Damille Investments II Limited

Half-Yearly
Financial Report
From 1 December 2014 to 31 May 2015
(Unaudited)

Damille Investments II Limited

CONTENTS

Summary Information

Chairmans Statement

Investment Report

Interim Management Report

1-3

5-8

Directors

10 - 11

Unaudited Financial Statements

12 - 15

Notes to Unaudited Financial Statements

16 - 31

Advisers and Contact Information

32

Damille Investments II Limited

SUMMARY INFORMATION
Company Overview
Damille Investments II Limited (LSE:DIL2) (the Company) is a Guernsey registered,
closed-ended investment company, incorporated on 3 November 2011.
The Company was admitted to trading on the Specialist Fund Market of the London
Stock Exchange and listed and admitted to trading on the Channel Islands Stock
Exchange (the CISX) on 9 November 2011.
On 20 December 2013 the Royal Court of Guernsey approved the scheme of
arrangement (the Scheme) between the CISX and The Channel Islands Securities
Exchange Authority Limited (the CISE). In accordance with the Scheme, the
business of the CISX was acquired by CISE. All securities that were listed on the
Official List of the CISX were transferred and are now listed on the Official List of
CISE.
To reduce operating costs and regulatory burden to the Company, the listing of the
Companys ordinary shares on the CISE was cancelled with effect from 21 July 2014.
The Company issued 74,000,000 ordinary shares of no par value (Shares) at 100
pence per Share on 9 November 2011.
On 28 February 2013 the Company issued a further 301,543 Shares at 103.83 pence
per Share in payment of the performance fee due for the performance period ended
30 November 2012.
On 27 February 2014 the Company redeemed 5,451,757 Shares at 103.64 pence
per Share under the Redemption Offer made to the Companys shareholders on 28
January 2014.
On 18 February 2015 the Company redeemed 9,554,308 Shares at 101.64 pence
per Share under the Redemption Offer made to the Companys shareholders on 21
January 2015.
In addition, during the period from 1 December 2014 to 31 May 2015 (the Period),
the Company bought back 960,476 Shares to be held in treasury. At the Period end
the Company held 4,293,528 Shares in treasury.

Investment Objectives and Policy

The Companys investment objective is to realise significant capital returns for its
shareholders with low volatility, by investing in a concentrated portfolio of primarily
equity securities. In the opinion of the Company, many but not all of these
companies would benefit from implementing certain measures to optimise their
balance sheets and align management and shareholder interests. Such issuers are
expected to be, but will not be limited to, closed-ended investment funds, investment
companies and other corporate entities, such as real estate companies or natural
resource companies.

Damille Investments II Limited

SUMMARY INFORMATION (CONTINUED)
Continuation Resolution
The Company does not have a fixed life, however the Companys directors (the
Directors) are required at the first Annual General Meeting held following the fourth
anniversary of admission to propose an ordinary resolution that the Company
continue its business as a closed-ended investment company (the Continuation
Resolution). If the Continuation Resolution is passed, the Directors are required to
propose a further Continuation Resolution at the Annual General Meeting held every
second year thereafter.
Redemption Offer
The Directors are permitted in each year following the second anniversary of
admission to offer at their absolute discretion to each holder of Shares an option to
redeem up to 15% of their shareholding, subject to any legal or regulatory
requirements and, in particular, The Companies (Guernsey) Law, 2008, as amended
(the Law) (the Redemption Offer). The Company intends to make a Redemption
Offer in each such year; save in exceptional circumstances, where the Directors
consider that to do so would result in a breach of applicable law or would have a
material adverse effect on the Company.
Distribution and Dividend Policy
The Company aims to provide the Companys shareholders (the Shareholders) with
an attractive total return, which is expected to comprise primarily capital growth,
although there is also the potential for distributions of income to be made throughout
the Companys life.
Return of Capital
The Company intends to reinvest capital proceeds from investments in accordance
with its investment policy and a significant proportion of the Companys Net Asset
Value may comprise cash or cash equivalents pending investment or such
reinvestments. However, to the extent that the Company receives capital proceeds
on its investments which exceed the Company's requirements from time to time, the
Directors will consider returning such excess funds to Shareholders. Any such
distribution would be at the Directors discretion and would be subject to compliance
with the Law (including any applicable requirements of solvency test contained
therein).
In exercising their discretion, the Directors will take into account the views of the
Company and the Corporate and Shareholder Adviser and may consult the
Companys principal Shareholders where appropriate. The Company will also have
the ability to make distribution payments out of realised investments if considered to
be in Shareholders interests.
Income Distributions
The nature of the Companys investment objective and strategy is such that the
timing and amount of investment income cannot be predicted. There can, therefore,
be no guarantee that dividends will be paid to Shareholders and, if dividends are
paid, as to the timing and amount of any such dividend.

Damille Investments II Limited

SUMMARY INFORMATION (CONTINUED)
Before recommending any dividend, the Board will consider the capital position of the
Company and the impact on such capital by virtue of paying that dividend. The
Company expects to declare any dividends in sterling.
As the Company has been granted reporting fund status by HM Revenue &
Customs, United Kingdom resident or ordinarily resident Shareholders, or any
Shareholders who carry on a trade in the United Kingdom through a branch, agency
of permanent establishment, will be subject to UK income tax or corporation tax (as
appropriate) on their share of the excess of the Companys reportable income for
any period of account over any amounts actually distributed by way of dividend, in
addition to such tax on amounts actually distributed.
Since the Directors intend to distribute all reportable income, such Shareholders
should not in practice be subject to UK tax on excess amounts of income not
actually distributed.
Discount Control
In accordance with the Companys Prospectus, the Directors have general
Shareholder authority to purchase, from time to time, up to 14.99% of the Companys
Shares in issue with a view to addressing any imbalance between the supply and
demand for Shares. The Directors intend to seek annual renewal of this authority
from Shareholders at each future general meeting held under section 199 of the
Law. In accordance with the Law any Share buy backs will be effected by the
purchase of Shares in the market for cash at a price below the estimated prevailing
net asset value per Share where the Directors believe such a purchase will enhance
Shareholder value. Shares which are purchased may be cancelled or held in
treasury.

Damille Investments II Limited

CHAIRMANS STATEMENT
I have pleasure in presenting the Half Yearly Financial Report of the Company for the
Period.
In my chairmans statement for the year ended 30 November 2014 I noted that
Volatility has risen since the mid-summer lows and this does bode well for the
Companys investment strategy. This has proved prescient and I am pleased to
note that the Executive Directors have taken advantage of the increased
opportunities available and that this is reflected in the Companys performance for
the Period.
It has been a positive start to the year and the Company has performed well. On
behalf of the Board of Directors, I thank all Shareholders for their support.
The Company's audited Net Asset Value (the "NAV") as at 31 May 2015 was 61.1
million or 111.15 pence per Share. As the NAV at 1 December 2014 was 103.88
pence per Share, the performance was an impressive 7% for the half year.
As can be seen from the Investment Report on pages 5 to 8, the Company has been
active in implementing the investment objective.
During the Period, the Company bought back 960,476 Shares to be held in treasury.
The Company intends to continue to buy back Shares optimistically where they are
available at significant discounts to NAV.
In addition, during the Period, the Company announced a redemption offer in which
Shareholders could elect to redeem up to 15% of their shareholding at a price equal
to the unaudited NAV per Share as at 31 January 2015 less 2.5%. Pursuant to the
redemption offer, 9,554,308 Shares were redeemed at 101.64 pence per Share.
It should be noted that since inception (when the Company raised 70.7 million net of
expenses) the Company has returned 19.2 million to Shareholders through the
redemption offers and share buy backs.
With the Company's portfolio performing well and with a much greater opportunity
set, the outlook for the Company remains positive.

Richard Prosser
Chairman

Damille Investments II Limited

INVESTMENT REPORT
During the Period, the Companys net asset value per Share rose by 7%. Since
launch on 3 November 2011 until the 31 May 2015, the Companys net asset value
per Share increased by 16.25%.
The Company is invested with weightings of approximately 79.54% in equities and
20.46% in cash. Since launch the Company has invested over 107.48 million and
realised over 5.08 million, generating a realised gain of approximately 7.18% on its
investments.
At the Period end, the Company held thirty three investments, of which seven are
notifiable under the Disclosure and Transparency Rules (DTR). The five largest
investments account for 38.95% of our NAV. In total the top ten investments
(including cash) accounted for 73.90% of our NAV.
Whilst we still believe that the near term outlook is challenging for the risk averse
investor, we have seen increased volatility in certain asset classes and in assets we
monitor. Our investment philosophy is that the price paid for an investment is the
most important factor in mitigating the risk of permanent capital loss.
We have taken advantage of a number of situations to both increase investments in
some existing holdings and to initiate new positions. The Companys cash balance
has reduced both as a result of the increased investment activity and also as a result
of the redemption offer in February 2015, which utilised 9.7 million of its cash
balance.
We set out below a summary of the Companys portfolio composition. Where any
particular investments are notifiable under the DTR or are in our top five holdings and
have been disclosed in the Companys fact sheet, these are detailed as in previous
periods, however, where investments are not notifiable under the DTR or not within
our top five holdings, we do not disclose names so as not to prejudice our ability to
further deal in those investments.
Overview of Investments
The Companys portfolio is demarcated into five distinct classes as follows:
1.

Private Equity and Venture (Six holdings representing 20.08% of NAV)

We have maintained some exposure to the Listed Private Equity and Venture
sectors. In so far as these are listed holdings, the discounts are greater than in other
closed-end funds. The capital management at these funds has improved markedly,
we are attracted to those funds that are in run-off or returning excess capital and/or
actively managing discounts. The recent past has also provided an attractive
environment for private equity realisations. Whilst discounts have narrowed across
the sectors we believe certain names still merit further re-rating.
Private Equity Investor PLC (PEQ) (notifiable under the DTR)
PEQ is a UK investment trust which invests through venture funds in early
stage technology companies. At the Period end the Company held a 21.8%
shareholding in PEQs issued share capital.

Damille Investments II Limited

INVESTMENT REPORT (CONTINUED)
2.

Other listed funds (Six holdings representing 13.64% of NAV)

Here we again look for the combination of attractive discounts to realisable net asset
value and rational capital management policies. We are attracted to funds that are in
run-off and/or returning excess capital and/or actively managing discounts. The
underlying exposures of these funds are extremely diverse.
Blackstar Group SE (BLCK) (previously notifiable under the DTR)
BLCK is a Malta registered, closed-ended investment company established to
invest in African opportunities.
The Ukraine Opportunity Trust plc (UKRO) (notifiable under the DTR)
UKRO is a LSE listed investment trust.
Treveria PLC (TRV) (notifiable under the DTR)
TRV is an Isle of Man registered, closed-ended investment company
established to invest in German real estate.
St Peter Port Capital Limited (SPPC) (notifiable under the DTR)
SPPC is a Guernsey registered, closed-ended investment company
established with the aim of generating value for shareholders by investing in
growth companies.
3.

Holding companies trading at a discount (Five holdings representing

24.07% of NAV)

Holding companies share many characteristics of closed-end funds and is a space

where we consistently look for securities that trade at significant discounts to our
estimate of their realisable net asset values. We have increased the Companys
allocation in this area, notably in the holdings of Sistema and AKER ASA. These
holdings, particularly Sistema, have performed very well for the Company and our
only regret was in not allocating more capital to the names the Company holds.
Sistema JFSC GDR (Sistema)
Sistema is a publicly-traded diversified holding company in Russia and the
Commonwealth of Independent States, which invests in and is a major
shareholder of companies serving over 100 million customers in the sectors
of telecommunications, high technology, radars and aerospace, banking,
retail, mass-media, tourism and healthcare services. We believe that
Sistemas 55% discount to the sum-of-its-parts is unwarranted, and were it to
trade at $14 per GDR this would still represent a discount of ca. 40%.
AKER ASA
AKER ASA is a Norwegian company whose ownership interests within its
main business activities are concentrated on the energy, environment,
fisheries & marine biotech and finance sectors.

Damille Investments II Limited

INVESTMENT REPORT (CONTINUED)
4.

Natural resources closed-end funds and natural resources companies

(Eight holdings representing 7.25% of NAV)

Certain natural resource companies are currently valued at significant discounts to

their asset values and in some cases, at discounts to their net cash. Clearly, in these
circumstances we are most alert to the risk of the cash being rapidly depleted. We
have also experienced, and are alert to, the possibility of further NAV declines, which
may justify the apparent discounts.
Kolar Gold Limited (Kolar) (notifiable under the DTR)
Kolar is a cash-rich, gold exploration company, incorporated in Guernsey and
focused primarily on the Kolar Gold Field region to the east of Bangalore in
India. At the Period end the Company held an 18.28% shareholding in Kolar.
Ovoca Gold plc (OVG) (notifiable under the DTR)
OVG is a cash-rich gold explorer incorporated in Ireland and operating in
Russia. At the Period end the Company held a 5.5% shareholding in OVG.
Sunrise Resources plc (notifiable under the DTR)

Sunrise Resources plc is an AIM-traded, diversified mineral exploration and
development company. The Company was the lead investor in a placing of
new shares. We negotiated a large warrant position which gives upside
leverage on the investment. The Company holds 56,500,000 shares in
Sunrise Resources plc and 30,000,000 warrants.
5.

Corporates with rational capital management policies (Two holdings

representing 6.57% of NAV)

The Company holds five investments in companies with rational capital management
policies such that their excess cash generation is, and can be, returned to
shareholders in a variety of ways.
The commentary above (which covers over 75% of the Company's positions by
number and 95% by value) aims to provide clarity on the rationale for each
investment.
Investment Allocation
At 31 May 2015, the Company's net assets were allocated in the following
proportions (% net assets):
Notifiable shareholdings: 12.89%
2,562,263 shares in Private Equity Investor PLC: 7.64%
4,315,000 shares in St Peter Port Capital Limited: 1.67%
22,366,991 shares in Kolar Gold Limited: 0.63%
4,807,100 shares in Ovoca Gold plc: 0.47%
56,500,000 shares in Sunrise Resources plc: 0.16%
120,000 shares in Ukraine Opportunity Trust plc: 0.25%
71,497,718 shares in Treveria plc: 2.07%

Damille Investments II Limited

INVESTMENT REPORT (CONTINUED)
Non-Notifiable shareholdings: 66.65%
Cash (incl. net working capital): 20.46%
In our opinion the sector exposures at the Period end were:
Private Equity: 22.71%
Other Listed Funds: 14.92%
Holding Companies: 26.21%
Natural Resources: 7.63%
Corporates: 7.76%
Other: 0.31%
Outlook
We are very pleased with the Companys portfolio and believe we have secured
these investments at a sufficient discount to our estimate of the realisable value of
those investments. We also believe the portfolio should continue to perform.
Since the Period end the Company has also acquired 20% of The Local Shopping
REIT plc (LSR). LSR is a UK Real Estate Investment Trust ("REIT") with an
established portfolio of local shops in urban and suburban areas throughout the UK.
LSR is in a realisation phase whereby it is seeking buyers for its properties with a
view to returning cash to shareholders.
The Company retains a healthy cash balance and hence retains the flexibility to
continue with Share buy backs.
The Companys aim remains to invest in situations where we believe the share price
represents a significant discount to the realisable net asset value and then to realise
that value in the medium term. We are confident that our investment strategy and
processes will continue to provide attractive returns in the medium and longer term.
Whilst we do not make macro judgements, we believe quantitative easing (QE) has
distorted markets and added downside risk. It seems logical to us that if QE has
inflated the prices of many risk assets, then its removal may at least lead to some
volatility. The Company is well positioned to take advantage of any such volatility in
the prices of the securities we track and analyse.

Brett Miller
Executive Director

Rhys Davies
Executive Director

Damille Investments II Limited

INTERIM MANAGEMENT REPORT
Interim Management Report
A description of the important events that have occurred during the Period and their
impact on the condensed set of financial statements is included in the Investment
Report on pages 5 to 8. Details of all related party transactions are given in Note 14.
Other than the information set out in the Chairmans Statement and the Investment
Report, the Board is not aware of any events during the six months ended 31 May
2015, which would have had a material impact on the financial position of the
Company.

The Directors jointly and severally confirm that, to the best of their knowledge:

(a)

The financial statements, prepared in accordance with International Financial

Reporting Standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and

(b)

This Interim Management Report includes or incorporates by reference:

(i)

an indication of important events that have occurred during the first six
months of the financial year and their impact on the financial
statements;

(ii)

a description of the principal risks and uncertainties for the remaining

six months of the financial year;

(iii)

confirmation that there were no related party transactions in the first

six months of the current financial year that have materially affected
the financial position or the performance of the Company during that
period; and

(iv)

changes in the related party transactions described in the Prospectus

that could have a material effect on the financial position or
performance of the Company in the first six months of the current
financial year.

Signed on behalf of the Board of directors on 23 July 2015.

Richard Prosser
Chairman

David Copperwaite
Director

Damille Investments II Limited

DIRECTORS
Richard Prosser: Chairman (independent non-executive)
Richard Prosser is a Chartered Accountant, a partner of the Appleby Group and a
director of its wholly owned trust company, Appleby Trust (Jersey) Limited, a
corporate and fiduciary administrator authorised to conduct trust company business
in Jersey. Richard is a director of a number of companies quoted in London and
elsewhere, including property companies, hedge funds and investment management
companies. He is Chairman of Threadneedle Investments (C.I.) Limited, manager of
the Threadneedle Property Unit Trust. He is also Chairman of the Aberdeen Latin
American Income Fund, listed on the CISE and the London Stock Exchange.

David Copperwaite: Director (independent non-executive)

David Copperwaite retired as the Managing Director of Lloyds Bank Fund Managers
(Guernsey) Limited on 31 December 1997. He is based in Guernsey and provides
consultancy and advisory services to offshore fund management groups. He is the
director of a number of regional, global, private equity and emerging market
investment funds, including Aberdeen Private Equity Fund Limited which is listed on
the CISE and the London Stock Exchange. David has considerable experience in the
management and administration of offshore funds.

Martin Tolcher: Director (independent non-executive)

Martin Tolcher is a Chartered Fellow of the Chartered Institute for Securities and
Investment (Chartered FCSI) and has been involved within the fund administration
industry in Guernsey for over 25 years. He has worked at a senior level for three fund
administration subsidiaries of Bermudan and Canadian international banks, gaining
considerable experience in a wide variety of funds and private equity structures.
Martin joined Legis Group in 2005 as a director of Legis Fund Services Limited and
became Managing Director of that company at the beginning of 2007, a role he had
until 31 December 2010 (he remained as a director until 30 September 2011). Martin
is a non-executive director of a number of open and closed-ended Guernsey
domiciled funds and associated management companies.

10

Damille Investments II Limited

DIRECTORS (CONTINUED)
Brett Miller: Director (executive)

Brett Miller is a General Partner of Damille Partners, which he established in October

2008 with Rhys Davies (with each holding a 50% partnership interest). He presently
serves as a Non-Executive Director of Pactolus Hungarian Property plc and
Manchester and London Investment Trust plc. Brett graduated from the University of
Witwatersrand (South Africa) with a bachelors degree majoring in law and
economics and additionally holds a law degree from the London School of
Economics (after having relocated to the United Kingdom in 1988). He qualified as a
solicitor and practised until December 1997.

Rhys Cathan Davies: Director (executive)

Rhys Davies is a General Partner of Damille Partners, which he established in

October 2008 with Brett Miller (with each holding a 50% partnership interest). He is
also an Executive Director of Damille Partners Limited. Rhys also presently serves
as Chairman of EIH plc, an AIM quoted Isle of Man registered investment company.
Rhys holds degrees from the University of Wales, Cardiff and Imperial College,
London, as well as the CFA designation.

11

STATEMENT OF COMPREHENSIVE INCOME

for the period ended 31 May 2015

Notes

Net movement in unrealised

appreciation / (depreciation) on
investments

Realised (loss) / gain on investments

Net gain on investments

Period ended
31 May 2015
GBP

Period ended
31 May 2014
GBP

6,653,395

(1,176,967)

(2,716,050)

1,678,689

3,937,345

501,722

Operating income

779,833

274,406

Operating expenses

(741,376)

(851,819)

Net gain / (loss) for the period

attributable to Shareholders

3,975,802

Other comprehensive income

Total comprehensive income / (loss)

3,975,802

Earnings/(loss) per share for the period basic and diluted

(75,691)
(75,691)

Pence

Pence

6.60

(0.11)

In arriving at the results for the period, all amounts above relate to continuing operations.

The notes on pages 16 to 31 form an integral part of these financial statements.

12

STATEMENT OF FINANCIAL POSITION

as at 31 May 2015

Notes

31 May 2015
GBP

30 Nov 2014
GBP

49,332,354

33,345,272

102,853
12,687,463
12,790,316

2,496,653
32,970,936
35,467,589

62,122,670

68,812,861

984,539

1,101,157

61,138,131

67,711,704

51,859,085
9,279,046

62,408,460
5,303,244

61,138,131

67,711,704

Non-current assets
Financial assets designated as at fair
value through profit or loss
Current assets
Trade and other receivables
Cash and cash equivalents

Total assets
Current liabilities
Trade and other payables

Net assets

Equity
Share capital
Accumulated reserves

10,11

Total equity

Net asset value per ordinary share based on 55,001,950

(Nov 2014: 65,516,734) Shares in issue

Pence

Pence

111.15

103.35

The financial statements were approved by the Board of Directors and authorised for issue on
23 July 2015 and are signed on its behalf by:

Chairman

Director

The notes on pages 16 to 31 form an integral part of these financial statements.

13

STATEMENT OF CASH FLOWS

for the period ended 31 May 2015

Notes
Operating activities
Net gain / (loss) for the period
attributable to shareholders
Unrealised (appreciation) / depreciation
on investments
Interest income
Bond income
Dividend income
Decrease in payables
Decrease / (increase) in receivables
Realised (loss) / gain on investments

7
3
3
3
9
8
7

Net cash flow used in operating activities

Period ended
31 May 2015
GBP

3,975,802

(75,691)

(6,653,395)
(49,307)
(8,242)
(722,284)
(16,345)
2,382,780
2,716,050

1,176,967
(80,933)
(6,707)
(186,766)
(29,406)
(29,402)
(1,678,689)

1,625,059

Investing activities
Interest received
Bond interest received
Dividend received from investments
Purchase of investments
Sale of investments

3
3
3
7
7

Net cash flow from investingactivities

Period ended
31 May 2014
GBP

49,307
8,242
722,284
(17,944,487)
5,805,497
(11,359,157)

(910,627)

80,933
6,707
186,766
(14,092,974)
14,633,417
814,850

Financing activities
Costs from redemption of Ordinary
shares
Purchase of own shares

10
11

Net cash flow used in financing activities

Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents
Cash and cash equivalents at end of period

(9,710,999)
(838,376)

(5,650,201)
(1,501,847)

(10,549,375)

(7,152,048)

32,970,936

41,688,041

(20,283,473)

(7,247,826)

12,687,463

34,440,215

The notes on pages 16 to 31 form an integral part of these financial statements.

14

STATEMENT OF CHANGES IN EQUITY

for the period ended 31 May 2015

Share
Capital
GBP
Balance as at 1 December 2014

Accumulated
Reserves
GBP

Total
GBP

62,408,460

5,303,244

67,711,704

3,975,802

3,975,802

Net gain for the period

Share redemptions during the period

(9,710,999)

(9,710,999)

Treasury shares acquired during the

period

(838,376)

(838,376)

Balance as at 31 May 2015

51,859,085
Share
Capital
GBP

Balance as at 1 December 2013

70,638,696

Net gain for the period

9,279,046
Accumulated
Reserves
GBP

61,138,131

Total
GBP

8,180,881

78,819,577

(2,877,636)

(2,877,636)

Share issue proceeds during the period

(5,650,201)

(5,650,201)

Treasury shares acquired during the

period

(2,580,035)

(2,580,035)

Balance as at 30 November 2014

Issue costs

62,408,460
(1,654,431)

5,303,244
-

67,711,704
(1,654,431)

Balance as at 28 November 2014

52,523,793

2,425,608

54,949,401

The notes on pages 16 to 31 form an integral part of these financial statements.

15

NOTES TO THE FINANCIAL STATEMENTS

for the period ended 31 May 2015
1 GENERAL INFORMATION
Damille Investments II Limited is a closed-ended investment company incorporated in
Guernsey on 3 November 2011, which listed on the Channel Islands Security Exchange
Authority Limited ("CISE") and was admitted to trading on both the Specialist Fund Market
("SFM") of the London Stock Exchange and the CISE on 9 November 2011. On 21 July 2014
the Company delisted from CISE as dual listing was no longer required.
The principal activity of the Company is to realise capital growth from a portfolio of equities and
to generate a significant capital return to Shareholders.
The Companys investment objective is to realise significant capital returns for its shareholders
with low volatility, by investing in a concentrated portfolio of primarily equity securities. In the
opinion of the Company, many but not all of these companies would benefit from implementing
certain measures to optimise their balance sheets and align management and shareholder
interests. Such issuers are expected to be, but will not be limited to, closed-ended investment
funds, investment companies and other corporate entities, such as real estate companies or
natural resource companies.
2 ACCOUNTING POLICIES
The significant accounting policies adopted by the Company are as follows:
(a) Basis of Preparation
The financial statements have been prepared in conformity with International Financial
Reporting Standards ("IFRS") as adopted by the European Union which comprise standards
and interpretations approved by the International Accounting Standards Board ("IASB") and
International Financial Reporting Interpretations Committee ("IFRIC"), together with applicable
Guernsey law. The financial statements have been prepared on an historical cost basis except
for the measurement at fair value of certain financial instruments.
Changes in Standards and Interpretations
The following Standards or Interpretations have been adopted in the current period. Their
adoption has not had any impact on the amounts reported in these financial statements and is
not expected to have any impact in future financial statements:
IAS 32 Financial Instruments: Presentation - Amendments resulting from Annual Improvements
cycle effective for annual periods beginning on or after 1 January 2013.
IAS 32 Financial Instruments: Presentation - Amendments relating to the offsetting of assets
and liabilities effective for annual periods beginning on or after 1 January 2014.

16

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
2 ACCOUNTING POLICIES (CONTINUED)
(a) Basis of Preparation (continued)
The following Standards or Interpretations have been issued by the IASB but not yet adopted
by the Company:
IFRS 7 Financial Instruments: Disclosures - Deferral of mandatory effective date of IFRS 9 and
amendments relating to additional hedge accounting disclosures (and consequential
amendments). Applies only when IFRS 9 is adopted, which is effective for annual periods
beginning on or after 1 January 2018.
IFRS 7 Financial Instruments - Amendments resulting from September 2014 Annual
Improvements to IFRSs, effective for annual periods beginning on or after 1 January 2016.
IFRS 9 Financial Instruments - Classification and measurement of financial liabilities and
derecognition, effective for annual periods beginning on or after 1 January 2018.
IFRS 13 Fair Value Measurement - Amendments resulting from Annual improvements for
annual periods beginning on or after 1 July 2014.
IFRS 9 Financial Instruments - Accounting for financial liabilities and derecognition, effective for
annual periods beginning on or after 1 January 2018.
IFRS 9 Financial Instruments - Finalised version, incorporating requirements for classification
and measurement, impairment, general hedge accounting and derecognition. There is no
mandatory effective date, however IASB has tentatively proposed that this will be effective for
accounting periods commencing on or after 1 January 2018 (EU endorsement is outstanding).

IAS 1 Presentation of Financial statements - Amendments resulting from December 2014

disclosure initiative, effective for annual periods beginning on or after 1 January 2016.
IAS 34 Interim Financial Reporting - Amendments resulting from September 2014 Annual
Improvements to IFRSs, effective for annual periods beginning on or after 1 January 2016.
The Directors have considered the above and are of the opinion that the above Standards and
Interpretations are not expected to have a material impact on the Company's financial
statements except for the presentation of additional disclosures and changes to the
presentation of components of the financial statements. These items will be applied in the first
financial period for which they are required.

17

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
2 ACCOUNTING POLICIES (CONTINUED)
(b) Use of estimates and judgements
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and in any
future periods affected. The preparation of the Companys financial statements requires
management to make judgements, estimates and assumptions that affect the reported
amounts recognised in the financial statements and disclosures. However, uncertainty about
these assumptions and estimates could result in outcomes that could require material
adjustment to the carrying amount of the assets or liabilities in future periods.
Information about significant areas of estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the
financial statements are disclosed below. The Directors consider that the most significant
estimate is the valuation of Level 3 investments as shown in Note 7.
The financial statements are expressed in pounds sterling ("GBP"), which is the functional and
presentation currency of the Company.
(c) Going concern
After making enquiries, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable future. The
Directors believe the Company is well placed to manage its business risks successfully despite
the current economic climate. Accordingly, the Directors have adopted the going concern basis
in preparing the financial information.
(d) Taxation
The income tax authority of Guernsey has granted the Company exemption from Guernsey
income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and the
income of the Company may be distributed or accumulated without deduction of Guernsey
Income Tax. Exemption under the above mentioned ordinance entails payment by the
Company of an annual fee of 1,200 for each year in which the exemption is noted. It should be
noted however, that interest and dividend income accruing from the Companys investment may
be subject to withholding tax in the country of origin. With effect from 1 January 2008 the
standard rate of income tax for most companies in Guernsey became 0%. Tax exemption
continues to exist and the Company has been granted this status for 2015. The Directors intend
to conduct the Companys affairs so that it continues to remain eligible for exempt tax status for
Guernsey Tax.
(e) Expenses
All expenses are accounted for on an accruals basis.
(f) Revenue recognition
Dividend income is recognised when the right to payment is established.
Bank interest income and other income are included in the financial statements on an accruals
basis.

18

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
2 ACCOUNTING POLICIES (CONTINUED)
(g) Cash and cash equivalents
Cash at bank and short term deposits which are held to maturity are carried at cost. Cash and
cash equivalents in the Statement of Financial Position comprise of cash at bank, call deposits,
short term deposits, short term cash with original maturities of three months or less and highly
liquid investments readily convertible to known amounts of cash and subject to insignificant risk
of changes in value. For the purposes of the Statement of Cash Flows, cash and cash
equivalents consist of cash and cash equivalents defined above.
(h) Share issue costs
The share issue costs borne by the Company are recognised in the Statement of Changes in
Equity, as the Company's Ordinary shares are classified as equity under paragraphs 16C and
16D of IAS 32 Financial Instruments: Presentation .
(i) Investments
All investments have been designated as financial assets "at fair value through profit or loss.
Investments are initially recognised on the date of purchase at cost, being the fair value of the
consideration given, excluding transaction costs associated with the investment. After initial
recognition, investments are measured at fair value, with unrealised gains and losses on
investments and impairment of investments recognised in the Statement of Comprehensive
Income.
Investments are derecognised when the rights to cash flows from the investments have expired
or substantially all risks and rewards of ownership have been transferred. Upon derecognition
any previously recognised unrealised gain or loss is reversed in the current periods net
movement in unrealised depreciation on investments and recognised in the realised gain on
investments along with any additional gain or loss recognised in the period. In accordance with
IFRS the net gains on investments shows the total gain or loss recognised in the current
period.
Commissions paid on the sale or purchase of investments are recognised in the Statement of
Comprehensive Income as incurred.
Fair value is the amount for which the financial instruments could be exchanged, or a liability
settled, between knowledgeable willing parties in an arms length transaction. Fair value also
reflects the credit quality of the issuers of the financial instruments.
For investments actively traded in organised financial markets, fair value is determined by
reference to Stock Exchange quoted market bid prices as at the close of business on the
reporting date. If no quoted market bid price is available at the close of business on the
reporting date, the last available market bid price is used.
Where no quoted market prices are available, the valuation of the investment is based on the
quarterly NAV provided to the Company, adjusted for any subsequent distributions received.

19

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
2 ACCOUNTING POLICIES (CONTINUED)
(i) Investments (continued)
The Company held zero dividend preference shares ("ZDPs") in prior periods which were
valued using an annually compounded interest rate agreed on receipt of the shares. This rate
was reviewed by the Directors to ensure it remained the most appropriate yield.
Warrants held by the Company are valued using a warrant calculator which uses directly
observable market inputs.
(j) Trade date accounting
All regular way purchases and sales of financial assets are recognised on the trade date, i.e.
the date that the entity commits to purchase or sell the asset. Regular way purchases or sales
are purchases or sales of financial assets that require delivery of the asset within the time
frame generally established by regulations or convention in the market place.
(k) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business,
being investment business and operates solely from Guernsey; therefore no segmental
reporting is provided based on operating segments. All dividend income as detailed in Note 3
was primarily received from investments with a country of incorporation in Europe with less than
10% of the income from investments incorporated in the Rest of the World.
(l) Foreign currency translation
Transactions denominated in foreign currencies are translated into GBP at the rate of exchange
ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are
translated to the functional currency at the foreign exchange ruling at that date. Foreign
exchange differences arising on translation are recognised in the Statement of Comprehensive
Income.
3 OPERATING INCOME
Period ended
31 May 2015
GBP
Bank interest
Bond income
Dividend income

20

Period ended
31 May 2014
GBP

49,307
8,242
722,284

80,933
6,707
186,766

779,833

274,406

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
4 OPERATING EXPENSES
Period ended
31 May 2015
GBP

Period ended
31 May 2014
GBP

Investment advisory fees

Directors' fees
Corporate and shareholder advisory fees
Brokerage
Administrator's fee
Annual fees
Audit fees
Directors' and Officers' insurance
Other insurance
Sundry costs
Registrar's fee
Accountancy fees
Legal and professional fees
Bank interest and charges
Witholding tax
Loss on foreign exchange

454,295
84,250
59,864
43,231
22,636
7,538

533,513
84,258
71,515
94,772
24,280
10,809

6,973
3,989
1,121
8,873
3,991
2,992
3,003
1,352
29,092
8,176

8,732
4,139
1,121
4,696
4,378
2,992
2,950
668
2,798
198

Net operating expenses for the period

741,376

851,819

5 DIRECTORS' REMUNERATION
The Non-Executive Directors are paid 20,000 per annum. David Copperwaite receives an
additional fee of 3,500 as Chairman of the audit committee and Richard Prosser receives an
additional fee of 5,000 as Chairman of the Company. The Executive Directors are each paid
50,000 per annum.
6 EARNINGS / (LOSS) PER SHARE
Earnings / (loss) per share is calculated by dividing the net gain / (loss) for the period
attributable to Shareholders of 3,975,802 (May 2014: loss 75,691) by the weighted average
number of Shares in issue during the period 60,239,661 (May 2014: 70,232,646). There are no
dilutive instruments and therefore basic and diluted earnings per Share are identical.

21

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
7 INVESTMENTS
TOTAL
31 May 2015
GBP

TOTAL
30 Nov 2014
GBP

Opening valuation
Additions - cost
Proceeds from sales
Realised (loss) / gain on investments
Movement in unrealised appreciation / (depreciation) on
investments

33,345,272
17,944,487
(5,894,750)
(2,716,050)

37,262,132
23,408,944
(22,874,058)
1,156,034

6,653,395

(5,607,780)

Closing valuation

49,332,354

33,345,272

Closing portfolio cost

45,385,537

36,051,850

3,946,817

(2,706,578)

FINANCIAL ASSETS DESIGNATED

AS AT FAIR VALUE THROUGH PROFIT OR LOSS

Unrealised appreciation / (depreciation) on valuation

carried forward

IFRS 13 requires the fair value of investments to be disclosed by the source of inputs, using a
three-level hierarchy as detailed below:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2);
Inputs for the asset or liability that are not based on observable market data (unobservable
inputs) (Level 3).
Investments held by the Company have been classified as Level 1, for those investments that
are quoted and are valued using quoted market bid prices. The Company invests in warrants
which are valued using a warrant calculator using observable market inputs and are therefore
classified as Level 2. Praetorian warrants have been recapitalised and the Net Asset Value
(NAV) per share is below the warrants excercise price, therefore the warrants are being valued
at nil.
The Company also invests in managed funds which are not quoted in an active market and
which may be subject to restrictions on redemptions. Investments in those funds are valued
based on the Net Asset Value (NAV) per share published by the administrator of those funds
adjusted for any distributions. The Company classifies the fair value of these investments as
Level 3. The value of these investments as at 31 May 2015 was 5,614,507 (Nov 2014:
5,380,602). If the NAV of these investments were to increase/ decrease by 10%, this would
result in in and increase/ decrease in the fair value as at 31 May 2015 of 561,451 (Nov 2014:
538,060).

22

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
7 INVESTMENTS (CONTINUED)
The Company invests in zero dividend preference shares (ZDPs) which are valued using an
annually compounded coupon rate as set out an acquisition of the investment. The Company
classifies the ZDPs as Level 3. During the period the Company disposed of its holding in ZDPs.
The value of these investments as at 31 May 2015 was nil (Nov 2014: 1,679,169). The
required rate of return is fixed at the agreed coupon rate of 11%, therefore the fair value is fixed
and no sensitivity has been applied.
Details of the value of each classification are listed in the table below. Values are based on the
market value of the investments as at the reporting date:

Level 1
Level 2
Level 3
Total

Market Value
31 May 2015
GBP
43,714,847
3,000
5,614,507

Market Value
30 Nov 2014
GBP
26,215,108
70,395
7,059,771

49,332,354

33,345,272

The following table shows a reconciliation of all movements in the fair value of financial
instruments categorised within Level 3 between the beginning and the end of the reporting
period:
31 May 2015
GBP
7,059,771
(1,841,199)
162,030

Opening valuation
Sales proceeds
Net realised gain on valuation for the period
Movement in unrealised (depreciation) / appreciation on
valuation of the period
Closing valuation

233,905
5,614,507

30 Nov 2014
GBP
7,275,928
-

(216,157)
7,059,771

8 TRADE AND OTHER RECEIVABLES

31 May 2015
GBP
Prepayments and accrued income
Broker debtors

102,853
-

2,485,633
11,020

102,853

2,496,653

The above carrying value of receivables is equivalent to its fair value.

23

30 Nov 2014
GBP

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
9 TRADE AND OTHER PAYABLES
31 May 2015
GBP
Accrued expenses
Broker creditors

30 Nov 2014
GBP

111,494
873,045

127,839
973,318

984,539

1,101,157

The above carrying value of payables is equivalent to its fair value.

10 SHARE CAPITAL
The Company is authorised to issue an unlimited number of Ordinary Shares of no par value.
Reconciliation of number of shares
31 May 2015
SHARES

GBP

30 Nov 2014
SHARES

GBP

Shares of no par value

Issued Shares at the start of the
period
Redemption of Shares
Purchase of Shares into
Treasury
Shares in issue at the end of
the period

65,516,734
(9,554,308)

62,408,460
(9,710,999)

73,830,043
(5,451,757)

70,638,696
(5,650,201)

(960,476)

(838,376)

(2,861,552)

(2,580,035)

65,516,734

62,408,460

55,001,950

51,859,085

Shareholders are entitled to receive, and participate in: any dividends out of income; other
distributions of the Company available for such purposes and resolved to be distributed in
respect of any accounting period; or other income or right to participate therein.
On a winding up, Shareholders are entitled to the surplus assets remaining after payment of all
the creditors of the Company.
Shareholders also have the right to receive notice of and to attend, speak and vote at general
meetings of the Company and each Member being present in person or by proxy or by a duly
authorised representative at a meeting shall upon a show of hands have one vote and upon a
poll each such holder present in person or by proxy or by a duly authorised representative shall
have one vote in respect of every ordinary share held by him.

24

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
11 TREASURY SHARES
31 May 2015
SHARES

GBP

30 Nov 2014
SHARES

GBP

Shares held in Treasury

Opening balance
Shares bought into Treasury
during the period
Shares in Treasury at the end
of the period

3,333,052

3,051,535

471,500

471,500

960,476

838,376

2,861,552

2,580,035

4,293,528

3,889,911

3,333,052

3,051,535

The treasury shares represent 4,293,528 (2014: 3,333,052) Shares purchased in the market at
various prices per Share ranging from 0.83 to 0.94 and held by the Company in treasury. No
cancellations of Shares took place during the period.
12 FINANCIAL INSTRUMENTS
The Companys main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Company's operations; and
(b) Quoted investment securities; and
(c) Unquoted investment securities.
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Companys financial instruments are market price risk, credit
risk, liquidity risk, interest rate risk, and capital management risk. The Board regularly review
and agrees policies for managing each of these risks and these are summarised below:
(a) Market price risk
Market price risk arises mainly from uncertainty about future prices of financial instruments held.
It represents the potential loss the Company might suffer through holding market positions in the
face of price movements. The Executive Directors actively monitor market prices and reports to
the Board as to the appropriateness of the prices used for valuation purposes.
If the value of the Company's investment portfolio were to increase by 30%, it would represent a
gain of 14,799,706 (Nov 2014: 10,003,582) and this would cause the net asset value of the
Company to rise by 24.20% (Nov 2014: 14.77%).

25

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(a) Market price risk (continued)
If the value of the Company's investment portfolio were to decrease by 30%, it would represent
a loss of 14,799,706 (Nov 2014: 10,003,582) and this would cause the net asset value of the
Company to fall by 24.20% (Nov 2014: 14.77%).
A substantial proportion of the Company's investments is in closed-ended funds or companies
sharing similar characteristics to closed-ended funds and is subject to the risk of concentrating
its investments in this asset class. The Directors attempt to minimise this market risk by
undertaking a detailed analysis of the risk/ reward relationship prior to any investment being
made. In addition, the Company also invests in equity securities reducing the concentration of
assets to one type of asset class.
(b) Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a
commitment that it has entered into with the Company. The Directors receive financial
information on a regular basis which is used to identify and monitor risk.
It is Company policy not to invest more than 20% of the net asset value of the Company as at
the date of admission in the securities of any one company or group at the time the investment
is made.
Cash is held in accounts with Barclays, which have a credit rating of BBB, as stated by
Standard & Poors.
Investors should be aware that the prospective returns to Shareholders mirror the returns under
the investments held or entered into by the Company and that any default by an issuer of any
such investment held by the Company would have a consequential adverse effect on the ability
of the Company to pay some or all of the entitlement to Shareholders. Such a default might, for
example, arise on the insolvency of an issuer of an investment.
The Companys financial assets exposed to credit risk are as follows:
31 May 2015
GBP
12,687,463
102,853
12,790,316

Cash and cash equivalents

Trade and other receivables

30 Nov 2014
GBP
32,970,936
2,480,399
35,451,335

The Company is exposed to credit risk in respect of its cash and cash equivalents, arising from
possible default of the relevant counterparty, with a maximum exposure equal to the carrying
value of those assets. The credit risk on liquid funds is limited because the counterparties are
banks with high credit-ratings assigned by international credit-rating agencies. The Company
monitors the placement of cash balances on an on-going basis.

26

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(b) Credit risk (continued)
The investments of the Company are held in custody by Nplus1 Singer Capital Markets Limited,
Midas Investments Limited and Paul E Schweder Miller & Co. Bankruptcy or insolvency of the
Custodian may cause the Companys rights with respect to investments held by the Custodian
to be delayed. Investments held with Nplus1 Singer Capital Markets Limited, Midas Investment
Limited and Paul E Schweder Miller & Co. are ring fenced and will be protected should the
Broker become bankrupt or insolvent. The warrant certificate for the investment in Duke Royalty
Ltd (previously known as Praetorian Resources Limited) is held in custody by the Secretary of
the Company.
(c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in realising assets or
otherwise raising funds to meet financial commitments. The Companys main financial
commitment is its ongoing operating expenses.
The Directors ensure that the Company has sufficient liquid resources available to fulfil its
operational plans to meet its financial obligations as they fall due.
The table below details the residual contractual maturities of financial liabilities:

As at 31 May 2015

1-3 months
GBP

Accrued expenses
Broker creditors

As at 30 November 2014

111,494
873,045

984,539

1-3 months
GBP

Accrued expenses
Broker creditors

3 months to 1
year
GBP

3 months to 1
year
GBP

127,839
973,318

1,101,157

(d) Interest rate risk

The Company holds cash in bank accounts, the returns on which are subject to fluctuations in
market interest rates. Other than cash and cash equivalents, none of the assets or liabilities of
the Company attract or incur interest.

27

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(d) Interest rate risk (continued)
The following table details the Company's exposure to interest rate risks:
As at 31 May 2015:
Fixed

Floating

Less than 1
month 1-3 months
GBP
GBP

Fixed
Greater
than 3
months
GBP

Noninterest
bearing
GBP

Total
GBP

Assets
Designated as at fair value
through profit or loss on
initial recognition:
Investments
Loans and receivables:
Trade and other receivables
Cash and cash equivalents

49,332,354

49,332,354

4,185,122

8,502,341

102,853
-

102,853
12,687,463

Total assets

4,185,122

8,502,341

49,435,207

62,122,670

Accrued expenses
Broker creditors

111,494
873,045

111,494
873,045

Total liabilities

984,539

984,539

Liabilities
Financial liabilities measured
at amortised cost:

Total interest sensitivity

gap

4,185,122

28

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(d) Interest rate risk (continued)
As at 30 November 2014:
Fixed

Fixed

Less than 1
month 1-3 months
GBP
GBP

Greater
than 3
months
GBP

Floating

Noninterest
bearing
GBP

Total
GBP

1,883,169

31,462,103

33,345,272

25,611,367

2,496,653
-

32,970,936

7,359,569

25,611,367

1,883,169

33,958,756

66,316,208

Accrued expenses
Broker creditors

127,839
973,318

127,839
973,318

Total liabilities

1,101,157

1,101,157

Assets
Designated as at fair value
through profit or loss on
initial recognition:
Investments
Loans and receivables:
Trade and other receivables
Cash and cash equivalents

7,359,569

Total assets
Liabilities
Financial liabilities measured
at amortised cost:

Total interest sensitivity

gap

7,359,569

Interest rate sensitivity

If interest rates had been 25 basis points higher and all other variables were held constant, the
Companys net gain attributable to Shareholders for the period ended 31 May 2015 would have
increased by approximately 174,271 (2014: 108,003) or 0.29% (2014: 0.16%) of Net Assets due
to an increase in the amount of interest receivable on the interest bearing bank balances and
investments.
If interest rates had been 25 basis points lower and all other variables were held constant, the
Companys net gain attributable to Shareholders for the period ended 30 November 2014 would
have decreased by approximately 174,271 (2014: 108,003) or 0.29% (2013: 0.16%) of Net Assets
due to an decrease in the amount of interest receivable on the bank balances and interest bearing
investments.

29

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
13 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(e) Foreign exchange risk
The Company does not have significant foreign monetary assets and liabilities as at the end of
the period. Therefore, the Company has no significant direct exposure to foreign exchange risk.
A proportion of the Companys portfolio is invested in overseas securities and movements in
exchange rates can significantly affect their Sterling value. The Company does not normally
hedge against foreign currency movements affecting the value of the investment portfolio, but
takes account of this risk when making investment decisions.

(f) Capital management risk

The investment objective of the Company is to provide Shareholders with attractive long term
returns, expected to be in the form of capital, through a diversified portfolio.

As the Companys Shares are traded on the SFM, the Shares may trade at a discount to their
NAV per Share on occasion. However, in structuring the Company, the Directors have given
detailed consideration to the discount risk and how this may be managed.

The Company monitors capital on the basis of the carrying amount of equity as presented on
the face of the Statement of Financial Position.
There are no external requirements for the Company to maintain a minimum level of capital.
14 RELATED PARTY TRANSACTIONS
The Company is provided with investment advice by Damille Partners Limited (the "Service
Provider"), which owns 756,312 shares (1.10%) in Damille Investments II Limited. Brett Miller
and Rhys Davies are directors of both the Service Provider and the Company.
Under the Services Agreement, Damille Partners Limited is entitled to receive fees of 1.45%
per annum of the Company's NAV per annum on a monthly basis. During the period the
Company incurred 454,295 (May 2014: 533,513) of fees, of which 70,051 (Nov 2014:
75,708) was outstanding at the period end as shown in accrued expenses.

The Service Provider is also entitled to receive a performance fee (the 'Performance Fee'). The
Performance Fee will only be payable for each financial year where the Net Asset Value ('NAV')
of the Company is in excess of the Hurdle Rate and if applicable the High Watermark. The
Performace Fee payable will be an amount per Share equal to 20% of the amount by which the
NAV per Share exceeds the Hurdle Rate. For the purposes of this calculation, the NAV at the
end of the Performance Period will be adjusted by (a) adding back the amount of dividend or
other capital distribution paid during the relevant Performance Period; and (b) to remove any
increase or decrease in the NAV per Share resulting from the redemption of Shares at a
premium or discount to NAV per Share, pursuant to a Redemption Offer. At 31 May 2015, no
Performance Fee was payable by the Company (2014: nil).

30

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

for the period ended 31 May 2015
14 RELATED PARTY TRANSACTIONS (continued)
Nimrod Capital LLP is the Company's Corporate and Shareholder Advisory Agent and is
entitled to receive fees of 0.20% of the Company's Net Asset Value per annum. In addition,
Nimrod Capital LLP will receive 15% of the Performance Fee as calculated above. At 31 May
2015, of the total Performance Fee provided of nil (Nov 2014: nil). The minimum annual total
fee payable to Nimrod Capital LLP is 75,000. During the period the Company incurred 59,864
(May 2014: 71,515) of costs of which 17,671 (Nov 2014: 17,671) was outstanding at the
period end as shown in accrued expenses.
There have been no related party transactions with the directors during the period.
There is no one entity with ultimate control over the Company.
15 SUBSEQUENT EVENTS
There are no subsequent events.

31

Damille Investments II Limited

KEY ADVISERS AND CONTACT INFORMATION

Key Information
Exchange
Ticker
Listing Date
Fiscal Year End
Base Currency
ISIN
SEDOL
Country of Incorporation
Website

Specialist Fund Market of the LSE

DIL2
9 November 2011
30 November
GBP
GG00B7617Z91
B7617Z9
Guernsey Registration number 54192
www.damilleinv.com

Management and Administration

Registered Office

Secretary and Administrator

Damille Investments II Limited

PO Box 156
Frances House
Sir William Place
St Peter Port
Guernsey GY1 4EU

JTC (Guernsey) Limited

PO Box 156
Frances House
Sir William Place
St Peter Port
Guernsey GY1 4EU

Consultancy Service Provider

Registrar

Damille Partners Limited

Blenheim Trust (BVI) Limited
PO Box 3483
Road Town
Tortola
British Virgin Islands

Anson Registrars Limited

PO Box 426, Anson House
Havilland Street
St Peter Port
Guernsey GY1 3WX

Placing and Corporate and Shareholder Auditor

Advisory Agent
Nimrod Capital LLP
3 St Helens Place
London EC3A 6AB

Grant Thornton Limited

PO Box 313
Lefebvre House
Lefebvre Street
St Peter Port
Guernsey GY1 3TF

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