TIDMRIG
For release on Wednesday 19 June 2013
CQS Rig Finance Fund Limited
(the "Company")
Unaudited Half-Yearly Report and Condensed Financial Statements
The Company announces its unaudited half-yearly results for the six
months ended 31 March 2013. A full copy of the unaudited half-yearly
report will from today be available on the Company's website:
www.cqsrigfinance.com and is set out below.
The Company also announces that an interim dividend of 0.87 pence per
Ordinary Share will be paid on 7 August 2013 to shareholders on the
register as at close of business on 12 July 2013 with a corresponding
ex-divided date of 10 July 2013. Full details of the Company's dividend
policy are included in the Chairman's Statement in the half-yearly
report.
Enquiries:
Alastair Moreton
NOMAD and Broker
Westhouse Securities Limited
Telephone 020 7601 6118
Secretary
Kleinwort Benson (Channel Islands) Fund Services Limited
Telephone 01481 710607
CQS RIG FINANCE FUND LIMITED
HALF YEARLY REPORT AND CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE SIX MONTHS ENDED 31 MARCH 2013
Registered Number: 45805
Page
Management and Administration 1
Chairman's Statement 2
Investing Policy 4
Investment Manager's Report 5
Financial Statements
- Unaudited Condensed Statement of Comprehensive Income 8
- Unaudited Condensed Statement of Financial Position 9
- Unaudited Condensed Statement of Changes in Equity 10
- Unaudited Condensed Statement of Cash Flows 11
- Notes to the Unaudited Condensed Financial Statements 12-24
Directors Registered Office
Michael Salter (Chairman) (UK resident) Dorey Court
Bruce Appelbaum (US resident) Admiral Park
Trevor Ash (Guernsey resident) St. Peter Port
Jonathan Gamble (Guernsey resident) Guernsey GY1 2HT
Gavin Strachan (UK resident)
Investment Manager Nominated Adviser and Broker
CQS Cayman Limited Partnership Westhouse Securities Limited
PO Box 242 1 Angel Court
45 Market Street London EC2R 7HJ
Gardenia Court England
Camana Bay
Grand Cayman KY1-1104
Cayman Islands
Prime Broker and Custodian Registrar, Transfer Agent & Paying Agent
Credit Suisse Securities (Europe) Limited Capita Registrars (Guernsey) Limited
One Cabot Square 2(nd) Floor
London E14 4QJ No. 1 Le Truchot
England St Peter Port
Guernsey GY1 4AE
Independent Auditor
Ernst & Young LLP
2(nd) Floor
Royal Chambers
St Julian's Avenue
St Peter Port
Guernsey GY1 4AF
Investment Adviser
CQS (UK) LLP
5th Floor
33 Grosvenor Place
London SW1X 7BL
England
Administrator and Secretary
Kleinwort Benson (Channel Islands) Fund Services Limited
Dorey Court
Admiral Park
St. Peter Port
Guernsey GY1 2HT
Sub-Administrator
State Street Fund Services (Ireland) Limited
78 Sir John Rogerson's Quay
Dublin 2
Ireland
Introduction
I present the Company's interim report for the six months from 1 October
2012 to 31 March 2013.
I am encouraged with the progress that the Company has made during the
interim period, including the investment performance and the payment of
regular dividends.
Investment Performance
The Company's performance for the period under review was positive as
markets broadly rallied, despite ongoing concerns over weak global
economic growth.
The Company's Net Asset Value ("NAV") increased from 34.72 pence per
Ordinary Share on 30 September 2012 to 35.91 pence per ordinary share on
31 March 2013. The total return to shareholders (appreciation in NAV
plus dividend income net of tax) over the interim period was 5.42%.
The price per ordinary share ended the period higher, with a closing
price of 30.875 pence on 30 September 2012 to a closing price of 34.250
pence on 31 March 2013. This represents a return of 10.93% which
includes the 0.69 pence dividend that went ex-dividend on 13 March and
was paid on 10 April 2013. During the period under review, the ordinary
share's discount to NAV fell from 11% at the beginning of the period to
5% at the end of the period.
Dividends
Further to the Company's announcement to pay regular cash distributions
in the form of a semi-annual dividend payment and to target dividends
equivalent to an annual yield of 5 per cent of Net Asset Value per
Ordinary Share at the start of each financial year, the Board proposed a
final dividend of 0.69 pence per Ordinary Share in respect of the
financial year ended 30 September 2012. The final dividend was approved
at the Annual General meeting on 6 March 2013 and paid to shareholders
of record at 15 March 2013 on 10 April 2013. On 19 June 2013, the
Company declared an interim dividend of 0.87 pence per Ordinary Share in
respect of the financial year ending 30 September 2013. The interim
dividend will be payable on 7 August 2013 to shareholders on the
register on 12 July 2013.
Mandatory Cash Offer for CQS RIG Finance Fund Limited
On 19 October 2012, CQS Cayman LP, acting as the investment manager on
behalf of CQS Directional Opportunities Master Fund Limited, together
with the other members of the CQS Group (the concert party), announced a
mandatory offer for the remaining shares in the Company which were not
already owned. The full terms and conditions were set out in the Offer
Document issued by CQS Cayman on 23 October 2012.
The final level of acceptances brought the concert party to 65.73 per
cent.
Continuation Vote
The financial statements are prepared on a going concern basis, which
contemplates the continuation of operations and the realisation of
assets and settlement of liabilities occurring in the ordinary course of
business unless the Directors intend to liquidate the Company. The
Directors consider the Company has adequate financial resources and
believe that the Company is well placed to manage its business risks
successfully and to continue in operational existence for the
foreseeable future.
In accordance with the Company's Articles of Association an ordinary
resolution is required to be voted on by shareholders at the next annual
general meeting to be held in the first quarter of 2014, proposing that
the Company should continue for a further five year period
("continuation vote"). If the continuation vote is not passed, the
Directors shall arrange the Company's assets to be realised and for the
Company subsequently to be wound-up.
Continuation Vote (continued)
The Directors have been in communication with shareholders, including
the CQS Group Entities (refer notes 12 and 16), with regards to this
continuation vote. To date, as the continuation vote is almost a year
away, shareholders have not confirmed their intentions. However no
shareholders have as yet indicated they will vote against the
continuation of the Company. The Directors believe that although there
is a material uncertainty on the future outcome of the continuation vote,
it is still appropriate to prepare the financial statements on the going
concern basis.
Outlook
While sentiment for future energy demand and oil price levels remains
robust, there are ongoing risks from the growing US Shale oil production,
global geopolitical factors and economic and fiscal uncertainty in
Europe and the US.
In addition, offshore infrastructure remains in demand and we are
encouraged by the elevated day-rates payable for ultra-deepwater
drilling units while acknowledging that day-rates appear to be reaching
a plateau.
Although vigilance is required in the selection of high yield
investments given the buoyant markets, we continue to see interesting
new deals and new areas of growth for offshore drilling, such as West
Africa, driving demand for drilling and related assets.
I look forward to reporting to you again in the Annual Financial Report
for the year ended 30 September 2013.
Michael Salter
Chairman
June 2013
The Company's investing policy in the period under review was as
follows:
The Company's investment objective is to provide Shareholders with an
attractive total return, through a combination of capital appreciation
and dividends.
The Investment Adviser seeks to achieve the investment objective of the
Company by sourcing and trading a portfolio comprising predominantly
debt instruments. The Investment Adviser seeks to use fundamental credit
and industry analysis to identify instruments expected to provide
attractive risk-adjusted returns which meet the investment objective of
the Company. Such instruments are expected to be issued primarily to
finance companies involved in the construction, modification and
operation of offshore rigs and related infrastructure equipment, and
companies involved in the development and operation of assets used in
the offshore and/or onshore exploration, production and distribution of
oil, natural gas and other resources. Investments in adjacent sectors
such as shipping and transportation may be included at the discretion of
the Investment Adviser.
It is expected that the Company's portfolio will continue to be
passively managed, although the Investment Adviser may elect to become
actively involved in workout situations should they arise. It is
expected that some investments will be held through to maturity (or
earlier redemption/repayment by the issuer/borrower), while others may
be held for shorter terms to capture mispricing of risk. The Investment
Adviser may trade investments depending on the prevailing market
conditions at any time.
The Company seeks, on a global basis, to capture on its investments
attractive risk-adjusted yields and potential capital appreciation
arising from possible corporate activity, including but not limited to,
refinancing, industry consolidation and workouts, and from equity
appreciation for securities exhibiting equity characteristics. The
Company is permitted to borrow to enhance the returns of the portfolio.
The gearing of the portfolio is not expected to exceed 30% of Net Asset
Value, and from time to time the portfolio may be constructed with
little or no gearing. The Company may retain amounts in cash, or cash
equivalents, pending reinvestment if this is considered appropriate to
the achievement of its investment objective.
The Company may construct the portfolio using a range of securities,
derivatives and other agreements including but not limited to positions
in secured, unsecured and subordinated bonds, including convertible
bonds, that may be fixed or floating rate securities, payment-in-kind
bonds, senior, second lien and mezzanine loans, equities and equity
warrants. The Company may trade both rated and unrated debt instruments
although it expects, in most cases, that such instruments will not be
rated by a recognised rating agency. Exposure to securities may be taken
directly or synthetically through the use of repurchase agreements,
total return swaps and other derivatives referencing the securities
selected for the portfolio. Interest rate and foreign exchange
transactions may be effected using swaps, forwards, futures and options
and other derivatives. The Company may trade listed and unlisted
securities, and may execute derivative transactions on exchange or over
the counter.
Dividend Policy
The Company's dividend policy is to make regular cash distributions in
the form of semi-annual dividend payments and to target dividends
equivalent to an annual yield of 5 per cent of the Net Asset Value per
share at the start of each financial year.
Oil Markets
The price of Brent Crude oil commenced and ended the period at
approximately $109 per barrel, and traded in a fairly narrow range
between $116 and $104. Despite a recent fall in the price of Brent Crude,
analysts have been expressing a balanced view with respect to the
outlook for the coming year.
In a recent research report, Pareto Securities(1) believes "oil prices
will be at least $120 per barrel over the next few years leaving room
for E&P spending to grow 10% p.a. Planning prices approaching USD
100/bbl and average 2013 budgets up 9% supports this estimate short
term". This view is supported by research from SEB Enskilda(2) citing an
anticipated 10-12% growth in exploration and production (E&P) spending
for 2013 based on 42 companies' official E&P budgets.
Barclays notes in its Global Energy outlook March 2013(3) that it
anticipates "crude prices to remain range bound, with below-GDP demand
growth balanced by declining non-OPEC output. This has been the trend of
the past few years and we expect it to continue..Oil and gas capital
expenditure continues to rise faster than production due to field
declines; hence, we again recommend oil service companies across credit
and equities"
On a more cautious note, there have recently been reports of delays in
large E&P programmes as industry costs increase. According to a Reuters
report dated 20 April 2013(4) , "BP is reviewing its biggest new oil
project in the Gulf of Mexico, due to rising development costs across
the industry, and could delay the $10 billion scheme." Similar cost
concerns have caused Woodside Petroleum to rethink its $45bn Browse
liquefied natural gas project in Western Australia.
Financial Markets
Despite a number of negative currents, global markets mostly rallied
over the first six months of the Company's financial year. Going into
the 2012 calendar year-end, the US fiscal cliff was the dominant focus
for investors. As the 1 January 2013 deadline approached, market
performance was flat to down on a lack of concrete action to stave off
the anticipated $600bn worth of fiscal tightening, a combination of
expiring tax reductions and government spending cuts. The year started
on a buoyant note as the last-minute agreement to tackle the US fiscal
cliff prompted a relief rally across world markets. Decent
fourth-quarter earnings and commitments from central banks to maintain
loose monetary policy helped to support gains in the developed markets.
However, ongoing concerns over weak global economic growth, continued US
federal budget wrangling and European political uncertainty, together
with the financial crisis in Cyprus and mixed macroeconomic data
globally, weighed on the markets leading to varied market performance
during February and March 2013. The MSCI World Index rose 9.4% net in US
dollars, while the S&P 500 posted an 8.2% rise over the period and the
Eurostoxx advanced 6.5%. Credit markets were also stronger with the
European iTraxx Crossover (S18) tightening to 420bps and iTraxx Main
(S18) to 116.5bps.
Financing Markets
European high yield issuance was particularly strong over the past six
months, with a record EUR39.2bn of new issuance across all currencies.
According to Barclays(5) , this was a 65% increase versus the same
period last year which saw only EUR23.7bn of issuance. Persistent low
interest rates and robust investor demand for yield fuelled the market,
and drove credit spreads tighter over the period. The Company
participated in a number of new issues but avoided several opportunistic
deals as the buoyant markets enticed less credit worthy companies to
issue debt.
The Portfolio
As at 31 March 2013, the portfolio consisted of exposure to various
sub-sectors of the oil industry.
The Portfolio (continued)
Performance over the period was positively impacted by a general
appreciation in the value of a number of the Company's investments and
by carry. The high coupon Rubicon Offshore bonds contributed most to the
returns, while smaller losses were recorded on OGX and Songa Offshore
bonds, positions which were exited during the period. The portfolio saw
significant cash inflows in the period as several bonds were redeemed at
a premium, in particular those issued by Transocean Norway Drilling AS
and cash amortisations were paid on other positions. The proceeds were
reinvested in new issuance or in the secondary market.
Analysed by face value, ultra-deepwater drilling rigs are the largest
category accounting for 51.4% of assets, reduced from 57.9% from the end
of September 2012. Demand for these rigs continues to be strong with
brokers reporting several recent fixtures in the month of April. In its
research comments dated 30 April 2013, Pareto notes that "...four
additional newbuilds [were] awarded contracts last week. More contracts
are expected to materialise near-term."(6) Day-rates for these units
remain at high levels.
Accommodation vessels made up just below 9% of the portfolio, broadly
unchanged from the last financial year-end. As the number of offshore
installations grows, so does the need for workforce accommodation which
offer complete facilities for several hundred people and are positioned
alongside the host installation.
The portfolio's exposure to support-service vessels increased from 5.7%
to 10.0%, driven by the purchase of Sea Trucks Group bonds at new issue
and Subsea 7 SA convertible bonds in the secondary market.
The remaining part of the portfolio's assets was invested in related
areas such as (exploration, seismic data collection vessels, and
offshore construction vessels.)
Exposure by Collateral Type (% Long Market Value)
UDW Driller 51.40%
Service Vessel 10.00%
Accommodation Vessel 8.80%
FPSO 7.50%
Seismic Vessel 7.50%
E&P 6.00%
Other 3.60%
Transport 3.10%
Well Intervention 2.10%
Total 100.00%
Seniority Analysis (% Long Market Value)
Unsecured 35.20%
1st Lien 33.60%
2nd Lien 21.30%
Convertible 9.50%
Equity 0.40%
Total 100.00%
Financing
The Company continues to operate a Prime Brokerage Agreement with Credit
Suisse Securities (Europe) Limited that allows the Company to borrow in
one or more currencies against assets of the Company. The Company held a
positive net cash balance at the end of the period.
Outlook
We believe caution is warranted in the medium-term as continued concerns
over the US fiscal situation, political and economic uncertainty in
Europe and geopolitical risks may point to unsettled markets.
Oil markets specifically may be pressured by weaker refinery margins
together with increasing North American production and OECD inventories.
We are however encouraged by further year-on-year budgeted increases in
capital expenditure by the oil companies and analysts' estimates of
elevated oil prices despite the risk factors.
With the elevated levels of high yield new issuance, and supply from
lower-credit quality companies, an ongoing challenge will be to select
the most attractive deals on a risk/reward basis.
All market data sourced from Bloomberg and CQS Cayman Limited
Partnership.
(1) Source: Pareto Securities, "Oil Services - Oil price outlook and E&P
spending growth support further sector upside", 11 February 2013.
(2) Source: SEB Enskilda, "E&P spending budgets update", 7 January 2013
(3) Source: Barclays, "Global Energy Outlook: Opportunities in a
range-bound oil market", 27 March 2013
(4) Source:
http://uk.reuters.com/article/2013/04/20/business-us-bp-mad-dog-idUKBRE9
3J07220130420
(5) Source: Barclays, "European High Yield Benchmark Index Total Returns,
March 2013", 2 April 2013
(6) Source: Pareto Securities, "Rig Weekly" 30 April 2013.
CQS Cayman Limited Partnership
June 2013
Six months ended Six months ended
31 March 2013 31 March 2012
GBP GBP
Notes Unaudited Unaudited
Operating income 4 2,410,296 6,780,042
Operating expenses
Other operating expenses 5 (568,280) (486,520)
Finance costs (4,955) -
Total operating expenses (573,235) (486,520)
Net profit 1,837,061 6,293,522
Total comprehensive income for the period 1,837,061 6,293,522
Earnings per Ordinary Share
Basic and Diluted 6 1.89p 6.46p
All items in the above statement are derived from continuing operations.
All income is attributable to the ordinary shareholders of the Company.
The accompanying notes form an integral part of the unaudited condensed
financial statements.
31 March 30 September 31 March
2013 2012 2012
Notes GBP GBP GBP
Assets Unaudited Audited Unaudited
Non-current assets
Financial instruments designated at fair value through
profit or loss 7 30,441,651 32,089,279 28,523,467
Current assets
Financial instruments designated at fair value through
profit or loss 7 4,358,078 680,473 1,823,108
Cash and cash equivalents 9 2,163,882 1,448,824 3,832,678
Derivative financial assets 141,182 5,945 108,714
Other assets 750,296 674,619 578,939
7,413,438 2,809,861 6,343,439
Total assets 37,855,089 34,899,140 34,866,906
Equity and liabilities
Equity
Other reserve 87,543,811 88,215,940 88,888,069
Accumulated losses (52,561,255) (54,398,316) (56,302,621)
34,982,556 33,817,624 32,585,448
Current liabilities
Financial instruments designated at fair value through
profit or loss 7 1,583,748 505,330 966,002
Payable for securities purchased 435,583 248,328 540,580
Derivative financial liabilities 56,229 182,161 65,706
Dividend payable 672,129 - 584,460
Other liabilities and payables 10 124,844 145,697 124,710
Total liabilities 2,872,533 1,081,516 2,281,458
Total equity and liabilities 37,855,089 34,899,140 34,866,906
Net Asset Value per Share 35.91p 34.72p 33.45p
The accompanying notes form an integral part of the unaudited condensed
financial statements.
Other Accumulated
Reserve Losses Total
GBP GBP GBP
Unaudited Unaudited Unaudited
Balance at 1 October 2012 88,215,940 (54,398,316) 33,817,624
Total comprehensive income for the period 1,837,061 1,837,061
Total recognised income and expense plus equity
brought forward 88,215,940 (52,561,255) 35,654,685
Dividends to shareholders (672,129) - (672,129)
Balance at 31 March 2013 87,543,811 (52,561,255) 34,982,556
For the six months ended 31 March 2012
Other Accumulated
Reserve Losses Total
GBP GBP GBP
Unaudited Unaudited Unaudited
Balance at 1 October 2011 89,472,529 (62,596,143) 26,876,386
Total comprehensive income for the period - 6,293,522 6,293,522
Total recognised income and expense plus equity
brought forward 89,472,529 (56,302,621) 33,169,908
Dividends to shareholders (584,460) - (584,460)
Balance at 31 March 2012 88,888,069 (56,302,621) 32,585,448
The accompanying notes form an integral part of the unaudited condensed
financial statements.
Six
months
ended 31 Six months
March ended 31
2013 March 2012
GBP GBP
Unaudited Unaudited
Net profit 1,837,061 6,293,522
Adjustments to reconcile total comprehensive income
for the period to net cash from operating activities:
Effect of exchange rate changes on cash and cash
equivalents 4,518 32,461
Net change in operating assets and liabilities
Movement in other assets (75,677) (520,569)
Movement in other liabilities and payables (19,687) (28,385)
Movement in interest expense payable (1,167) (9,732)
Movement in derivative financial assets (135,237) 72,347
Movement in derivative financial liabilities (125,932) (20,748)
Movement in financial instruments designated as at
fair value through profit or loss (764,303) (4,279,939)
Net cash flows from operating activities 719,576 1,538,957
Financing Activities:
Dividends paid to shareholders - (535,755)
Net cash outflows from financing activities - (535,755)
Net increase in cash and cash equivalents 719,576 1,003,202
Effect of exchange rate changes on cash and cash
equivalents (4,518) (32,461)
Cash and cash equivalents at start of period 1,448,824 2,861,937
Cash and cash equivalents at end of period 2,163,882 3,832,678
Interest received 1,395,311 2,215,507
Interest paid (6,122) (39,260)
The accompanying notes form an integral part of the unaudited condensed
financial statements.
1. General information
CQS Rig Finance Fund Limited (the "Company") was registered on 8
November 2006 with registered number 45805 and is domiciled and
incorporated in Guernsey, Channel Islands. The Company is a closed-ended
investment company with limited liability formed under The Companies
(Guernsey) Law, 2008, as amended and its Ordinary Shares are listed on
the Channel Island Stock Exchange ("CISX") and traded on the Alternative
Investment Market ("AIM"), a market operated by the London Stock
Exchange plc.
The Company does not have a fixed life but, under the Articles of
Association, shareholders will be given the opportunity to vote on the
continuation of the Company at the Annual General Meeting to be held in
2014.
The Company's investment objective is to provide shareholders with an
attractive total return through a combination of capital appreciation
and dividends.
The Investment Adviser seeks to achieve the investment objective of the
Company by sourcing and trading a portfolio comprising predominantly
debt instruments. The Investment Adviser seeks to use fundamental credit
and industry analysis to identify instruments expected to provide
attractive risk-adjusted returns which meet the investment objective of
the Company. Such instruments are expected to be issued primarily to
finance companies involved in the construction, modification and
operation of offshore rigs and related infrastructure equipment, and
companies involved in the development and operation of assets used in
the offshore and/or onshore exploration, production and distribution of
oil, natural gas and other resources. Investments in adjacent sectors
such as shipping and transportation may be included at the discretion of
the Investment Adviser.
It is expected that the portfolio will continue to be passively managed,
although the Investment Adviser may elect to become actively involved in
workout situations should they arise. It is expected that some
investments will be held through to maturity (or earlier
redemption/repayment by the issuer/borrower), while others may be held
for shorter terms to capture mispricing of risk. The Investment Adviser
may trade investments depending on the prevailing market conditions at
any time.
2. Significant accounting policies
Statement of compliance
These condensed interim financial statements for the six months ended 31
March 2013 have been prepared in accordance with International
Accounting Standards (IAS) 34, "Interim Financial Reporting". The
condensed interim financial statements do not include all the
information and disclosure required in the annual financial statements
and should be read in conjunction with the audited financial statements
of the Company for the year ended 30 September 2012, which have been
prepared in accordance with International Financial Reporting Standards,
as adopted by the European Union ("IFRS").
The audited financial statements of the Company for the year ended 30
September 2012 are available upon request from the Company's registered
office at Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT and
are also available from the Company's website, www.cqsrigfinance.com.
Basis of preparation
The financial statements of the Company are prepared on a historical
cost or amortised cost basis except that the
following assets and liabilities are stated at their fair value:
financial instruments designated as fair value through
profit or loss upon initial recognition and derivative financial assets
and liabilities.
The accounting policies applied by the Company in these condensed
unaudited interim financial statements are consistent with those applied
by the Company in its financial statements as at and for the year ended
30 September 2012.
The functional currency of the Company is also considered to be GBP
because that is the currency of the primary economic environment in
which the Company has raised capital and dividends paid to shareholders.
2. Significant accounting policies (continued)
Basis of preparation (continued)
Certain comparative figures have been restated to be consistent with the
presentation adopted in the previous audited financial statements.
Going Concern
The financial statements are prepared on a going concern basis, which
contemplates the continuation of operations and the realisation of
assets and settlement of liabilities occurring in the ordinary course of
business unless the Directors intend to liquidate the Company. The
Directors consider the Company has adequate financial resources and
believe that the Company is well placed to manage its business risks
successfully and to continue in operational existence for the
foreseeable future.
In accordance with the Company's Articles of Association an ordinary
resolution is required to be voted on by shareholders at the next annual
general meeting to be held in the first quarter of 2014, proposing that
the Company should continue for a further five year period
("continuation vote"). If the continuation vote is not passed, the
Directors shall arrange the Company's assets to be realised and for the
Company subsequently to be wound-up.
The Directors have been in communication with shareholders, including
the CQS Group Entities (refer notes 12 and 16), with regards to this
continuation vote. To date, as the continuation vote is almost a year
away, shareholders have not confirmed their intentions. However no
shareholders have as yet indicated they will vote against the
continuation of the Company. The Directors believe that although there
is a material uncertainty on the future outcome of the continuation vote,
it is still appropriate to prepare the financial statements on the going
concern basis.
Standards and amendments to existing standards adopted during the period
IAS 1, "Presentation of Financial Statements" (Amendment) requires
entities to group items presented in Other Comprehensive Income based on
whether they are potentially reclassifiable to profit or loss
subsequently and tax associated with items presented before tax to be
shown separately for each of the two groups. The amendment is applicable
to annual periods beginning on or after 1 July 2012 and did not have an
impact on the disclosures of the financial statements.
Standards, interpretations and amendments issued but not yet effective
IFRS 9 "Financial Instruments" issued in November 2009 (IFRS 9(2009))
will change the classification of financial assets. The standard is not
expected to have an impact on the measurement basis of the financial
assets since the majority of the Company's financial assets are measured
at fair value through profit or loss. IFRS 9 is effective for annual
periods beginning on or after 1 January 2015 but is not yet approved by
the European Union. Earlier application is permitted. The Company does
not plan to adopt this standard early.
In May 2011, the IASB issued IFRS 10, "Consolidated Financial
Statements" which is effective for annual periods beginning on or after
1 January 2013. The standard establishes principles for the presentation
and preparation of consolidated financial statements when an entity
controls one or more other entities. IFRS 10 replaces the consolidation
requirements in SIC-12 Consolidation - Special Purpose Entities and IAS
27 Consolidated and Separate Financial Statements. The Company is
currently assessing the impact of this standard and does not plan to
adopt it early.
IFRS 10 (amendment) as issued provides an exception to consolidation
requirements for entities that meet the definition of an investment
entity. The exception to consolidation requires investment entities to
account for subsidiaries at fair value through profit or loss in
accordance with IFRS 9 Financial Instruments. The amendment is effective
for annual periods beginning on or before 1 January 2014.
2. Significant accounting policies (continued)
Standards, interpretations and amendments issued but not yet effective
(continued)
In May 2011, the IASB issued IFRS 11, "Joint Arrangements" which is
effective for annual periods beginning on or after 1 January 2013. The
standard establishes principles for financial reporting by parties to a
joint arrangement. The Company is currently assessing the impact of this
standard and does not plan to adopt it early.
In May 2011, the IASB issued IFRS 12, "Disclosure of Interests" in Other
Entities which is effective for annual periods beginning on or after 1
January 2013. The standard requires entities to disclose the nature,
risk, and financial effects of its interests in other entities. The
Company is currently assessing the impact of this standard and does not
plan to adopt it early.
In May 2011, the IASB issued IFRS 13, "Fair Value Measurement" which is
effective for annual periods beginning on or after 1 January 2013. The
standard defines fair value as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (i.e. an exit
price). The Company is currently assessing the impact of this standard
and does not plan to adopt it early.
IFRS 10 "Consolidated Financial Statements, IFRS 11, "Joint
Arrangements", IFRS 12, "Disclosure of interests in other entities" and
IFRS 13, "Fair Value Measurement" were endorsed by the European Union on
11 December 2012.
There are no other standards, interpretations or amendments to existing
standards that are effective that would be expected to have a
significant impact on the Company.
Significant accounting judgments and estimates
The preparation of the Company's financial statements in conformity with
IFRS as adopted by the European Union requires management to make
judgments, estimates and assumptions that affect the amounts recognised
in the financial statements. However, uncertainty about these
assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amount of the asset or liability
affected in the future.
Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or a
liability settled, between knowledgeable, willing parties in an arm's
length transaction. The fair values for financial instruments traded in
active markets at the reporting date are based on their quoted bid price
for assets and quoted offer price for liabilities or third party broker
price quotations without any deduction for transaction costs. Where
possible the Company receives at least three broker quotes for each
financial instrument held. The preferred broker quote is compared to the
other two broker quotes for consistency. If the broker quotes are not
consistent, the Company will adjust the valuation accordingly. In some
cases only a single broker quote is available. When this situation
arises, the Investment Manager reviews the prices independently received
as single broker quotes and ensures that they are in line with
expectations.
3. Segmental Reporting
IFRS 8 'Operating Segments' requires a 'management approach', under
which segment information is presented on the same basis as that used
for internal reporting purposes. Operating segments are reported in a
manner consistent with the internal reporting used by the chief
operating decision maker. The chief operating decision maker is
responsible for allocating resources and assessing the performance of
the operating segments.
The Board of Directors is charged with the overall governance of the
Company in accordance with the Company's Admission Document and the
Company's Memorandum and Articles of Association. The Board has
appointed CQS Cayman Limited Partnership as the Investment Manager. The
Board of Directors and CQS Cayman Limited Partnership are considered the
Chief Operating Decision Maker ("CODM") for the purposes of IFRS 8.
CQS Cayman Limited Partnership is responsible for decisions in relation
to both asset allocation, asset selection and any investment adviser
delegation. CQS Cayman Limited Partnership has been given authority to
act on behalf of the Company, including the authority to purchase and
sell securities and other investments on behalf of
3. Segmental Reporting (continued)
the Company and to carry out other actions as appropriate to give effect
thereto. Any changes to the investment strategy outside of the Company's
Admission Document must be approved by the Board and then the Company's
shareholders in accordance with the terms of the Admission Document, the
Company's Articles and the AIM Rules for Companies.
The Company sources and trades in a portfolio of secured debt
instruments which are expected to be primarily issued to finance the
construction, modification and/or refurbishment of rigs and other
infrastructure and/or equipment used for the exploration of oil and
natural gas. The Company operates a single operating segment under IFRS
8 with all investment cash and investment holdings being managed at a
Company level. CQS Cayman Limited Partnership allocates decisions based
on a single integrated investment strategy and the Company's performance
is evaluated on an overall basis. Investment cash is allocated to CQS
Cayman Limited Partnership who has discretionary authority to invest the
Company's assets and is responsible for all investment decisions made on
behalf of the Company, subject to the control and policies of the Board
of Directors of the Company. CQS Cayman Limited Partnership has
appointed an investment adviser, CQS (UK) LLP. The Investment Adviser is
responsible for the management of and/or providing investment advice on
the portfolio and also assists the Investment Manager with related
ancillary services. The internal reporting provided to CQS Cayman
Limited Partnership for the Company's assets and liabilities and
performance is prepared on a consistent basis with the measurement and
recognition principles of IFRS. There were no changes in the reportable
segments during the period ended 31 March 2013 or 31 March 2012.
4. Operating income
Six months ended Six months ended
31 March 2013 31 March 2012
GBP GBP
Unaudited Unaudited
Interest income from financial instruments designated
at fair value through profit or loss 1,457,823 2,346,214
Realised foreign exchange (loss)/gain (2,226,635) 1,029,579
Realised (loss)/gain on financial instruments at fair
value through profit and loss (641,473) 1,407,165
Realised gain on derivative financial assets and liabilities 49,338 -
Movement in unrealised gain on financial instruments
at fair value through profit or loss 3,488,187 2,081,149
Movement in unrealised gain/(loss) on forward contracts 261,467 (70,605)
Movement in unrealised (loss)/gain on derivative financial
assets and liabilities (298) 19,001
Movement in unrealised foreign exchange gain/(loss) 21,887 (32,461)
Total operating income 2,410,296 6,780,042
5. Other operating expenses
Six months ended Six months ended
31 March 2013 31 March 2012
GBP GBP
Notes Unaudited Unaudited
Investment management and
administration fees
Investment management and
performance fee 12 (259,219) (234,321)
Administration fee 12 (81,562) (75,001)
Other operating expenses
Audit and accounting fees (18,390) (18,750)
Directors' fees (43,750) (43,750)
Other expenses (165,359) (114,698)
Total other operating expenses (568,280) (486,520)
6. Earnings per share
31 March 31 March
2013 2012
GBP GBP
Unaudited Unaudited
The calculation of the basic and diluted earnings
per share is based on the following data:
Earnings for the purposes of basic and diluted earnings
per share being net profit attributable to equity
holders 1,837,061 6,293,522
Weighted average number of Ordinary Shares for the
purposes of basic and diluted earnings per share 97,410,000 97,410,000
7. Financial instruments at fair value through profit or
loss
31 March 2013 30 September 2012 31 March 2012
GBP GBP GBP
Unaudited Audited Unaudited
Cost of financial instruments
at start of period 48,098,374 58,517,983 58,517,983
Purchase of financial
instruments 21,746,093 42,324,228 27,707,641
Sales proceeds on disposal of
financial instruments (23,641,248) (38,088,822) (25,875,477)
Realised (loss)/gain on sale
of financial instruments (641,473) (14,655,015) 1,407,165
Cost of financial instruments
at end of period 45,561,746 48,098,374 61,757,312
Unrealised loss on financial
instruments (12,345,765) (15,833,952) (32,376,739)
Financial instruments at end
of period 33,215,981 32,264,422 29,380,573
Split as follows:
Non-current assets 30,441,651 32,089,279 28,523,467
Current assets 4,358,078 680,473 1,823,108
Current liabilities (1,583,748) (505,330) (966,002)
Financial instruments at end of period 33,215,981 32,264,422 29,380,573
8. Fair value hierarchy
The amendment to IFRS 7, "Financial Instruments: Disclosures", requires
disclosures surrounding the level in the fair value hierarchy in which
fair value measurements are categorised for financial instruments
measured in the Statement of Financial Position. It requires the Company
to classify fair value measurements using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements.
The financial instruments are analysed between those whose fair value is
based on:
-- Level 1 - Quoted market price in an active market for an identical
instrument.
-- Level 2 - Valuation techniques based on observable inputs. This
category includes instruments valued using: quoted market prices in
active markets for similar instruments; quoted prices for similar
instruments in markets that are considered less than active; or other
valuation techniques where all significant inputs are directly or
indirectly observable from market data.
-- Level 3 - Valuation techniques using significant unobservable inputs.
This category includes all instruments where the valuation technique
includes inputs not based on observable data and the unobservable inputs
could have a significant impact on the instrument's valuation. This
category includes instruments that are valued based on quoted prices for
similar instruments where significant unobservable adjustments or
assumptions are required to reflect differences between the instruments.
8. Fair value hierarchy (continued)
The level in the fair value hierarchy within which the fair value
measurement is categorised in its entirety is determined on the basis of
the lowest level input that is significant to the fair value measurement
in its entirety. For this purpose, the significance of an input is
assessed against the fair value measurement in its entirety. If a fair
value measurement uses observable inputs that require significant
adjustment based on unobservable inputs, that measurement is a Level 3
measurement. Assessing the significance of a particular input to the
fair value measurement in its entirety requires judgement, considering
factors specific to the asset or liability.
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Company considers observable data to be
that market data that is readily available, regularly distributed or
updated, reliable and verifiable, not proprietary and provided by
independent sources that are actively involved in the relevant market.
Although the financial instruments with single broker quotes have inputs
into the price supplied by the brokers that are observable, for example,
rate yield, industry classification and credit rating, they are
classified as Level 3 holdings because the actual price may differ to
the broker estimates. The Investment Manager reviews the prices
independently received as single broker quotes and ensures that they are
in line with expectations.
The following table presents the Company's fair value hierarchy for
those assets and liabilities measured at fair value on a recurring basis
as of 31 March 2013.
Quoted prices Significant
in active other Significant
markets for observable unobservable
identical assets inputs inputs Total
(Level 1) (Level 2) (Level 3)
Assets GBP GBP GBP GBP
Financial instruments designated at fair value through
profit or loss 146,895 34,445,130 207,704 34,799,729
Derivative financial assets - 141,182 - 141,182
146,895 34,611,303 207,704 34,940,911
Liabilities
Financial instruments designated at fair value through
profit or loss (1,583,748) - - (1,583,748)
Derivative financial liabilities - (56,229) - (56,229)
(1,583,748) (56,229) - (1,639,977)
Level 3 investments in securities (assets) include Corporate Bonds with
a market value of GBP182,713 which have been valued by means of one
broker quote, and analysed using comparison to market activity, similar
issuers, and inputs such as credit spreads and duration assumptions,
implied and observed, to assess the veracity of the single bond quote.
The following table shows the movement in Level 3 of the fair value
hierarchy for the period ended 31 March 2013.
Financial instruments designated at fair value through
profit or loss
GBP
Opening balance 173,987
Total gains or losses recognised in the Statement
of Comprehensive Income 8,726
Purchases of investments -
Sales proceeds on disposal of financial instruments
designated at fair value through profit or loss -
Transfer into Level 3 24,991
Closing balance 207,704
There were no significant transfers between Level 1 and Level 2 of the
fair value hierarchy during the period.
8. Fair value hierarchy (continued)
The table below discloses how the gains or losses for Level 3
instruments were accounted for in the Statement of Comprehensive Income
for the period ended 31 March 2013.
Financial instruments designated at fair value through
profit or loss
GBP
Total gains or losses recognised in the Statement
of Comprehensive Income for financial instruments
held at the end of the reporting period: 8,726
- Included within net (loss)/gain on financial instruments
designated at fair value through profit or loss 8,726
The following table presents the Company's fair value hierarchy for
those assets and liabilities measured at fair value on a recurring basis
as of 30 September 2012.
Quoted prices Significant
in active other Significant
markets for observable unobservable
identical assets inputs inputs Total
(Level 1) (Level 2) (Level 3)
Assets GBP GBP GBP GBP
Financial instruments designated at fair value through
profit or loss 663,233 31,932,532 173,987 32,769,752
Derivative financial assets - 5,945 - 5,945
663,233 31,938,477 173,987 32,775,697
Liabilities
Financial instruments designated at fair value through
profit or loss (432,735) (72,595) -(505,330)
Derivative financial liabilities - (182,161) -(182,161)
(432,735) (254,756) -(687,491)
Level 3 investments in securities (assets) include Corporate Bonds with
a market value of GBP173,987 which have been valued by means of one
broker quote, and analysed using comparison to market activity, similar
issuers, and inputs such as credit spreads and duration assumptions,
implied and observed, to assess the veracity of the single bond quote.
The following table shows the movement in Level 3 of the fair value
hierarchy for the year ended 30 September 2012.
Financial instruments designated at fair value through
profit or loss
GBP
Opening balance 1,232,693
Total gains or losses recognised in the Statement
of Comprehensive Income (361,025)
Purchases of investments -
Sales proceeds on disposal of financial instruments
designated at fair value through profit or loss -
Transfer out of Level 3 (697,681)
Closing balance 173,987
There were no significant transfers between Level 1 and Level 2 of the
fair value hierarchy during the year. The transfer out of Level 3
consisted of Oceanteam Shipping ASA and Remedial Cayman Limited which at
the 30
8. Fair value hierarchy (continued)
September 2011 were valued using a single broker quote but at 30
September 2012 were valued using multiple broker quotes.
The table below discloses how the gains or losses for Level 3
instruments were accounted for in the Statement of Comprehensive Income
for the year ended 30 September 2012.
Financial instruments designated at fair value through
profit or loss
GBP
Total gains or losses recognised in the Statement
of Comprehensive Income for financial instruments
held at the end of the reporting period: (361,025)
- Included within net (loss)/gain on financial instruments
designated at fair value through profit or loss (361,025)
The following table presents the Company's fair value hierarchy for
those assets and liabilities measured at fair value on a recurring basis
as of 31 March 2012.
Quoted prices Significant
in active other Significant
markets for observable unobservable
identical assets inputs inputs Total
(Level 1) (Level 2) (Level 3)
Assets GBP GBP GBP GBP
Financial instruments designated at fair value through
profit or loss 95,571 29,271,962 979,042 30,346,575
Derivative financial assets - 108,714 - 108,714
95,571 29,380,676 979,042 30,455,289
Liabilities
Financial instruments designated at fair value through
profit or loss (966,002) - - (966,002)
Derivative financial liabilities - (65,706) - (65,706)
(966,002) (65,706) -(1,031,708)
Level 3 investments in securities (assets) include Corporate Bonds with
a market value of GBP994,825 which have been valued by means of one
broker quote, and analysed using comparison to market activity, similar
issuers, and inputs such as credit spreads and duration assumptions,
implied and observed, to assess the veracity of the single bond quote.
The following table shows the movement in Level 3 of the fair value
hierarchy for the period ended 31 March 2012.
Financial instruments designated at fair value through
profit or loss
GBP
Opening balance 1,232,693
Total gains or losses recognised in the Statement
of Comprehensive Income (51,402)
Purchases of investments -
Sales proceeds on disposal of financial instruments
designated at fair value through profit or loss -
Transfer out of Level 3 (202,249)
Closing balance 979,042
8. Fair value hierarchy (continued)
There were no significant transfers between Level 1 and Level 2 of the
fair value hierarchy during the period.
The table below discloses how the gains or losses for Level 3
instruments were accounted for in the Statement of Comprehensive Income
for the period ended 31 March 2012.
Financial instruments designated at fair value through
profit or loss
GBP
Total gains or losses recognised in the Statement
of Comprehensive Income for financial instruments
held at the end of the reporting period: (35,619)
- Included within net (loss)/gain on financial instruments
designated at fair value through profit or loss (35,619)
9. Cash and cash equivalents
31 March 2013 30 September 2012 31 March 2012
GBP GBP GBP
Unaudited Audited Unaudited
Sterling cash 2,453,890 1,340,837 3,983,522
Euro cash 151,138 (605,716) (228,117)
Norwegian Krone cash 24,092 243,608 3,056
Swedish Krone cash 8,768 (94,450) -
US Dollar cash (474,006) 564,545 74,217
Cash and bank balances 2,163,882 1,448,824 3,832,678
The Company is in a net surplus cash position with its Prime Broker.
However, as detailed in the above table, the Company does borrow in
several currencies against assets of the Company and is entitled to
offset under a master netting agreement with the Prime Broker.
10. Other liabilities and payables
31 March 2013 30 September 2012 31 March 2012
Notes GBP GBP GBP
Unaudited Audited Unaudited
Due to related parties
-Investment management
fees 12 44,278 41,680 41,472
Interest payable 644 1,811 12,464
Accrued Expenses 79,922 102,206 70,774
Total payables 124,844 145,697 124,710
Other liabilities principally comprise amounts outstanding in respect of
ongoing costs. The Directors consider the carrying amount of other
liabilities to approximate their fair value.
Terms and conditions of the above other liabilities:
-- For terms and conditions relating to related parties, refer to note 12.
-- Accrued expenses are non-interest bearing and have an average term of
less than 3 months.
11. Share capital
Authorised share 31 March 2013 30 September 2012 31 March 2012
capital
GBP GBP GBP
Unaudited Audited Unaudited
Number of Number of Number of
Ordinary Shares Ordinary Shares Ordinary Shares
Ordinary shares of no Unlimited Unlimited Unlimited
par value each
30 September
Issued and fully paid 31 March 2013 2012 31 March 2012
GBP GBP GBP
Unaudited Audited Unaudited
Number of Number of Number of
Ordinary Shares Ordinary Shares Ordinary Shares
Balance at start of the
period/year 97,410,000 97,410,000 97,410,000
Issue of new Ordinary shares with
no par value - - -
Balance at the end of the
period/year 97,410,000 97,410,000 97,410,000
On incorporation, 2 Ordinary shares were issued and fully paid to the
subscribers to the Memorandum of Association of the Company. Those
Ordinary shares were made available under the initial placing.
Rights
The Company has the power to increase or reduce its share capital and to
attach to any shares in the initial or increased or reduced capital any
preferred deferred qualified or special rights, privileges and
conditions or to subject the same to any restrictions or limitations and
to consolidate or sub-divide all or any of its shares into shares of a
larger or smaller denomination.
The holders of the Ordinary shares have the following rights:
Dividends: Holders of Ordinary shares are entitled to receive, and
participate in, any dividends or other distributions out of the profits
or otherwise of the Company available for dividend and resolved to be
distributed in respect of any accounting period or other income or right
to participate therein.
Winding Up: Holders of Ordinary shares shall be entitled to the surplus
assets remaining after payment of all creditors of the Company.
Voting: Holders of Ordinary shares shall have the right to receive
notice of, and to attend and vote at general meetings of the Company and
each shareholder being present in person or by proxy or by a duly
authorised representative (if a corporation) at a meeting shall upon a
show of hands have one vote and upon a poll each such shareholder shall
have one vote in respect of each Ordinary share held.
12. Material agreements and related parties
Investment Manager
The Company is a party to an Investment Management Agreement with the
Investment Manager, dated 8 November 2006, pursuant to which the Company
has appointed the Investment Manager to manage its assets on a
day-to-day basis in accordance with its investment objectives and
policies, subject to the overall supervision and direction of its Boards
of Directors.
The Company pays the Investment Manager a Management Fee and Performance
Fee (see note 5).
12. Material agreements and related parties (continued)
Management fee
Under the terms of the Investment Management Agreement, the Investment
Manager is entitled to receive from the Company a monthly management fee
payable in arrears as at the last business day of each month that is
equal to 0.125 per cent. (equivalent to 1.5 per cent. per annum) of the
net asset value of the Company as at the first business day of the
month. Management fees for the period were GBP259,219 (31 March 2012:
GBP234,321) of which GBP44,278 was outstanding at 31 March 2013 (30
September 2012: GBP41,680, 31 March 2012: GBP41,472).
Performance fee
The performance fee in respect of each performance year will be an
amount equal to 20 per cent of the amount, if any, by which the total
return for such performance year exceeds the performance hurdle. For the
avoidance of doubt, the performance fee arrangements are subject to a
minimum of zero and will not result in any repayment of performance fees
in respect of previous performance periods. There was no performance fee
for the period ended 31 March 2013 or 31 March 2012.
For these purposes performance year means each year corresponding to
each accounting period of the Company.
Total return means in respect of each performance year the excess, if
any, of:
1. the Company's net asset value on the last day of such performance year
plus the aggregate of any capital return and/or dividends payable in
respect of such performance year, over
2. the Company's net asset value on the first day of such performance year.
Transactions
There were no such related party transactions for the period ended 31
March 2013 or 31 March 2012.
Administration fee
Under the terms of the Administration Agreement, the Administrator is
entitled to receive from the Company an administration fee of 0.095 per
cent of the net asset value of the Company with a minimum of USD14,200
per month. In addition, the Administrator is entitled to an annual
company secretarial fee on a time charge basis with a minimum of
USD50,400 per annum. Administration fees for the period were GBP81,562
(31 March 2012 GBP75,001) of which GBP8,600 was outstanding at 31 March
2013 (30 September 2012: GBP23,009, 31 March 2012: GBP7,975).
Prime Broker and Custodian fee
The Prime Broker and Custodian will receive such fees as may be agreed
with the Company from time to time, reflecting normal commercial rates
which may be based upon a combination of transaction charges and
interest costs.
Investment by CQS Cayman Limited Partnership and all entities managed or
advised by, and employees of CQS(UK)LLP and CQS Asset Management Limited
("CQS Group Entities")
CQS Group Entities held 64,027,585 shares as at 31 March 2013 (30
September 2012: 14,599,027, 31 March 2012: 14,049,027 ). There were no
sales of shares during the period from 1 October 2012 to 31 March 2013,
(sales of 1,000,000 in the period from 1 October 2011 to 31 March 2012).
Since CQS Cayman LP acquired shares from Ironsides Partners LLC, its
holding passed the threshold which required it to announce a mandatory
offer for the remaining shares in the Company. This process was
completed on 27 November 2012. Please refer to note 16 for further
details.
Directors' interests
Mr. Gavin Strachan held 109,482 shares as at 31 March 2013 (30 September
2012: 109,482, 31 March 2012: 59,482). A person closely connected to Mr.
Michael Salter held 88,964 shares as at 31 March 2013 (30 September
2012: 88,964, 31 March 2012: 38,964). Mr. Bruce Appelbaum held 15,000
shares as at 31 March 2013 (30 September 2012: 15,000, 31 March 2012:
15,000).
12. Material agreements and related parties (continued)
Directors' Remuneration
The Chairman receives an annual fee of GBP25,000 and Mr Appelbaum, Mr
Ash, Mr Gamble and Mr Strachan receive an annual fee of GBP15,000 each.
Mr. Gamble as Chairman of the audit committee also receives an
additional annual fee of GBP2,500.
Total 30
Directors 31 March September 31 March
fees paid: 2013 2012 2012
Michael GBP GBP GBP
Salter Unaudited Audited Unaudited
(Chairman) 12,500 25,000 12,500
Bruce
Appelbaum 7,500 15,000 7,500
Trevor Ash 7,500 15,000 7,500
Jonathan
Gamble 8,750 17,500 8,750
Gavin
Strachan 7,500 15,000 7,500
43,750 87,500 43,750
13. Dividend policy and proposed dividends
Further to the Company's announcement to pay regular cash distributions
in the form of a semi-annual dividend payment and to target dividends
equivalent to an annual yield of 5 per cent of Net Asset Value per
Ordinary Share at the start of each financial year, the Board proposed a
final dividend of 0.69 pence per Ordinary Share in respect of the
financial year ended 30 September 2012. The final dividend was approved
at the Annual General meeting on 6 March 2013 and paid to shareholders
of record at 15 March 2013 on 10 April 2013. On 19 June 2013, the
Company declared an interim dividend of 0.87 pence per Ordinary Share in
respect of the financial year ending 30 September 2013. The interim
dividend will be payable on 7 August 2013 to shareholders on the
register on 12 July 2013.
14. Exchange rates
The following foreign exchange rates were used:
Currency 31 March 2013 30 September 2012 31 March 2012
Norwegian Krone 8.8564 9.2444 9.1136
Swedish Krone 9.8730 10.5876 10.6016
United States Dollar 1.5185 1.6148 1.5978
Euro 1.1825 1.2552 1.1998
15. Seasonal or cyclical changes
The Company is not subject to seasonal or cyclical changes.
16. Significant events during the period
On 19 October 2012, CQS Cayman LP, acting as the investment manager on
behalf of CQS Directional Opportunities Master Fund Limited, announced
the acquisition of 22,424,600 Ordinary shares at a price of 31.5 pence
per Ordinary share from Ironsides Partners Opportunity Master Fund LP
representing approximately 23.02 per cent of the issued share capital of
CQS Rig Finance Fund.
Accordingly, CQS Cayman LP, together with the other members of the CQS
Group Entities, were thus interested in 47,848,652 Ordinary shares
representing approximately 49.12 per cent of the issued share capital of
CQS Rig Finance Fund Limited and, as a result, CQS Cayman LP was
required to make a mandatory takeover offer for the remaining Ordinary
shares in CQS Rig Finance Fund Limited in which it was not interested in
accordance with Rule 9 of the Takeover Code. As announced on 28 November
2012 by CQS Cayman LP, acceptances had been
16. Significant events during the period (continued)
received in respect of 16,179,133 Ordinary shares (representing
approximately 16.61% of the voting rights and issued Ordinary share
capital of the Company).
In aggregate, therefore, CQS Cayman LP, together with the other members
of the CQS Group Entities, hold 64,027,785 Ordinary shares, representing
approximately 65.73 per cent of the voting rights and issued Ordinary
share capital of the Company.
There were no other significant events affecting the Company during the
period end that require disclosure within these condensed interim
financial statements.
17. Significant events after the period end
There were no significant events affecting the Company since the period
end that require disclosure within these condensed interim financial
statements.
18. Approval of the condensed interim financial statements
The condensed interim financial statements were approved by the Board of
Directors on 19 June 2013.
This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: CQS Rig Finance Fund Ltd via Thomson Reuters ONE
HUG#1710583
http://www.cqsrigfinance.com/
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