’s equity holders. 3. Related Parties & Material Agreements: The Company is responsible for the continuing fees of the Investment Manager, Administrator, Registrar and the Custodian in accordance with the Investment Management, Administration, Registrar and Custodian Agreements. Investment Management Agreement Pursuant to the provisions of the Investment Management Agreement, the Investment Manager is entitled to receive an advisory fee during the period at 1.0% per annum of the net asset value (“NAV”) of the Company, increasing to 2.0% per annum when 50% of the net proceeds of the Placing have been invested (this threshold was reached on 23 September 2008). This fee is paid quarterly in advance based on the prior quarter end NAV, with a top up payment payable in arrears once the current quarter end NAV is finalised. As at 31 December 2008 the management fee creditor was £43,819 (31 December 2007: £nil). 5
    • The Investment Manager is also entitled to a performance fee for a relevant accounting period when the following two tests are met:  If the adjusted closing NAV per Ordinary Share (where the adjusted NAV is the NAV of the Company excluding any liability for accrued management and performance fees and after adding back any dividends declared or paid during the performance period) exceeds the opening NAV per Ordinary Share by a hurdle rate equivalent to 7.5% per annum (the “Hurdle NAV per Ordinary Share”); and  If the adjusted closing NAV per Ordinary Share is higher than the highest previously recorded opening NAV per Ordinary Share as reduced by the sum of all dividends and distributions per Ordinary Share (including distributions of capital) since the date such highest opening NAV per Ordinary Share was established (the “High Watermark”). Once entitled to a performance fee for a relevant accounting period the fee is payable, in arrears, by reference to the amount the adjusted closing NAV per Ordinary Share exceeds either (i) the opening NAV per Ordinary Share, (where the adjusted NAV is the NAV of the Company excluding any liability for accrued performance fees and after adding back any dividends declared or paid during the performance period), or (ii) where the High Watermark exceeds the Hurdle NAV per Ordinary Share for the relevant accounting period. The performance fee is calculated by taking an amount equal to 20% of the NAV increase per Ordinary Share in that relevant accounting period, multiplied by the time weighted average of the total number of Ordinary Shares in issue for the relevant accounting period. The first performance period began on Admission and ended on 31 December 2007. Each subsequent performance period is a period of one financial year. As at 31 December 2008 the performance fee creditor was £923,999 (31 December 2007: £nil). The Investment Manager has agreed to defer the payment of 25% of the performance fee due as at 31 December 2008 for one year. The payment of the deferred 25% of the performance fee to the Investment Manager is conditional upon the NAV of the Company being higher as at 31 December 2009 than the NAV of the Company as at 31 December 2008. Administration Agreement Pursuant to the provisions of the Administration Agreement, Praxis Fund Services Limited is entitled to receive an administration fee during the period of 0.15% per annum of the net asset value of the Company, subject to an annual minimum of £60,000 applied on a quarterly basis, calculated and paid quarterly in arrears. As at 31 December 2008 the administration fee creditor was £23,958 (31 December 2007: £17,364). Registrar Agreement Pursuant to the provisions of the Registrar Agreement, Capita Registrars (Guernsey) Limited is entitled to a fee of £5,000 per annum together with a per deal fee per shareholder transaction. As at 31 December 2008 the registrar fee creditor was £nil (31 December 2007: £1,619). Custodian Agreement Pursuant to the provisions of the Custodian Agreement, Cenkos Channel Islands Limited is entitled to receive custodian fee during the period of 0.03% per annum of the net asset value of the Company, subject to an annual minimum of £15,000 applied on a quarterly basis. As at 31 December 2008 the custodian fee creditor was £4,792 (31 December 2007: £4,257). Susie Farnon, a Director of the Company is also a non-executive director of the Custodian. Directors’ Interest The interests of the Directors, who held office during the year, and their families are set out below: 31 December 2008 & 31 December 2007 Ordinary Shares Peter Tom 50,000 Robert Holt 50,000 Susie Farnon *100,000 * 50,000 of which are held by the executors of an estate of which Susie Farnon is one of several 6
    • ultimate beneficiaries. Susie Farnon is also an executor of the estate. There were no changes in the interests of the Directors prior to the date of this report. No Director, other than those listed above, and no connected person of any Director has any interest, the existence of which is known to, or could with reasonable diligence be ascertained by that Director, whether or not held through another party, in the share capital of the Company. 4. Directors’ Fees: Each of the Directors has entered into an agreement with the Company providing for them to act as a non-executive director of the Company. Their annual fees, pro-rate for periods less than one year, excluding all reasonable expenses incurred in the course of their duties which will be reimbursed by the Company are as follows: 31 December 2008 31 December 2007 Annual Fee Annual Fee £ £ Peter Tom 50,000 50,000 Robert Holt 25,000 25,000 Susie Farnon 25,000 25,000 5. Earnings per Ordinary Share: Earnings per Ordinary Share for the year ended 31 December 2008 was 6.1p (period ended 31 December 2007: 2.0p). Earnings per Ordinary Share is based on profit for the year of £3,667,135 (12 July 2007 to 31 December 2007: £1,212,308) and on a weighted average of 59,908,151 (31 December 2007: 60,000,000) Ordinary Shares in issue. 7
    • 6. Investments: 1 January 2008 12 July 2007 To To Fair Value Through Profit or Loss 31 December 2008 31 December 2007 Investments: £ £ Investments listed on recognised investment exchanges 6,045,522 - Unlisted investments 13,041,183 2,890,920 19,086,705 2,890,920 Book cost brought forward 2,836,048 - Purchases 16,012,128 2,836,048 Conversion of loan stock to equity 180,000 - Sales (408,274) - Net realised gain on fair value through profit or loss investments 208,274 - Book cost carried forward 18,828,176 2,836,048 Net unrealised gains on fair value through profit or loss investments brought forward 54,872 - Movement in net unrealised gains on fair value through profit or loss investments 203,657 54,872 Net unrealised gains on fair value through profit or loss investments carried forward 258,529 54,872 Fair value carried forward 19,086,705 2,890,920 1 January 2008 12 July 2007 To To Loans and Receivables: 31 December 2008 31 December 2007 £ £ Loans 15,454,815 180,000 Book cost brought forward 180,000 - Purchases 13,761,085 180,000 Conversion of loan stock to equity (180,000) - Book cost carried forward 13,761,085 180,000 Movement in net unrealised foreign exchange gains on loans investments 1,693,730 - Movement in net unrealised foreign exchange gains on loans investments carried forward 1,693,730 - Fair value carried forward 15,454,815 180,000 1
    • 6. Investments: 1 January 2008 12 July 2007 To To Total Investments: 31 December 2008 31 December 2007 £ £ Investments listed on recognised investment exchanges* 6,045,522 - Unlisted investments 13,041,183 2,890,920 Loans 15,454,815 180,000 34,541,520 3,070,920 Book cost brought forward 3,016,048 - Purchases of investment 29,773,213 3,016,048 Sales of investments (408,274) - Net realised gain on fair value through profit or loss investments 208,274 - Book cost carried forward 32,589,261 3,016,048 Net unrealised gains on investments brought forward 54,872 - Movement in net unrealised gains on fair value through profit or loss investments 203,657 54,872 Movement in net unrealised foreign exchange gains on loans investments 1,693,730 - Net unrealised gains on fair value through profit or loss investments carried forward 1,952,259 54,872 Fair value carried forward 34,541,520 3,070,920 *representing 9.69% (31 December 2007: nil%) of Total Net Assets One company, which the Company held an investment in as at 31 December 2008, has the ability to call an extra EUR5.5m of loans from the Company by way of follow-on investment. All warrant investments, classified as “Held for Trading Investments”, are held at nil cost in accordance with International Private Equity and Venture Capital valuation guidelines. 7. Other Receivables: 31 December 2008 31 December 2007 £ £ Bank interest receivable 82,067 427,849 Loan note interest receivable 506,019 2,783 Prepayments 12,664 12,336 600,750 442,968 The Directors consider that the carrying amount of other receivables approximates fair value. 8. Cash and Cash Equivalents: 31 December 2008 31 December 2007 £ £ Cash at bank 28,526,345 55,463,259 Of the cash and cash equivalents £4,386,118 is held with Goldman Sachs money markets equivalents. 1
    • 9. Other Payables: 31 December 2008 31 December 2007 £ £ Management fee 43,819 - Performance fee 923,999 - Fees received in advance 230,686 - Administration fee 23,958 17,364 Custodian fee 4,792 4,257 Brokers fees and commissions - 17,661 Due to broker 441 - Legal and professional - 12,119 NOMAD fee 6,250 - Audit fee 24,000 16,500 Directors’ fees - 11,753 Registrar’s fee - 1,619 Other payables 6,758 5,871 1,264,703 87,144 The Directors consider that the carrying amount of other payables approximates fair value. 10. Share Capital: 31 December 2008 & 31 December 2007 Authorised Share Capital £ Unlimited Shares of no par value that may be issued as Ordinary Shares - - 31 December 2008 31 December 2007 Allotted, issued and fully paid £ £ 60,000,000 Ordinary Shares - 60,000,000 Issue costs on issuance of Ordinary Shares (13,626) (2,322,305) Transfer from/(to) distributable reserve 13,626 (57,677,695) - - On 18 July 2007 the holders of the Subscriber Shares, Praxis Nominees Limited and Praxis Fund Services Limited, passed a written resolution approving the cancellation of the entire amount which stood to the credit of the share premium account immediately after the Placing, conditionally upon the issue of the Ordinary Shares and the payment in full thereof and with respect to any further issue of Ordinary Shares. The cancellation was confirmed by the Royal Court on 23 November 2007. By a resolution dated 18 July 2007 the holders of the Subscriber Shares in the Company granted the Company the authority to make market purchases of up to 14.99% of its own issued Ordinary Shares following the conclusion of the Placing. This authority will expire at the earlier of the date 18 months following the passing of such resolution and the conclusion of the first annual general meeting of the Company. A renewal of the authority to make purchases of Ordinary Shares will be sought from Shareholders at each annual general meeting of the Company. As at 31 December 2008 the Company held 155,000 (31 December 2007: nil) of its own Ordinary Shares in treasury with 59,845,000 Ordinary Shares remaining in the market (31 December 2007: 60,000,000). 31 December 2008 31 December 2007 Treasury Shares £ £ 155,000 Treasury Shares 139,600 - 139,600 - 2
    • 11. Distributable reserve: 1 January 2008 12 July 2007 To To 31 December 2008 31 December 2007 £ £ Distributable reserve brought forward 57,677,695 - Transfer (from)/to distributable reserve during the year/period (13,626) 57,677,695 Distributable reserve carried forward 57,664,069 57,677,695 12. Revenue reserve: 1 January 2008 12 July 2007 To To 31 December 2008 31 December 2007 £ £ Retained revenue reserve brought forward 1,212,308 - Profit for the year/period 3,667,135 1,212,308 Retained revenue reserve carried forward 4,879,443 1,212,308 13. Net Asset Value per Ordinary Share: The net asset value per Ordinary Share as at 31 December 2008 is 104.28p (31 December 2007: 98.15p). The net asset value per Ordinary Share is based on the net assets attributable to equity ordinary shareholders of £62,403,912 (31 December 2007: £58,890,003) and on the year/period end number of Ordinary Shares in issue of 59,845,000 (31 December 2007: 60,000,000). 14. Financial Instruments: (a) Significant accounting policies: Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of its financial assets, including convertible loan notes, and financial liabilities are disclosed in note 2 to these financial statements. (b) Categories of financial instruments: Financial instruments comprise equities, warrants, convertible loan notes and cash and cash equivalents. The warrants are derivative instruments and have been classified as held for trading and are accounted for as fair value through profit or loss. All other financial instruments have been classified as fair value through profit or loss. As at 31 December 2008, the fair value of the Company’s financial assets was £34,541,520 (31 December 2007: £3,070,920). This was 55.35% (31 December 2007: 5.21%) of net assets attributable to equity shareholders. Percentage of net assets attributable to holders of At 31 December 2008: Fair Value Ordinary Shares Assets £ % Financial assets at fair value through profit or loss: Listed equity securities 6,045,522 9.69 Unlisted equity securities 13,041,183 20.90 19,086,705 30.59 Loans and receivables*: Loans 15,454,815 24.77 Cash and cash equivalents 28,526,345 45.71 63,067,865 101.06 1
    • Percentage of net assets attributable to holders of At 31 December 2007: Fair Value Ordinary Shares Assets £ % Financial assets at fair value through profit or loss: Unlisted equity securities 2,890,920 4.91 Loans and receivables*: Loans 180,000 0.30 Cash and cash equivalents 55,463,259 94.18 58,534,179 99.39 * Amortised cost is not considered to be materially different from fair value There are no financial liabilities. (c) Net gains and losses on financial assets: Movement in net Net realised gains Year ended 31 December 2008: unrealised gains on disposals £ £ Financial assets at fair value through profit or loss: Listed equity securities (2,361,740) 208,274 Unlisted equity securities 2,565,397 - 203,657 Loans and receivables: Loans 1,693,730 - 1,897,387 208,274 Movement in net Net realised gains Period ended 31 December 2007 unrealised gains on disposals £ £ Financial assets at fair value through profit or loss: Unlisted equity securities 54,872 - Loans and receivables: Loans - - 54,872 - (d) Derivatives: In accordance with the Company’s scheme particulars the Company may invest in derivatives or forward foreign exchange contracts for the purpose of efficient portfolio management. No such forward foreign exchange contracts were held during the year ended 31 December 2008 (31 December 2007: £nil). The following table details the Company’s investments in warrant derivative contracts, by maturity, outstanding as at 31 December 2008 (31 December 2007: no derivatives held). Warrants 31 December 2008 31 December 2007 Maturity No. Held Fair Value No. Held Fair Value £ < 1 year 1 - - - 1-2 years 2 - 1 - Total 3 - 1 - A warrant is a derivative financial instrument which gives the right, but not the obligation to buy a specific amount of a given stock, at a specified price (strike price) on a specific date. The fair value of the warrants are classified as financial assets at fair value through profit or loss, as disclosed in note (b) above. The warrants for underlying unlisted equities are valued in accordance with the International Private Equity and Venture Capital valuation guidelines. 1
    • 15. Financial Risk Management: Strategy in Using Financial Instruments: The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The Company will seek to exploit the investment opportunity represented by companies in "pre-IPO" and other late stage situations with a view to arbitraging differences in public and private company valuations. The Investment Manager believes that a large number of private companies can be successfully prepared for IPO or trade sale by investing time, financial expertise and money. In addition the Investment Manager believes that current volatility in the stock market (especially AIM) and the stricter controls being imposed on AIM applicants will reduce market appetite for smaller IPOs in the short term. To the extent that this causes companies to delay seeking a flotation, it increases the number of opportunities for the Company to offer substantial pre-IPO investment. Market Price Risk Market price risk results mainly from the uncertainty about future prices of financial instruments held. It represents the potential loss the Company may suffer through holding market positions in the face of price movements and changes in interest rates or foreign exchange rates, with the maximum risk resulting from financial instruments being determined by the fair value of the financial instruments. All securities investments present a risk of loss of capital. The Investment Adviser moderates this risk through a careful selection of securities and other financial instruments within specified limits. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Company’s portfolio and investment strategy is reviewed continuously by the Investment Adviser and the Investment Manager and on a quarterly basis by the Board. The Company’s exposure to market price risk arises from uncertainties about future prices of its investments. This risk is managed through diversification of the investment portfolio. It is the Company’s intention to build a portfolio of investments which is diversified by both sector and stage of development. Generally the Company will seek not to invest (or commit to invest) more than 15% of the Company’s net assets in any single investment at the time of investment (or commitment), or more than 15% of the Company’s net assets in special situations (such as investments in companies already listed) at the time of investment (or commitment), although such limit may be increased to 30% in certain cases where the Board deems appropriate on the advice of the Investment Manager. At 31 December 2008, the Company’s market risk is affected by three main components: changes in actual market prices, interest rate and foreign currency movements. Interest rate and foreign currency movements are shown below. A 25% increase in the value of investments, with all other variables held constant, would bring about a 13.84% (31 December 2007: 1.30%) increase in net assets attributable to equity shareholders. If the value of investments had been 25% lower, with all other variables held constant, net assets attributable to equity shareholders would have fallen by 13.84% (31 December 2007: 1.30%). Whilst these sensitivity percentages show the Company’s overall sensitivity to price movements, it does not reflect the leveraged nature of the derivative financial instruments held by the Company. Warrants by their nature will be disproportionately sensitive to changes in the value of the underlying equity instrument and therefore a 25% increase / decrease in the value of the equity instrument could result in a significantly greater than 25% increase / decrease in the value of the respective derivative instrument. Interest Rate Risk: The Company is exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial instruments and future cash flows. The Company is exposed to interest rate risk as it’s cash and cash equivalents are invested at short term rates. The Investment Manager manages the Company’s exposure to interest rate risk daily in accordance with the Company’s investment objectives and policies. The Company’s overall exposure to interest rate risk is monitored on a quarterly basis by the Board of Directors. 2
    • The table below summarises the Company’s exposure to interest rate risks. At 31 December 2008 31 December 2007 Weighted average Weighted average effective interest effective interest rate Total rate Total £ £ Assets Fixed interest rate 15,454,81 unquoted debt securities 11.78% 5 10.00% 180,000 Cash at bank 3.07% 28,526,34 6.29% 5 55,463,259 Non-interest bearing - 19,687,45 - 3,333,888 5 Total assets 63,668,61 58,977,147 5 Liabilities Non-interest bearing - 1,264,703 - 87,144 Total liabilities 1,264,703 87,144 The sensitivity analyses below have been determined based on the Company’s exposure to interest rates for interest bearing assets and liabilities (included in the interest rate exposure table above) at the Balance Sheet date and the stipulated change taking place at the beginning of the financial period and held constant through the reporting period in the case of instruments that have floating rates. A 200 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates. If interest rates had been 200 basis points higher and all other variables were held constant, the Company’s increase in net assets attributable to equity holders for the period ended 31 December 2008 would have been an increase of £570,527 (31 December 2007: £458,904) due to the increase in the interest earned on the Company’s cash balances. If interest rates had been 200 basis points lower and all other variables were held constant, the Company’s increase in net assets attributable to equity holders for the period ended 31 December 2008 would have been a decrease of £570,527 (31 December 2007: £458,904) due to the decrease in the interest earned on the Company’s cash balances. The Company’s sensitivity to interest rates has decreased during the current year/period as the Company has invested its capital into its investments thereby reducing its cash balances that are interest bearing. Foreign Currency Risk: Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s assets may be invested in securities and other investments that are denominated in currencies different to the reporting currency. Accordingly, the value of an investment may be affected favourably or unfavourably by fluctuations in exchange rates. The Company may through forward foreign exchange contracts hedge its exposure back to sterling but has not done so during the financial year/period. Currency Exposure: A proportion of the net assets of the Company are denominated in currencies other than sterling. The carrying amounts of these assets and liabilities are as follows: Assets Liabilities 31 December 2008 31 December 2008 £ £ Australia Dollar 1,201,519 - British Pound 43,037,249 1,078,271 Euro 19,429,847 186,432 1
    • Equity attributable to Ordinary Shareholders 63,668,615 1,264,703 2
    • Assets Liabilities 31 December 2007 31 December 2007 £ £ British Pound 56,203,444 81,602 US Dollars 2,773,703 5,542 Equity attributable to Ordinary Shareholders 58,977,147 87,144 The Company is exposed to Australian Dollar and Euro (31 December 2007: US Dollar). The sensitivity analysis below has been determined based on the sensitivity of the Company’s outstanding foreign currency denominated financial assets and liabilities to a 20% increase / decrease in the Sterling against Australian Dollar, Euro and US Dollar, translated at the balance sheet date. The following details the Company’s sensitivity to a 20% increase / decrease in foreign currency rates. 20% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. As at 31 December 2008 if Sterling had weakened by 20% against the Australian Dollar and Euro (31 December 2007 if Sterling had weakened by 20% against the US Dollar), with all other variables held constant, the increase in net assets attributable to Ordinary Shares would have been 6.61% (31 December 2007: 0.94%) lower. Conversely, if Sterling had strengthened by 20% against the Australian Dollar and Euro (31 December 2007 if Sterling had weakened by 20% against the US Dollar), with all other variables held constant, the increase in net assets attributable to Ordinary Shares would have been 6.61% (31 December 2007: 0.94% higher). Credit and Liquidity Risk: Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Company. Liquidity risk is the risk that the Company will encounter in realising assets or otherwise raising funds to meet financial commitments. It is the aim of the Company to invest in companies which are likely to achieve a listing or realisation within six to thirty-six months. Maturity Analysis: The table below shows the maturity analysis of the Company’s assets and liabilities as at 31 December 2008: At 31 December Less than 1 1-12 1-3 years 3-5 years No fixed Total 2008 month months maturity £ £ £ £ £ Assets Fixed interest rate unquoted debt securities* - 755,000 9,857,962 4,841,853 - 15,454,815 Cash at bank 14,278,560 14,247,785 - - - 28,526,345 Non-interest bearing 352,855 235,232 - - 19,099,368 19,687,455 Total assets 14,631,415 15,238,017 9,857,962 4,841,853 19,099,368 63,668,615 Liabilities Non-interest bearing - - - - 1,264,703 1,264,703 Total liabilities - - - - 1,264,703 1,264,703 1
    • At 31 December Less than 1 1-12 1-3 years 3-5 years No fixed Total 2007 month months maturity £ £ £ £ £ £ Assets Fixed interest rate unquoted debt securities* - - - - 180,000 180,000 Cash at bank 35,122,695 20,340,564 - - - 55,463,259 Non-interest 351,781 76,068 - - 2,906,039 3,333,888 bearing Total assets 35,474,476 20,416,632 - - 3,086,039 58,977,147 Liabilities Non-interest bearing - - - - 87,144 87,144 Total liabilities - - - - 87,144 87,144 *Although the convertible loan note has an indicated redemption date written into the loan agreements, this redemption date is based on the planned event date. The actual event date is not known, therefore for maturity analysis purposes the convertible loan has been categorised as “No fixed maturity”. Concentration Risk Concentration risk may arise if the Company’s investments are concentrated in a low number of investments each representing a relatively large percentage of the Company’s net assets. While the Investment Manager will attempt to spread the Company’s assets among a number of investments in accordance with the investment policies adopted by the Company, at times the Company may hold a relatively small number of investments each representing a relatively large portion of the Company’s net assets. Losses incurred in such investments could have a materially adverse effect on the Company’s overall financial condition. Whilst the Company’s portfolio is diversified in terms of the companies in which it invests, the investment portfolio of the Company may be subject to more rapid change in value than would be the case if the Company were required to maintain a wider diversification among types of securities, countries and industry groups. 16. Dividend: The Directors do not recommend the payment of a dividend for the year ended 31 December 2008 (period ended 31 December 2007: £nil). 17. Taxation: The Income Tax Authority of Guernsey has granted the Company exemption from Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and the income of the Company may be distributed or accumulated without deduction of Guernsey income tax. Exemption under the above mentioned Ordinance entails payment by the Company of an annual fee of £600 each. It should be noted, however, that interest and dividend income accruing from the Company’s investments may be subject to withholding tax in the country of origin. With effect from 1 January 2008 the standard rate of income tax for most companies in Guernsey is zero per cent. Tax Exempt status continues to exist and the Company has been granted this status for 2008. The Company has suffered £1,506 withholding tax during the year (12 July 2007 to 31 December 2007: £nil). 18. Capital Management: The Directors may excerise the powers of the Company to borrow money and to give security over its assets. The Company may borrow funds secured on its investments if the Board (with the advice of Cenkos Fund Manager Limited) considers that satisfactory opportunities for investment arise at a time when the Company is close to being fully invested. In any event, borrowing will be limited to 25 per cent. of the Company’s last announced NAV at the time of draw down. The Company may also be indirectly exposed to the effects of gearing to the extent that investee companies have outstanding borrowings. 19. Post Balance Sheet Events: Since the year end we have reviewed in excess of 40 companies and made investments totaling circa £4 million. In addition, we have committed follow on investments totaling circa £9 million in 4 1
    • investee companies. We are also currently undertaking due diligence on investments with a total investment cost of circa £14 million There are no other significant post balance sheet events that require disclosure in these financial statements. Copies of the annual report will be sent to shareholders shortly and will be available for a period of one month to the public at the offices of Cenkos Fund Managers Limited at 6.7.8 Tokenhouse Yard, London, EC2R 7AS and will be available at the Company's website www.rapidrealisations.com. 2