RNS Number:4746Y
Defined Capital Return Fund Ltd
15 June 2007
The Defined Capital Return Fund Limited
Preliminary announcement of the unaudited results for the period ended 30 April
2007
Chairman's statement
Incorporation
The Company is a closed-ended investment company incorporated in Jersey on 17
August 2004. Admission to the official list of the UK Listing Authority and
dealing in shares commenced on 1 November 2004. The Company has a fixed life
expiring on or about 30 October 2009.
Investment objective and policy
The investment objective of the Company is to provide ordinary Shareholders with
a defined capital payment per share of 136.49 pence ("Defined Capital Return")
at the winding-up date. This return will be contingent on the level of the FTSE
100 at the end of the life of the Company. Provided that the FTSE 100 on the
winding-up date is not below 85% per cent of its level on the start date of
4,615.40 ("Start Value"), Shareholders will receive the Defined Capital Return
on or soon after 2 November 2009.
The Company has and will continue throughout its life to be invested in a
portfolio of at least 6 medium term floating rate notes ("Bonds") which pay
interest gross. The interest received from these Bonds is used to meet ongoing
costs and to fund payments due under the FTSE Transaction which it has entered
into with UBS AG ("FTSE Transaction Counterparty"). Under the FTSE Transaction,
the Company swaps periodic amounts based on the interest return received by it
in respect of the Bonds with the FTSE Transaction Counterparty. In addition,
under the FTSE Transaction, the FTSE Transaction Counterparty is (provided that
the final FTSE level is not below the break-even level) obliged to pay an amount
which, together with the principal amounts payable on redemption of the Bonds,
is intended to provide the final capital entitlement. If however, the final FTSE
level is below the break-even level, no payment is due from the FTSE Transaction
Counterparty under the FTSE Transaction and, instead the Company is obliged to
pay an amount to the FTSE Transaction Counterparty, which amount is intended to
be funded from the principal amounts payable on redemption of the Bonds.
The final capital entitlement is only payable at the winding-up date. If at the
winding-up date the final FTSE level is at least equal to 85% of the Start Value
then the final capital entitlement will be equal to the Defined Capital Return.
If the final FTSE level is below 85 per cent of the Start Value, the final
capital entitlement will be reduced on a straight line basis from the Defined
Capital Return down to zero when the final FTSE level is less than or equal to
25 per cent of the Start Value.
As at 30 April 2007, the FTSE stood at 6,449.20 and the index cover was 1.643908
times, this representing the extent to which the FTSE was higher than the level
required for Defined Capital Return to be paid.
If the winding-up date was 30 April 2007, the accrued entitlement as at that
date would have been 116.78 pence per share.
The Defined Capital Return Fund Limited
Balance Sheet (Unaudited)
As at 30 April 2007
(Comparatives are stated for the year ended 31 October 2006)
2007 2006
# #
Assets
Non-current assets
Financial assets at fair value through the profit and loss 31,996,756 31,663,280
account
Prepayments 237,806 323,986
Prepayment of Directors fees 9,130 18,260
32,243,692 32,005,526
Current assets
Cash and cash equivalents 122,368 76,123
Other receivables 1,566 1,350
Prepayments 166,375 179,964
Prepayment of Directors fees 9,130 9,130
299,439 266,567
Total assets 32,543,131 32,272,093
Liabilities
Current liabilities
Other creditors and accruals - -
Non-current liabilities
Provisions 30,000 30,000
Liabilities (excluding net assets attributable to holders
of ordinary shares) 30,000 30,000
Net assets attributable to ordinary shareholders 32,513,131 32,242,093
Number of ordinary shares in issue 28,000,000 28,000,000
Net asset value per ordinary share 1.1612 1.1515
The Defined Capital Return Fund Limited
Income Statement (Unaudited)
For the period 1 November 2006 to 30 April 2007
(Comparatives are stated for the period 1 November 2005 to 30 April 2006)
2007 2006
# #
Revenue
Interest income 754,873 633,334
Gain on financial assets at fair value through the profit and loss
account
333,476 987,902
Total revenue 1,088,349 1,621,236
Expenditure
Management fee 55,540 54,926
Administration fees and expenses 15,849 15,674
Custodian fees 3,392 3,354
Directors fees 4,565 4,565
Audit fees 5,700 5,700
Interest on total return swap 694,911 574,687
General expenses 37,354 54,078
Total expenditure 817,311 712,984
Increase in net assets attributable to ordinary shareholders 271,038 908,252
There are zero earnings attributable to the management shares.
The Defined Capital Return Fund Limited
Statement of Changes in Net Assets Attributable to Ordinary Shareholders
(Unaudited)
For the period 1 November 2006 to 30 April 2007
2007
#
Balance at 1 November 2006 32,242,093
Increase in net assets attributable to ordinary shareholders 271,038
Net assets attributable to ordinary shareholders at 30 April 2007 32,513,131
For the year ended 31 October 2006
2006
#
Balance at 1 November 2005 30,310,635
Increase in net assets attributable to ordinary shareholders 1,931,458
Net assets attributable to ordinary shareholders at 31 October 2006 32,242,093
The Defined Capital Return Fund Limited
Cash Flow Statement (Unaudited)
For the period 1 November 2006 to 30 April 2007
(Comparatives are stated for the year ended 31 October 2006)
2007 2006
# #
Cash flows from operating activities
Increase in net assets attributable to ordinary shareholders 271,038 1,931,458
Adjustments for:
Interest income (754,873) (1,305,057)
Interest payable
Gain on financial assets at fair value through profit or loss (333,476) (2,052,286)
Operating result before working capital changes (817,311) (1,425,885)
Decrease in trade and other receivables 109,146 168,252
Decrease in trade and other payables - (136)
(708,165) (1,257,769)
Interest income 752,711 1,303,103
Deposit interest received 1,699 1,707
Net cash generated from operations 46,245 47,041
Cash flows from investing activities
Payment for purchases of investments - -
Proceeds from derivative financial instruments - -
Proceeds from sale of investments - -
Net cash used in investing activities - -
Cash flows from financing activities
Amounts received on creation of shares - -
Net cash from financing activities - -
Net increase in cash and cash equivalents 46,245 47,041
Cash and cash equivalents at beginning of period 76,123 29,082
Cash and cash equivalents at end of period 122,368 76,123
Cash and cash equivalents made up of:
Cash at bank 122,368 76,123
The unaudited interim report will be sent to all registered shareholders and
copies may be obtained from the Registered Office, Standard Bank House, 47-49 La
Motte Street, St Helier, Jersey. JE4 8XR
By order of the Board
Standard Bank Fund Administration Jersey Limited, Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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