TIDMJIL
RNS Number : 3968T
Juridica Investments Limited
28 September 2010
Juridica Investments Limited
('JIL' or the 'Company')
Half-yearly results for the six months ended 30 June 2010
Juridica, a leading provider of capital to the law market, today announces its
financial results for the six months to 30 June 2010.
Financial highlights and portfolio valuation
* As at 30 June 2010, the Company has invested or committed approximately $127
million in 23 cases across 16 investments.
* Net Asset Value of $209.8 million as compared to $216.0 million at 31 December
2009.
* Court system delays and our previously reported adverse ruling on case 5608-N
negatively impacted our current portfolio valuation by a total of $1.1 million.
* Total comprehensive loss of $5.2 million (income of $553,000 during same
period in 2009) resulting from fund expenses of $4.3 million and total negative
revenue of $900,000.
* As at 30 June 2010 the Company had $66.5 million of cash or cash equivalents
as compared to $77.1 million at 31 December 2009.
Subsequent to 30 June 2010, the Company realised approximately $4.2 million from
two settlements. The first settlement was from case 0408-W with gross proceeds
of approximately $3.8 million and was announced by the Company on 31 August
2010. The second related to a partial settlement form only one minor defendant
on patent infringement case 0609-V with gross proceeds of approximately
$400,000.
Commenting on the results, Juridica's Chairman, Lord Brennan QC, said:
"Although events during the first half of 2010 required us to revalue several
cases downward, based on timing, and, in a few instances, other factors, we
remain confident in the Manager's view of the Company's expected profit on our
investments once the underlying cases come to a full conclusion. Based on the
Manager's current valuation, and their view that several cases have the
potential to deliver large returns, we believe shareholders will see strong
returns once our cases are concluded."
Operational highlights
* Since inception and through 27 September 2010, the Company has earned total
cash returns of approximately $29 million from eight investments in litigation
cases of which five have come to a full conclusion and two have had partial
settlements.
* The carrying value of the Company's investment has increased by approximately
4.4% during the six month period ended 30 June 2010. This increase was due to
cash investments made on new and existing investments and the net change in
valuation of the Company's investments.
* As at 27 September 2010, the Company's portfolio included 15 investments
giving exposure to 22 active litigation cases comprised of: five competition
cases (two monopolisation cases and three price-fixing cases); one statutory
claim; twelve patent cases; one property damage and insurance subrogation case;
two contract disputes (including one trial judgment); and one arbitration case
involving a sovereign state through the World Bank's International Centre for
Settlement of Investment Disputes (ICSID).
* Total capital invested or committed as of 27 September 2010 was a maximum of
$124.6 million (excluding the fully settled cases). Additional reserves of
approximately $21 million have been set aside to fund two investments that the
Manager believes will deliver very strong returns. The Company expects to fund
these investments prior to end of 2010.
Richard Fields, Chief Executive Officer, Juridica Capital Management Limited,
commented:
"We continue to see strong demand for our services as evidenced by a pipeline of
potential investments that exceeds our expectations. The high demand for the
Company's services is allowing us to be highly selective in determining the best
investments for the portfolio and ensuring the transactions are structured with
highly favourable terms to reduce transaction risk and maximize the Company's
potential return. Since Juridica's inception we have reviewed over 500 cases
and thousands of patents for potential investment. During the period from 1
January 2010 to 27 September 2010, Juridica invested in two new patent cases.
Both investments involve patents that were developed by Fortune 500 companies.
One case, 0609-V, has already delivered a partial settlement from one defendant
even though the Company's investment is only a few months old.
Since the Company's admission to AIM in December 2007, it has invested or
committed $143.8 million to a total of 20 investments in 27 cases. Eight
investments have resulted in cash proceeds to the Company, of which five have
completed successfully and are closed. Whilst the recession has caused the
litigation process to extend longer than usual, especially in larger cases, the
potential gains from Juridica's investments have also increased. We have
complete confidence in JIL's portfolio and although the investments remain
risky, we believe that they have the potential to deliver significant returns."
- Ends -
The full report can be downloaded at: www.juridicainvestments.com
For further information, please contact:
+------------------------------+------------------------------+
| Juridica Management Limited | +1 (866) 443-1080 |
| Richard W. Fields | |
| | |
+------------------------------+------------------------------+
| Cenkos Securities | +44 (0) 20 7397 8900 |
| Nicholas Wells | |
| Camilla Hume | |
| | |
+------------------------------+------------------------------+
| Pelham Bell Pottinger | +44 (0) 20 7861 3232 |
| David Rydell | |
| Olly Scott | |
+------------------------------+------------------------------+
About Juridica Investments Limited
Juridica Investments is a leading provider of strategic capital to the business
community and the legal markets for corporate claims. It invests directly and
indirectly in a diversified portfolio of corporate claims in litigation and
arbitration. Juridica is the premier source of value-added and direct financing
for large business claims in the United States and one of the leading sources in
the United Kingdom.
Our clients are Fortune 1000 companies, FT Global 500 companies, inventors,
major universities, and the leading law firms that represent them. Juridica
accepts only cases that have already been carefully vetted and undertaken by
leading lawyers.
Juridica works to make the legal system work better for business claims.
Juridica does not invest in speculative claims or claims that have not
demonstrated economic value and clear merits. Juridica invests only in business
claims, and does not invest in class actions, personal injury, product
liability, or mass tort claims.
Our goal is to provide business clients with financial choices that reduce risk
and assist in maximizing claim value.
Juridica was established on 21 December 2007 as a limited liability,
closed-ended investment company registered in Guernsey. It has over US$200
million of assets under management and is listed on AIM, a market operated by
the London Stock Exchange (AIM: JIL).
The Company has appointed Juridica Capital Management Limited as its exclusive
investment manager to locate, evaluate and manage direct and indirect
investments in cases, claims and disputes.
This announcement contains forward looking statements, which are based on the
Board's current expectations and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or events to
differ materially from those expressed or implied in such statements. It is
believed that the expectations reflected in these statements are reasonable, but
they may be affected by a number of variables which could cause actual results
or trends to differ materially. Each forward looking statement speaks only as of
the date of the particular statement. Except as required by the AIM Rules or
otherwise by law, the Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward looking statements
contained herein to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
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| JURIDICA INVESTMENTS LIMITED |
| CORPORATE INFORMATION |
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| Directors of the | | | Lord Daniel Brennan |
| Company : | | | (Non-executive Chairman) |
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| | | | | | Richard Battey (Non-executive |
| | | | | | Director) |
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| | | | | | Kermit Birchfield (Non-executive |
| | | | | | Director) |
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| Investment Manager | | | Juridica Capital Management |
| : | | | Limited |
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| | | | | | Bordeaux Court | | |
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| Administrator and Company | Bordeaux Services (Guernsey) |
| Secretary : | Limited |
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| | | | | | Bordeaux Court | | |
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| Registered Office | | | Bordeaux Court | | |
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| Independent | | | Pricewaterhouse Coopers | |
| Auditors : | | | CI LLP | |
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| | | | | | Royal Bank Place | | |
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| | | | | | PO Box 321 | | | |
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| Nominated Adviser and | | Cenkos Securities | | |
| Broker : | | plc | | |
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| | | | | | 6.7.8 Tokenhouse | | |
| | | | | | Yard | | |
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| | | | | | London, EC2R 7AS | | |
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| Registrar : | | | | Capita Registrars (Guernsey) |
| | | | | Limited |
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| | | | | | 2nd Floor, No.1 Le | |
| | | | | | Truchot | |
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| Guernsey Advocates | | | Mourant Ozannes | | |
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| | | | | | 1 Le Marchant | | |
| | | | | | Street | | |
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| English Solicitors | | | Travers Smith LLP | |
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| | | | | | London, EC1A 2AL | | |
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JURIDICA INVESTMENTS LIMITED
CHAIRMAN'S STATEMENT
As Chairman of the Board of Juridica Investments Limited, I am pleased to
present the results of the Company for the six month period ended 30 June 2010.
The Company's investment manager ("JCML" or the "Manager") continues to
reinforce Juridica's position as a market leader in the US and UK in the
financing of corporate claims. During the reporting period, JCML identified,
and Juridica funded, two additional multi-defendant patent cases and purchased
an insurance contract on an existing case that provides a minimum return on the
related investment.
To date, the portfolio assembled by the Manager includes 15 investments in 22
cases. The plaintiffs in these cases include 19 Fortune 500 or multinational
companies, eight small to mid-range businesses, and two major US universities.
The plaintiffs in the cases that comprise the Company's investment portfolio are
represented by over a dozen leading US law firms.
Since 1 January 2010, the Company has had one case come to a successful
conclusion. Case 0408-W, one of Juridica's initial investments, delivered a 34%
return on investment despite a negative pre-trial ruling in Q1 2010, as
previously reported, that denied certain of the plaintiff claims. I believe
Juridica's ability to generate a sizeable return, notwithstanding the negative
pre-trial ruling, is a testament to the Manager's ability to structure
investments with terms that protect the Company. In addition, Juridica received
a partial settlement of approximately $400,000 on case 6409-V which it invested
during Q1 2010. This early settlement is typical in multi-defendant cases and
is a positive indicator towards the validity of the claims.
Juridica continues to feel the effects of the ongoing recession which has had a
negative impact on the timing of settlements. This is especially true for cases
with larger damage claims as defendants are continuing to choose to take
additional risk and litigate, rather than settle early. Although this pattern
has lengthened the holding period for the Company's investments, the average age
of its investments, as of 27 September 2010 is only 1.61 years. Whilst the
longer holding period impacts upon the Company's ability to recycle its cash, it
may also drive higher returns in those investments where the underlying cases
are successful.
Juridica, through its Manager, invests in litigation matters that, like all
litigation events, are subject to significant intrinsic and extrinsic risk. No
assurances can be made that the Company will earn any future return on its
investment in any particular case and the risk of loss of investment remains
until each case reaches its final conclusion. However, I believe the Manager is
adept at identifying cases with strong merits and is able to structure
favourable transaction terms so as to minimise this risk. I and the other
Directors of JIL believe that there is an opportunity to earn highly attractive
returns on the Company's portfolio.
This belief is supported by a valuation analysis performed by JCML on terminal
values for each case that reflects a high confidence total return on the
invested portfolio of 50%. The Manager believes that as the cases progress and
clear their various legal hurdles, there is potential for significantly greater
returns than those indicated in this analysis. JCML revisits the valuation on
its investments continuously and formally adjusts its stated value every six
months. The high confidence level of expected return could rise or fall
depending on the development of the various cases.
This report covers trading from 1 January 2010 to 27 September 2010 and the
reviewed results below cover the six-month trading period ended 30 June 2010.
Highlights from the six months to 30 June 2010 include the following:
· As at 30 June 2010, Juridica has invested or committed approximately $127
million in 23 cases across 16 investments (excluding settled cases). Since 1
January 2010 the Company has made two additional investments. Each of these
investments relates to patent infringement cases.
· The underlying cases funded by the facility that Juridica has in place
with Fields Scrantom Sullivan PLLC ("FSS") continue to progress through the
litigation cycle As announced in the 2009 Annual Report and Accounts, case
1208-A successfully concluded a jury trial in Q3 2009 and continues to await
damages assessment. These damages are subject to trebling by the court after a
jury award and could result in a sizeable return. The Manager believes this
case could be resolved within the next 12 to 18 months. Several of the other
cases within this facility have progressed favourably including 8008-L which the
Manager also believes has significant potential for a sizeable return. The one
notable exception is case 5608-N which, as announced in the 2009 Annual Report
and Accounts, had a negative ruling from the court that jeopardizes the
potential success of the related investment. The ruling is currently under
appeal and should be determined within the next six to nine months. If the
appeal is unsuccessful, the case would be declared a loss. However, since the
case is valued in combination with the other cases funded by the facility, the
Board does not expect the impact of a loss to be as great as if it were an
individual investment.
· Since inception and through 30 June 2010, the Company has earned cash
returns from four investments in litigation cases that came to a full conclusion
and two investments in cases that have had partial settlements (of which one
relates to a case that is part of the loan facility which the Company has with
FSS).
· Case 0608-S remains suspended and continues to reflect a value equal to
25% of Juridica's initial investment. This suspension was originally announced
on 2 November 2009 and the 75% write-down was taken at 31 December 2009. The
Company is pursuing claims against third parties connected to the investment and
hopes to announce further progress on this within the next 12 months.
· The carrying value of the Company's investments has increased by
approximately 4.4% during the six-month period ended 30 June 2010. This
increase was due to cash investments made on new and existing investments and
the net change in valuation of the Company's investments. Changes in valuation
of the Company's portfolio are caused by continuing use of effective interest
that systematically increases the valuation of Juridica's investments over time
towards their expected terminal value. Additional unrealised income or loss is
reflected for each investment based on a combination of changes in the Manager's
view of settlement ranges and expected timing. During the six month period
ended 30 June 2010, several of Juridica's cases had an outward shift in
expectation of timing due to delays in the court system or changes in the case
strategy. These timing delays required the Company's Manager to reduce current
valuation even though the extended terminal value remains unchanged. In
addition, the negative ruling associated with case 5608-N resulted in a moderate
reduction in the FSS facility's expected terminal value.
Results for the Six Month Period Ended 30 June 2010
Income
During the six-month period ended 30 June 2010 the Company and its subsidiaries
reported a comprehensive loss of $5.2 million. This loss was driven by fund
expenses of $4.3 million, and revenue components that included: interest income
of $183,000; a realised gain of $41,000; other income arising on contractual
interests of $183,000; and a loss arising on available for sale debt securities
of $1.3 million.
· Fund expenses consist of all operating expenses required to operate the
Company and primarily consist of the management fee and due diligence and
transaction costs.
· Interest income of approximately $183,000 is generated from the Company's
cash balances held in highly liquid investment or demand accounts. Interest
income dropped substantially in the six-month period ended 30 June 2010 as
compared to the six-month period ended 30 June 2009 due to the substantial drop
in market interest rates paid on cash accounts and short-term investments; and
the decrease in the Company's cash balance caused by the Company making
additional investments and funding the Company's operating expenses. Given the
prevailing interest rate environment, the Manager expects interest income to
remain low.
· Realised gain on investment of approximately $41,000 relates to residual
gains from case 6308-F that came to full conclusion in 2009. Approximately
$915,000 in profit related to this case was recognised in 2009.
· Other income arising on contractual interests of $183,000 is derived from
the sum total of (i) year-to-date income of $3.3 million generated from the
effective interest rate on Juridica's investments calculated in accordance with
the Company's accounting policies; and (ii) a fair value decrease of $3.1
million due to changes in estimated future cash flows. The effective interest
rate impact remains constant throughout the life of the investment and is
derived from the Manager's initial estimate of expected outcome for each
individual investment in the absence of an established market for the Company's
assets. The fair value movement due to changes in estimated future cash flows
may change significantly throughout the life of the investment depending on how
case spending, timing and expectations change.
· The loss arising from available for sale debt securities of $1.3 million
relates to the investments made under the Company's loan facility with FSS and
is derived from the sum total of (i) year-to-date income of $5.7 million
generated from the effective interest rate on the loan facility calculated in
accordance with the Company's accounting policies; and (ii) fair value decrease
of $7.0 million due to changes in estimated future cash flows of which most
relate to the reported ruling on case 5608-N; however, it is important to
emphasize that this ruling is not final and is presently on appeal.
Cash
Over the reporting period, the Company reviewed its position on currency
holdings and determined that it was most appropriate for the predominance of
cash holdings to remain dollar denominated.
As at 30 June 2010 the Company had $66.5 million of cash or cash equivalents
comprising $64.1 million in dollar denominated holdings and the balance in
sterling. The Company expects additional money to be deployed in new cases but
will continue to reserve enough cash to fully fund existing investments and
cover certain fund expenses.
Net asset value
Over the reporting period, the Company reported a net loss of $5.2 million which
resulted in a net asset value of $209.8 million or $1.8956 per ordinary share.
Dividend
Through 30 June 2010, the Company has not generated sufficient realised gains in
2010 to justify paying a dividend.
The portfolio
As at 27 September 2010, the Company's portfolio included 15 investments giving
exposure to 22 active litigation cases comprised of: five competition cases (two
monopolisation cases and three price-fixing cases); one statutory claim; 12
patent cases; one property damage and insurance subrogation case; two contract
disputes (including one trial judgment); and one arbitration case involving a
sovereign state through the World Bank's International Centre for Settlement of
Investment Disputes (ICSID).
The total capital invested or committed by the Company as of 27 September 2010
in these investments was a maximum of $124.6 million (excluding the fully
settled cases). Of the total amount committed or invested, $80.5 million was
committed through the loan facility to FSS enabling it to finance five
competition cases and one statutory claim; $37.4 million is invested in patent
litigation and licensing enforcement activities; $2.8 million is invested in an
international arbitration (ICSID) case; $3.4 million is invested in two contract
disputes (including an insurance premium associated with one of the cases); and
$0.5 million is invested in a property damage and subrogation claim.
Outlook
The Board remains convinced that Juridica has developed a strong portfolio of
investments. The Manager performs significant due diligence prior to
recommending an investment and structures each transaction to ensure Juridica is
well rewarded in the event of a favourable outcome. However, the legal process
has many variables associated with it. As such, the outlook for the Company's
cases can improve or degrade at each reporting period. Although events during
the first half of 2010 required us to revalue certain cases downward resulting
in negative revenue, this is not indicative of our ongoing expectations for the
terminal value of our investments. The second half of 2010 has already provided
us with two settlements and the potential remains for other positive activity in
the near future.
Although our investments continue to involve inherent risk, the Board remains
encouraged by the progress to date and confident in JIL's portfolio and believe
some of the investments in the portfolio have the potential to generate highly
attractive returns because of the size of the claims involved.
Lord Daniel Brennan QC
Chairman
Guernsey, 27 September 2010
JURIDICA INVESTMENTS LIMITED
Investment Manager's Report
As the Company began its third year of operations, the Manager continued to see
strong demand in the market for corporate claims finance. The Manager believes
that this is, in part, due to continued development and marketing within the
industry. In addition, the Manager believes that the ongoing recession is
causing the litigation process to extend longer than usual, especially in larger
cases. Although this situation has delayed potential gain from Juridica's
investments, it is also making it difficult for some plaintiffs and their firms
to fund the prosecution of their claims for this extended period. As a result,
many are looking to strategic capital firms, like Juridica, to fund their
claims. The growth in the Company's pipeline of potential investments far
exceeds expectations and allows the Manager to be highly selective in
determining the best investments for the portfolio. In addition, the strong
demand provides for significant latitude in structuring highly favourable terms
that reduces transaction risk and maximizes the Company's potential return.
Although the continuing recessionary environment is extending the holding period
for investments longer than expected, if Juridica's underlying cases are
successful, the Manager expects that the longer holding period may drive larger
returns. This has already been evidenced in cases 1208-A and 0808-C(1), both of
which have already realised success on key issues through the legal cycle. The
Manager believes that in a normal economic environment these cases would have
already reached settlement. Because these cases did not settle earlier in their
legal cycle and because the cases have successfully achieved certain milestones,
the Manager believes the settlement value of each case should increase. This in
turn potentially drives greater shareholder return.
Since Juridica's inception, the Manager has reviewed over 500 cases and
thousands of patents for potential investment. During the period from 1 January
2010 to 27 September 2010, Juridica invested in two new patent cases. Both
investments involvepatents that were developed by Fortune 500 companies. One
case, 6409-V, has already delivered a partial settlement from one defendant even
though the Company's investment is only a few months old.
Highlights
Since the Company's admission to AIM in December 2007, it has invested or
committed $143.8 million in a total of 20 investments in 27 cases. Eight
investments have resulted in cash proceeds to the Company, of which five have
completed successfully and are closed. The total gross proceeds received or
owed to Juridica relating to these settlements is approximately $29 million.
To date in 2010, and subsequent to 30 June 2010, Juridica has realised
approximately $4.2 million relating to two settlements. Firstly, a successful
conclusion to case 0408-W was obtained which will deliver gross receipts of
approximately $3.8 million back to the Company. A portion of these receipts
were received in Q3 of this year and the remainder will be remitted in early Q1
2011. Juridica's return on this investment was 34% despite a negative
pre-trialruling in Q1 2010, as previously reported, that denied certain of the
plaintiff claims. The Company's return remained strong despite this ruling
because the transaction was structured so as to provide a minimum level of
return. Secondly, case 6409-V delivered approximately $400,000 in a partial
settlement from one defendant even though JIL's investment is only a few months
old. Obtaining an early settlement on a new case is important because it helps
validate the claims that may drive future settlements. The Manager sees an
increased probability of additional settlements in 6409-V over the next twelve
months.
As of 27 September 2010, the Company has invested or committed a substantial
portion of its capital (approximately $124.6 million) in 22 cases across 15
investments. Since 31 December 2009 the Company has made two investments, both
of which relate to multi-defendant patent infringement cases.
Juridica's Net Asset Value ("NAV") decreased slightly during the six month
period ended 30 June 2010 as a result of fund expenses being greater than fund
income, causing the Company to report a comprehensive loss of $5.2 million.
Fund expenses during this period were approximately $4.3 million and consisted
primarily of contractual management fees and due diligence and transaction
costs. Revenue totalled negative $900,000 and was comprised of the following:
interest income of $183,000; a realised gain of $41,000; other income arising on
contractual interests of $183,000; and a loss arising on available for sale debt
securities of $1.3 million. The negative level of income is driven by changes
in the timing of certain investments and changes in estimated future cash flows
for certain investments.
Valuation
The Manager values Juridica's investments using valuation methods that are
recognised as standard within the industry and in a manner that follows
International Financial Reporting Standards' ("IFRS") fair value accounting
rules. Under fair value accounting, an initial valuation is established by the
Manager from its valuation model that is based on the merits of the case and the
Manager's high confidence view of the probability and timing of various
settlement scenarios and trial outcome and the potential of profit to the
Company ("Case Terminal Value"). The scenarios are assigned a probability that
incorporates all risks intrinsic to the case. The Manager also identifies risks
that are extrinsic to the case, including such items as: claimholder risk;
counsel risk; defendant risk; judicial risk; and other risks that are present in
all legal cases but not directly related to the merits of the case. The Manager
then uses the effective interest method of calculation to generate an interest
rate ("Initial Interest Rate") that systematically increases the invested basis
up to its Case Terminal Value in the expected timeframe.
The Manager revisits the assumptions behind each investment's valuation on a
bi-annual basis and if needed, will rerun the investment's valuation. If a new
valuation is prepared, it will generate a revised expectation towards the
investment's future cash flow. In accordance with the effective interest method
of calculation, the Manager will then discount the revised stream of cash flow
by applying a discount rate equal to the investment'sInitial Interest Rate. The
carrying value of the investment will then either be increased or decreased in
order to equal the value of the discounted stream of future cash flows. Changes
in expected future cash flows are expected to occur frequently given the
uncertainty surrounding each investment. Examples of factors that will change
the Manager's view of expected future cash flows include:
· A specific case achieves certain milestones or survives certain legal
challenges within the legal process. This would likely increase the expected
future cash flows and hence increase the investment's valuation.
· The legal process is moving more rapidly than expected which would likely
result in the Company receiving expected proceeds earlier than initially
expected. This would likely increase the investment's valuation.
· A specific case loses certain legal challenges which may cast increased
doubt on the Company's ability to generate the same level of proceeds as
originally anticipated. This would likely reduce the investment's valuation.
· The legal process is moving slower than expected which would likely result
in Juridica receiving expected proceeds later than initially expected. This
would likely decrease the investment's valuation.
· The actual timing of cash outflow related to a specific case diverging
from what was initially expected. This would likely increase or decrease the
investment's valuation depending on whether the timing of spend was slower or
faster than expected.
The magnitude of change in valuation based on any of the above factors is
highly dependent on the specific investment's Initial Interest Rate. The higher
the Initial Interest Rate, the greater the impact any change in expected cash
flow or timing will have on the investment's valuation.
As of 30 June 2010, the Manager examined the valuation for all of Juridica's
investments. In doing so, several cases were faced with an outward shift in
timing due to changes in legal strategy or delays within the court system. For
each of these cases, a downward shift in the valuation occurred from discounting
future cash flows. This downward shift in valuation is netted against the
investment's systematic increase in valuation as determined by the Initial
Interest Rate from the effective interest method. A similar result occurs
(either positive or negative) when case spending differs from expectation. A
large increase in valuation was recognised for case 0408-W that, as of 30 June
2010, had reached a settlement agreement that had not yet received court
approval. The high confidence of approval enabled the Manager to adjust the
expected cash flows and hence increase the valuation.
For the debt facility Juridica has in place with FSS, case 5608-N received a
negative ruling that jeopardizes the potential success of the specific case.
Although the ruling is being appealed and there is a chance it will be reversed,
the Manager sharply increased the probability of losing the specific case in the
valuation assumptions. As a result, the present value of future cash flows from
the facility decreased and when netted against the facility's systematic
increase in valuation as determined by its Initial Interest Rate, resulted in a
net decrease in the valuation of the facility as compared to 31 December 2009.
In total, the value of JIL's direct investments in contractual interests
increased by $3.3 million due to the systematic application of each investment's
effective interest rate. This increase was offset by $3.1 million due to a
decline in the present value of changes in estimated cash flows. The net
increase of $183,000 is reflected on the Consolidated Statement of Comprehensive
Income under the caption "other income/(loss) arising on contractual interests".
The value of JIL's facility with FSS increased in value by $5.7 million due to
the systematic application of the facility's effective interest rate. This
increase was offset by $7.0 million dueto a decline in the present value of
changes in estimated cash flows. The net decrease of $1.3 million is reflected
on the Consolidated Statement of Comprehensive Income under the caption "other
(loss)/income arising on available for sale debt securities".
The process of systematically increasing our investments in accordance with the
effective interest method and then periodically increasingor decreasing the
valuation based on changes in expected cash flows does not impact cash. In
addition, given that certain events in the legal cycle can be severely damaging
in one period only to be reversed in a future period, Juridica's investments may
move dramatically up or down from one period to the next as a result of the IFRS
accounting treatment.
Overall, the current valuation analysis performed by the Manager reflects a Case
Terminal Value that is based on an average rate of return exceeding 50%.
Although this rate of return is strong, the Manager believes individual
investment returns could prove to deliver proceeds that are much higher than
their current Case Terminal Value.
Competition
We are not aware of any new companies entering Juridica's market in the United
States during the last six months. Nonetheless, many smaller ventures have
begun to move into the market and we estimate that as at 30 June 2010 there were
at least six entities operating in competition to Juridica. In the United
Kingdom, although numerous competitors have entered the market, the Company
remains the largest in terms of market capital. The Manager expects to see more
competition in both markets as the industry continues to mature and as investors
seek alternative investments that have the potential to generate substantial
returns.
Portfolio update and cash available
As at 30 June 2010, Juridica had a total of 16 investments involving 23 cases.
The Company's portfolio comprised the investments in the table below:
Portfolio diversification as at 30 June 2010
+------------------+--------+------------+-------------+
| Type | Cases | Total | Investments |
| of | | Commitment | |
| claim | | | |
| or | | | |
| litigation | | | |
+------------------+--------+------------+-------------+
| Antitrust | 2 | $80.5m | 1 |
| (monopolization) | | | |
+------------------+--------+ + +
| Antitrust | 3 | | |
| (price-fixing) | | | |
+------------------+--------+ + +
| Statutory | 1 | | |
| claims | | | |
+------------------+--------+------------+-------------+
| Patents | 12 | $37.3m | 10 |
+------------------+--------+------------+-------------+
| Property | 1 | $0.5m | 1 |
| damage | | | |
| and | | | |
| insurance | | | |
| subrogation | | | |
+------------------+--------+------------+-------------+
| Shareholder | 1 | $2.8m | 1 |
| disputes | | | |
+------------------+--------+------------+-------------+
| Contract | 2 | $3.4m | 2 |
| claims | | | |
+------------------+--------+------------+-------------+
| Arbitration | 1 | $2.9m | 1 |
+------------------+--------+------------+-------------+
| Total | 23 | $127.4m | 16 |
+------------------+--------+------------+-------------+
The portfolio has the following features:
Certain investments include ancillary rights to finance future cases
Number of subject matters: 7
Number of jurisdictions: 11
Number of plaintiff law firms: 13
Average exposure per case: $5.54 million
The above investments represent a significant portion of Juridica's available
investable cash. In addition to the above amounts, an additional $9 million and
$12 million have been reserved for investment options relating to two different
investments. These investments, while incorporating the usual risk of loss,
have been identified through the Manager's due diligence and valuation process
as having the potential to deliver significant returns to the Company. Such
transactions were structured to maximize protection to JIL. Options to provide
additional investment capital are dependent on the Manager's assessment on how
each case is progressing.
The Manager has also reserved approximately $10 million for the Company to take
a significant position in an investment that will provide ongoing revenue and
the potential to provide significant gain to shareholders. This investment, if
completed, will likely occur in Q4 2010.
After reserving for the above amounts, and not including any estimate of cash
received from near-term settlements, Juridica has between $25 million and $35
million of cash remaining. A portion of this amount is reserved to cover
critical fund operating expenses through 2013. The unreserved portion is
available for new investments.
Key schedule dates in invested cases
+---------------+------------+---------------------------------+
| Period | Investment | Event |
+---------------+------------+---------------------------------+
| No scheduled | 0409-C | Recently filed |
| dates | | |
+---------------+------------+---------------------------------+
| No scheduled | 2709-E | Re-exam recently filed |
| dates | | |
+---------------+------------+---------------------------------+
| No scheduled | 1608-T | Administrative tribunal is |
| dates | | determining rights to |
| | | settlement proceeds |
+---------------+------------+---------------------------------+
| No scheduled | 5208-E | Recent appeal victory on |
| dates | | jurisdiction; discovery |
| | | underway |
+---------------+------------+---------------------------------+
| No scheduled | 1208-A | Damages trial not yet scheduled |
| dates | | |
+---------------+------------+---------------------------------+
| No scheduled | 0210-M | Recently filed |
| dates | | |
+---------------+------------+---------------------------------+
| Q3 2010 | 6409-V | Settlement reached with one |
| | | defendant; mediation scheduled |
| | | with others prior to year end |
+---------------+------------+---------------------------------+
| Q3 2010 | 0808-C | Markman hearing scheduled |
| | (TX) | |
+---------------+------------+---------------------------------+
| Q4 2010 | 7508-O | Further licenses expected to be |
| | | signed and funded |
+---------------+------------+---------------------------------+
| Q4 2010 | 0209-S | New complaint expected to be |
| | | filed |
+---------------+------------+---------------------------------+
| Q4 2010 | 0708-B | Claim construction hearing |
| | (CA) | |
+---------------+------------+---------------------------------+
| Q4 2010 | 8008-L | Hearing on defendant's motion |
| | | to dismiss amended complaint |
+---------------+------------+---------------------------------+
| Q4 2010 | 1008-A | Discovery to be completed |
+---------------+------------+---------------------------------+
| Q1 2011 | 0408-W | Settlement proceeds expected |
+---------------+------------+---------------------------------+
| Q2 2011 | 7608-A | Markman hearing scheduled |
+---------------+------------+---------------------------------+
| Q3 2011 | 0808-C | Trial scheduled |
| | (TX) | |
+---------------+------------+---------------------------------+
| Q3 2011 | 6509-A | Decision on appeal anticipated |
+---------------+------------+---------------------------------+
| Q4 2011 | 0108-S | Trial scheduled |
+---------------+------------+---------------------------------+
| Q4 2011 | 5009-S | Trial anticipated |
+---------------+------------+---------------------------------+
| Q4 2011 | 5608-N | Hearing on appeal anticipated |
+---------------+------------+---------------------------------+
| Q1 2012 | 5308-U | Trial scheduled in related |
| | | class case |
+---------------+------------+---------------------------------+
In addition to the events described above, cases 0708-B, 8008-L, 5308-U, 7608-A
and 5208-E and 6409-V are multi-defendant cases, which are expected to have a
laddered settlement profile.
As of 27 September 2010, the average age of the cases in the portfolio was 2.90
years (measured from the date of first filing of any litigation) and the average
age of all of the Company's investments is 1.61 years (measured from the date of
investment). The table below provides this information for each individual
case.
+-------------------+-------------------+-------------------+
| Matter Number | Age of Case (yrs) | Age of Investment |
| | | (yrs) |
+-------------------+-------------------+-------------------+
| 0108-S | 2.46 | 2.50 |
+-------------------+-------------------+-------------------+
| 0408-W | Settled | |
| | | Settled |
+-------------------+-------------------+-------------------+
| 0708-B (2 | 1.90 | 2.21 |
| matters) | | |
+-------------------+-------------------+-------------------+
| 0808-C (2 | 10.21 | 2.08 |
| matters) | | |
+-------------------+-------------------+-------------------+
| 1608-T | 10.15 | 2.14 |
+-------------------+-------------------+-------------------+
| 7608-A | 1.12 | 1.56 |
+-------------------+-------------------+-------------------+
| 7508-O | 0.97 | 1.24 |
+-------------------+-------------------+-------------------+
| 0209-S | 1.76 | 1.11 |
+-------------------+-------------------+-------------------+
| 0409-C | 0.95 | 0.99 |
+-------------------+-------------------+-------------------+
| 2709-E | 0.84 | 1.11 |
+-------------------+-------------------+-------------------+
| 5009-S | 6.26 | 0.75 |
+-------------------+-------------------+-------------------+
| 6509-A | 1.11 | 0.76 |
+-------------------+-------------------+-------------------+
| 6409-V | 0.67 | 0.53 |
+-------------------+-------------------+-------------------+
| 1008-A | 6.24 | 1.87 |
+-------------------+-------------------+-------------------+
| 5608-N | 5.88 | 1.87 |
+-------------------+-------------------+-------------------+
| 1208-A | 3.98 | 1.87 |
+-------------------+-------------------+-------------------+
| 5208-E | 2.59 | 1.87 |
+-------------------+-------------------+-------------------+
| 5308-U | 1.94 | 1.87 |
+-------------------+-------------------+-------------------+
| 8008-L | 0.94 | 1.16 |
+-------------------+-------------------+-------------------+
| 0210-M | N/A | 0.32 |
+-------------------+-------------------+-------------------+
| Average | 2.90 | 1.61 |
+-------------------+-------------------+-------------------+
Developments in invested cases
As the cases in the portfolio age, the Company has seen increasing activity
across its investments. This section reports on recent developments and the
status of each case.
Antitrust cases
Juridica presently has an investment in five antitrust (two monopoly and three
cartel) cases through the loan facility to FSS. Developments in these cases are
described in this section.
JIL's reporting on Case 1208-A has not changed since that which was reported in
our Annual Report and Accounts for 2009. Although this case successfully
concluded a jury trial on certain issues in Q3 2009, damages have not yet been
assessed partly due to an overloaded court schedule. The defendant filed
post-trial motions to overturn the jury verdict and the parties are waiting for
a ruling by the court on these motions. If the motions are denied, an appeal
may be taken on the issues that have been resolved at the trial court level.
An appeal is expected to last from four to eighteen months from the date of a
ruling by the trial court on the pending post-trial motions. If the trial
results are upheld on appeal or the appeal is deemed to be premature, the case
is expected to return to the trial court for a jury trial on the remaining
issues and conclusion at the trial level. The case could be subject to further
appeals after the trial of remaining issues if settlement is not concluded at
some point in the process described above. The plaintiff is a Fortune 500
company. The trial court must automatically treble any damages awarded by the
jury. Through the FSS loan facility Juridica has the potential to receive 18%
to 20% (depending on the timing of other settlements) of any settlement or
collected judgment award.
Case 5608-N is one of two monopoly cases. The status on this case has not
changed since that which was reported in our Annual Report and Accounts for
2009. The court made a ruling on a threshold issue that, absent reversal on
appeal, results in dismissal of the plaintiff's claims. The court, however,
also ruled in the plaintiff's favour on the primary substantive claims.
Consequently, if the threshold ruling is reversed, Case 5608-N will proceed to
jury trial on the merits. The appeal has been filed and is expected to take at
least 12 to 18 months. The Manager believes settlement prior to conclusion of
the appeal is unlikely.
Case 5308-U is a price-fixing cartel case brought by several major companies
against multiple defendants. The relevant clients are direct purchasers that
collectively account for approximately 25% of the US market for the product at
issue in the case. In Q1 2010, the court dismissed certain aspects of the
plaintiffs' claims, but the dismissals did not affect the bulk of the
plaintiffs' damages claims. The case is presently in merits discovery which is
scheduled to be completed in Q3 2010. Expert discovery is currently scheduled
to close in Q3 2011. Dispositive motions must be fully briefed by Q4 2011.
Trial is presently scheduled for Q1 2012. Given that this case is still in its
relatively early stages, this schedule may be extended, but trial still is
expected to occur in 2012.
Case 5208-E is a price-fixing cartel case against multiple defendants that is
pending in the United Kingdom. The European Commission has already found that
the defendants engaged in a price-fixing cartel in Europe. As previously
reported, the UK court recently decided jurisdictional issues in favour of the
plaintiffs and although one defendant has appealed this ruling, the UK court
affirmed this decision. Discovery is now underway. As previously reported, one
defendant has already settled.
Case 8008-L is the most recent price-fixing cartel case in the portfolio. The
case involves antitrust claims brought by several Fortune 500 companies against
a group of large predominantly non-US suppliers. Several of the defendants
already have pled guilty in the US to violating the Sherman Act. Executives of
these companies have either pled guilty or been indicted. The class has been
certified and discovery on the merits is ongoing. Various motions to dismiss
amended complaints have been filed with hearing scheduled for November 2010.
Patent cases
The Company presently has investments in 11 patent cases one of which is
structured as an equity investment in a patent portfolio. Developments in these
cases are described in this section.
0808-C(1) involves a patent portfolio that covers computer hardware technology.
The patents are being asserted against multiple defendants in this case. In Q1
2010, the court ruled in the plaintiffs' favour on several pending motions, both
substantive and procedural. The parties are waiting for additional summary
judgment rulings from the court and the setting of a trial date. In addition,
certain events have occurred in connection with the development of factual
evidence in the case that appear to substantially strengthen the merits of the
plaintiffs' claims.
0808-C(2) is a related case to 0808-C(1) and involves the same plaintiffs
against different defendants. This case is also against multiple defendants in
a jurisdiction that is different from the related case. A motion for change of
venue was recently denied. Trial has been scheduled in this case for Q3 2011.
Case 0108-S involves a patent portfolio that covers secure Internet
communications. The case is presently in discovery. The Markman hearing is
scheduled for Q2 2011 and trial is scheduled for Q4 2011. In the event of
recovery, Juridica is entitled to priority repayment of its investment. This
case is cross-collateralised with Case 0209-S - meaning that Juridica has
priority over any recovery to repay its investment prior to the client receiving
proceeds from either case.
Case 0209-S involves a patent portfolio that covers secure internet
communications and e-commerce. This case is still in the early stages of
development and has not yet had a scheduling hearing. This case is
cross-collateralized with Case 0108-S.
Case 0708-B involves an internet-related patent. Two defendants in the case
have settled to-date for total cash proceeds of $750,000. This investment now
involves two related cases, including one in California and one in Texas. A
second related Texas case was recently dismissed voluntarily for strategic
reasons. There are more than 20 defendants remaining in the two cases. Both
related cases are still in the early stages of development. For ease of
tracking, in the tables above, the first case filed in Texas will now be tracked
as 0708-B(1) and the California case will be tracked as 0708-B(3). The
dismissed Texas case was previously tracked as 0708-B(2). In the event of any
recovery, Juridica is entitled to priority repayment of its investment.
0409-C involves a patent that covers the treatment of a disease. A complaint
was filed in Q4 2009 against one large multi-national defendant and is still in
the early stages of development. In the event of recovery, Juridica is entitled
to priority repayment of its investment.
2709-E involves a patent portfolio that covers video game controllers. The case
was filed in Q4 2009 against three large, multi-national defendants and is in
the early stages of development. Recently, the plaintiff voluntarily requested
re-examination of two of three patents at issue in the case. This is expected
to result in a delay of 12 to 18 months in concluding the case if it does not
settle prior to trial. In the event of recovery, Juridica is entitled to
priority repayment of its investment.
7508-O involves an equity investment in a broad portfolio of patents in the
mobile communications market. To date, one case has been filed against multiple
defendants. The case is still in the early stages of development. In the event
of recovery, Juridica is entitled to preferred repayment of its investment.
7608-A involves a patent portfolio in the Personal Navigation Device (PND)
market. The case was filed in Q3 2009 against more than 15 defendants and is
still early in the stages of development. In the event of recovery, Juridica is
entitled to preferred repayment of its investment.
6409-V involves a patent that covers video compression technology. The case was
filed in Q1 2010 against 10 defendants and is still in the early stages of
development. This opportunity was brought directly to Juridica by a Fortune 500
client and is represented by an AM Law 100 firm. As reported above, one
defendant recently settled and as a result Juridica will receive approximately
$400,000 in proceeds. In the event of recovery, the Company is entitled to
priority repayment of its investment.
0210-M involves a patent that covers digital media. The case was filed in
August 2010 and is in the early stages of development.
Other Cases
As of 30 June 2010, Juridica has also invested in the following cases:
Case 0408-W involves claims by a group of shareholders against a privately held
company. As reported above, the case recently settled and will have delivered
gross proceeds to Juridica of $3.8 million.
Case 5009-S involves breach of contract and misappropriation of trade secrets
claims in a US federal court. Factual discovery in the case is almost completed
and expert discovery is set to begin. Trial is expected in the second half of
2011.
Case 6509-A involves a significant judgment obtained in an action for breach of
contract, fraud and related claims in a US federal court. Post-trial motions in
the case were decided favourably for the plaintiff in Q4 2009 and the judgment
has been appealed. The appeal is scheduled to be fully briefed by Q3 2010.
Case 1608-T involves two related cases for property damage claims by way of
subrogation. The plaintiffs are several US and UK insurers. The lawsuits have
been moved from trial court to an administrative proceeding as a result of a
settlement involving multiple cases. The administrative proceeding will
determine the plaintiffs' rights to participate in the settlement and the amount
thereof.
Outlook for Remainder of 2010 and Beyond
For the remainder of 2010 the Manager will be locating and proposing investments
for the Company's remaining capital. Several opportunities are already under
development and the Manager expects that these investments will be completed by
the end of 2010. In addition to the Company's existing areas of concentration
in antitrust and patents the Manager will be focusing on diversifying the
portfolio through new subject matters, law firms and jurisdictions including the
UK.
Based on the age and status of the cases in the portfolio, the Manager believes
that some cases in the portfolio could reach a positive conclusion or generate
settlements with some defendants prior to the end of 2010 and will be closely
monitoring the portfolio as the year progresses. Based on the present status of
the cases in the portfolio, the Manager expects that most of the cases (with a
few exceptions) will be completed within the next 36 months and that the next 12
to 15 months could see the completion of several cases including one or more
larger settlements. The Manager remains confident that the portfolio will
generate significant returns for shareholders as the cases reach completion.
+---------------------+--------+--------+-------------+---+----------+
| Richard W Fields | | | | | |
+---------------------+--------+--------+-------------+---+----------+
| Juridica Capital Management | | | | |
| Limited | | | | |
+------------------------------+--------+-------------+---+----------+
| 27 September 2010 |
+---------------------+--------+--------+-------------+---+----------+
JURIDICA INVESTMENTS LIMITED
INDEPENDENT REVIEW REPORT
Introduction
We have been engaged by the directors of the company to review the Group's
unaudited condensed financial statements in the half-yearly financial report for
the six months ended 30 June 2010, which comprises the unaudited consolidated
statement of comprehensive income, the unaudited consolidated statement of
financial position, the unaudited consolidated statement of changes in equity,
the unaudited consolidated cash flow statement and related notes. We have read
the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors of the Company. The directors are responsible for preparing
the half-yearly financial report in accordance with the AIM Rules for Companies
which require that the financial information must be presented and prepared in a
form consistent with that which will be adopted in the Group's annual financial
statements.
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with International Financial Reporting Standards
("IFRS"). The condensed financial statements included in this half-yearly
financial report have been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of consolidated financial statements in the half-yearly financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of the AIM Rules for Companies and
for no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
The maintenance and integrity of the Juridica Investments Limited website is the
responsibility of the directors; the work carried out by us does not involve
consideration of these matters and, accordingly, we accept no responsibility for
any changes that may have occurred to the unaudited condensed financial
statements since they were initially presented on the website.
Legislation in Guernsey governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements 2410, 'Review of half yearly Financial Information Performed by the
Independent Auditor of the Entity' issued by the Auditing Practices Board. A
review of interim financial information consists of making enquiries, primarily
of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed financial statements in the half-yearly financial report for
the period ended 30 June 2010 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 and the AIM Rules for
Companies.
Emphasis of Matter
Without qualifying our conclusion, we draw attention to Notes 2(a), 4, 5 and 6
to the condensed financial statements. As indicated in Notes 2(a), 4, 5 and 6,
the condensed financial statements include non-current assets stated at their
fair value of US$144,031,550. Because of the inherent uncertainty associated
with the valuation of such non-current assets and the absence of a liquid
market, these fair values may differ from their realisable values, and the
differences could be material.
PricewaterhouseCoopers CI LLP
Chartered Accountants
Guernsey
Channel Islands
27 September 2010
+-----------------------------------+-----+-+------------+--------+----------+----------------------+
| JURIDICA INVESTMENTS LIMITED | | | | |
+-----------------------------------------+--------------+--------+----------+----------------------+
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
+---------------------------------------------------------------------------------------------------+
| FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010 |
+---------------------------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| |Notes | For the | | For the period |
| | | period | | from 1 January |
| | | from 1 | | 2009 to 30 June |
| | | January | | 2009 |
| | | 2010 to 30 | | |
| | | June 2010 | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | US$ | | US$ |
+-----------------------------------+-------+---------------------+----------+----------------------+
| INCOME | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Interest income | | 182,609 | | 308,834 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Realised gain on contractual | | 40,610 | | 1,437,260 |
| interests | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Realised gain/(loss) on | | | | (54,704) |
| investments | | - | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Other income/(loss) arising on | 4 | 183,023 | | (566,147) |
| contractual interests | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Other (loss)/income arising on | 6 | (1,303,596) | | 3,408,485 |
| available for sale debt | | | | |
| securities | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | (897,354) | | 4,533,728 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| EXPENSES | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Management fees | | 2,401,996 | | 2,137,812 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Due diligence and transaction | | 596,348 | | 759,884 |
| costs | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Foreign exchange loss | | 224,469 | | 463,263 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Directors remuneration | | 214,714 | | 153,465 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Audit fees | | 196,172 | | 85,124 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Legal expenses | | 161,990 | | 25,967 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Administration fees | | 156,438 | | 134,074 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Advisory fees | | 42,240 | | 32,801 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Marketing expenses | | 21,775 | | 23,528 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Options and warrants costs | | 14,632 | | 13,913 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Registrars fees | | 8,094 | | 8,798 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Bank charges | | 4,290 | | 3,435 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Sundry expenses | | 227,960 | | 139,147 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | 4,271,118 | | 3,981,211 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Comprehensive (loss)/income for | | (5,168,472) | | 552,517 |
| the period | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Comprehensive (loss)/income | | | | |
| attributable to: | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Equity shareholders | | (4,837,002) | | 552,517 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Non-controlling interests | | (331,470) | | |
| | | | | - |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | (5,168,472) | | 552,517 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Earnings per Ordinary Share | | | | |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Basic | Cents | (4.37) | | 0.58 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| Fully diluted | Cents | (4.32) | | 0.58 |
+-----------------------------------+-------+---------------------+----------+----------------------+
| | | | | | | |
+-----------------------------------+-----+-+------------+--------+----------+----------------------+
+----------------------------+----+----+--+--+----------+----------+----------+---------------------+
| JURIDICA INVESTMENTS | | | | | | |
| LIMITED | | | | | | |
+----------------------------+---------+-----+----------+----------+----------+---------------------+
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
+---------------------------------------------------------------------------------------------------+
| AS AT 30 JUNE 2010 | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | 30 June | | 31 December |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | |Notes | | 2010 | | 2009 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | US$ | | US$ |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Non-current assets | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Contractual interests | | 4 | | 40,354,451 | | 36,080,911 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Available for sale | | 5 | | 7,545,805 | | 7,505,521 |
| financial assets | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Available for sale debt | | 6 | | 96,131,294 | | 94,370,855 |
| securities | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | 144,031,550 | | 137,957,287 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Current assets | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Other receivables and | | 7 | | 2,024,059 | | 2,482,888 |
| prepayments | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Cash and cash equivalents | | 9 | | 66,511,040 | | 77,050,345 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | 68,535,099 | | 79,533,233 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Total assets | | | | 212,566,649 | | 217,490,520 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Current liabilities | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Put option | | 8 | | 1,518,022 | | 503,729 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Other payables | | 10 | | 1,199,631 | | 969,662 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Total liabilities | | | | 2,717,653 | | 1,473,391 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Net assets | | | | 209,848,996 | | 216,017,129 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Capital and reserves | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Special reserve | | | | 199,013,730 | | 199,013,730 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Other reserve | | | | (1,735,816) | | (736,155) |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Revenue reserve | | | | 9,706,570 | | 14,543,572 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | 206,984,484 | | 212,821,147 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Non-controlling interests | | | | 2,864,512 | | 3,195,982 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Total equity Shareholders' | | | | 209,848,996 | | 216,017,129 |
| funds | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Number of ordinary shares | | | | 110,701,754 | | 110,701,754 |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| Net Asset value per | | | | $1.8956 | | $1.9513 |
| ordinary share | | | | | | |
+----------------------------+----+-------+--+---------------------+----------+---------------------+
| These half yearly unaudited condensed consolidated financial statements were approved by the |
| Board of Directors on 27 September 2010 and signed on its behalf by: |
+---------------------------------------------------------------------------------------------------+
| | | | | | | |
+----------------------------+---------+-----+----------+----------+----------+---------------------+
| R J Battey | | | | | | |
+----------------------------+---------+-----+----------+----------+----------+---------------------+
| Director | | | | | | |
+----------------------------+---------+-----+----------+----------+----------+---------------------+
| | | | | | | | | |
+----------------------------+----+----+--+--+----------+----------+----------+---------------------+
+-----------+--+----------+--+-----+------------------+----------+----------+----------------+----------+----------------+----------+----------+-----------------+----------+-------------------+
| JURIDICA INVESTMENTS LIMITED | | | | | | |
+--------------------------------------------------------------------------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010 |
+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | 30 June 2010 |
+-----------+--+----------+--------+------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | Special | | Other | | Revenue | | Non-controlling | | |
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | reserve | | reserve | | reserve | | interests | | Total |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | US$ | | US$ | | US$ | | US$ | | US$ |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Balance at 1 January 2010 | 199,013,730 | | (736,155) | | 14,543,572 | | 3,195,982 | | 216,017,129 |
+----------------------------+------------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Changes in equity for 2010 | | | | | | | | | |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Loss for the period | | | | | (4,837,002) | | (331,470) | | (5,168,472) |
| | - | | - | | | | | | |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Total comprehensive income | | | | | (4,837,002) | | (331,470) | | (5,168,472) |
| | - | | - | | | | | | |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Issue of | | | | | | | | | | - | | |
| shares | | | | - | | - | | - | | | | - |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| New issue expenses | | | | | | | - | | |
| | - | | - | | - | | | | - |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Put option provision | | | (1,014,293) | | | | - | | (1,014,293) |
| | - | | | | - | | | | |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Share option payment reserve | | | 14,632 | | | | - | | 14,632 |
| | - | | | | - | | | | |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Dividend paid | | | | | | | - | | |
| | - | | - | | - | | | | - |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| Balance at 30 June 2010 | 199,013,730 | | (1,735,816) | | 9,706,570 | | 2,864,512 | | 209,848,996 |
+----------------------------------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+---------------------+----------------+----------+----------------+----------+----------------------------+----------+-------------------+
| | | | | 30 June 2009 |
+-----------+--+----------+--------+------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | Special | | Other | | Revenue | |Non-controlling | | |
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | reserve | | reserve | | reserve | | interests | | Total |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | US$ | | US$ | | US$ | | US$ | | US$ |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Balance at 1 January 2009 | 150,169,960 | | (261,211) | | 2,444,766 | | | | 152,353,515 |
| | | | | | | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Changes in equity for 2009 | | | | | | | | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Profit for the period | | | - | | 552,517 | | | | 552,517 |
| | - | | | | | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Total comprehensive income | | | - | | 552,517 | | | | 552,517 |
| | - | | | | | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Issue of shares | 51,693,614 | | - | | | | | | 51,693,614 |
| | | | | | - | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| New issue expenses | (2,849,844) | | - | | | | | | (2,849,844) |
| | | | | | - | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Share option payment reserve | | | 13,913 | | | | | | 13,913 |
| | - | | | | - | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Dividend paid | | | - | | (5,069,200) | | | | (5,069,200) |
| | - | | | | | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| Balance at 30 June 2009 | 199,013,730 | | (247,298) | | (2,071,917) | | | | 196,694,515 |
| | | | | | | | - | | |
+----------------------------------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | | | | | | | | | |
+-----------+--+----------+--------+------------------+----------+---------------------------+----------+----------------+---------------------+-----------------+----------+-------------------+
| | | | | | | | | | | | | | | | |
+-----------+--+----------+--+-----+------------------+----------+----------+----------------+----------+----------------+----------+----------+-----------------+----------+-------------------+
+-------------------------------------+----+---------+---------+----------+-----------------+
| JURIDICA INVESTMENTS LIMITED | | | | |
+-------------------------------------+--------------+---------+----------+-----------------+
| UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT |
+-------------------------------------------------------------------------------------------+
| FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010 |
+-------------------------------------------------------------------------------------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | For the | | For the |
| | | period | | period from |
| | | from 1 | | 1 January |
| | | January | | 2009 to 30 |
| | | 2010 to 30 | | June 2009 |
| | | June 2010 | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | US$ | | US$ |
+-------------------------------------+----+-------------------+----------+-----------------+
| Cash flows from operating | | | | |
| activities | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Comprehensive (loss)/income for the | | (5,168,472) | | 552,517 |
| period | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Adjusted for: | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Fair value change on contractual | | 1,120,573 | | (2,904,210) |
| interests and available for sale | | | | |
| debt securities | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Realised gains on contractual | | (40,610) | | (1,405,821) |
| interests | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Increase in share option and | | 14,632 | | 13,913 |
| warrant reserve | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Interest income | | (182,609) | | (308,834) |
+-------------------------------------+----+-------------------+----------+-----------------+
| Foreign exchange losses on | | - | | |
| non-operating activities | | | | 463,078 |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Changes in working capital | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Purchases of contractual interests, | | (7,096,541) | | (23,000,750) |
| available for sale financial assets | | | | |
| and available for sale debt | | | | |
| securities | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Settlement of contractual interests | | 40,610 | | 4,587,692 |
+-------------------------------------+----+-------------------+----------+-----------------+
| Decrease in trade and other | | 458,829 | | 1,912 |
| receivables | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Increase/(decrease) in trade and | | 50,980 | | (244,761) |
| other payables | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Cash used in operations | | (10,802,608) | | |
| | | | | (22,245,264) |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Interest received | | 508,342 | | 308,834 |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Net cash outflow from operating | | (10,294,266) | | |
| activities | | | | (21,936,430) |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Financing activities | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Dividend paid | | - | | (5,335,349) |
+-------------------------------------+----+-------------------+----------+-----------------+
| Issue of shares | | - | | 49,059,970 |
+-------------------------------------+----+-------------------+----------+-----------------+
| Share issue costs | | - | | (234,060) |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Net cash flow from financing | | - | | 43,490,561 |
| activities | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Net (decrease)/increase in cash and | | (10,294,266) | | 21,554,131 |
| cash equivalents | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Cash and cash equivalent at the | 77,050,345 | | 82,511,937 |
| beginning of the period | | | |
+------------------------------------------+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Effect of foreign exchange rate | | (245,039) | | (179,069) |
| changes | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| Cash and cash equivalent at the end | | 66,511,040 | | 103,886,999 |
| of the period | | | | |
+-------------------------------------+----+-------------------+----------+-----------------+
| | | | | | |
+-------------------------------------+----+---------+---------+----------+-----------------+
+-----+--+--+-----+----------+-----+----------+------+----------+----------+-------+----------+-----+----------+------+----------+------------------------------+
| JURIDICA INVESTMENTS LIMITED |
+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010 |
+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| 1. | LEGAL FORM AND PRINCIPAL ACTIVITY |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The Group consists of the Company which is a closed-ended investment company incorporated under The Companies (Guernsey) Law, 2008 ("the Law") and its |
| | wholly owned subsidiaries Riverbend Investments Limited, Somerton Investments LLC and Juridica Ventures KFT. The Law does not make a distinction |
| | between private and public companies. Shares in the Company were admitted to trading on AIM, a market operated by the London Stock Exchange, on 21 |
| | December 2007. The address of the Company's registered office is Bordeaux Court, Les Echelons, St Peter Port, Guernsey, GY1 6AW. The condensed |
| | consolidated interim financial statements have been reviewed, not audited. This consolidated interim financial information has been reviewed, not |
| | audited. |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The principal accounting policies applied in the preparation of the financial statements are set out below. |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | Basis of Preparation |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | These half yearly condensed consolidated financial statements for the six months ended 30 June 2010 have been prepared in accordance with International |
| | Accounting Standard 34: Interim Financial Reporting ("IAS 34"). The condensed consolidated financial statements should be read in conjunction with |
| | the annual Financial Statements for the year ended 31 December 2009 which have been prepared in accordance with International Financial Reporting |
| | Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB"), interpretations issued by the International Financial Reporting |
| | Interpretations Committee ("IFRIC") and applicable legal and regulatory requirements of Guernsey Law. |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| (a) | Accounting policies |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The preparation of financial statements in conformity with IAS 34 requires the use of certain critical accounting estimates. It also requires the |
| | Board of Directors to exercise its judgement in the process of applying the Group's accounting policies. The accounting policies applied are |
| | consistent with those of the annual financial statements for the year ended 31 December 2009, as described in those annual financial statements. |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2010: |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| |- | IFRS 3 - Business Combinations (revised 2008) |
| | | The revisions to IFRS 3 introduced major changes to the accounting requirements for business combinations. The adoption of the revised IFRS 3 did |
| | | not have an impact in the current period financial statements as there were no business combinations during the period |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| |- | IAS 27 - Consolidated and Separate Financial Statements (revised 2008) |
| | | The adoption of the revisions to IFRS 3 noted above require that the revised IAS 27 is adopted at the same time. The revisions introduce changes to |
| | | the accounting requirements for transactions with non-controlling interests and the loss of control of a subsidiary. The Group did not have |
| | | transactions with non-controlling interests in the current period and did not dispose of any of its equity interests in its subsidiaries. Therefore, |
| | | the adoption of the revisions to IAS 27 did not have an impact in the current period's financial statements. |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The following new standards, amendments to standards and interpretations are effective for the period ended 30 June 2010, but are not currently |
| | relevant for the group. |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| |- | IFRS 8 - Operating segments; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 11, IFRIC 2 - Group and share transactions; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 12 - Service concession arrangements; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 13 - Customer loyalty programmes; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 14 - The limit on a defined benefit asset, minimum funding requirements and their interaction; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 15 - Agreements for the construction of real estate; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 16 - Hedges of a net investment in a foreign operation; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 17 - Distributions of non-cash assets to owners; and |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 18 - Transfers of assets from customers. |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| | The following new standards, amendments to standards and interpretations have been issued, but are not yet effective and have not been early adopted: |
+-----+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+------------------+----------+-----+----------+------+----------+------------------------------+
| |- | IAS 1 (amendment), Presentation of Financial Statements. Published: May 2010, effective: 1 January 2011; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IAS 24 (revised), Related Party Transactions. Published: 4 September 2009, effective: 1 January 2011; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IAS 27 (amendment), Consolidated and Separate Financial Statements. Published: May 2010, effective: 1 July 2011; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IAS 34 (amendment), Interim Financial Reporting. Published: May 2010, effective: 1 January 2011; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRS 3 (amendment), Business Combinations. Published: May 2010, effective: 1 July 2010; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRS 9 (amendment), Financial Instruments Classification and Measurement. Published: November 2009, effective: 1 January 2013; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 13 (amendment) Customer Loyalty Programmes. Published: May 2010, effective: 1 January 2011; |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 14 (amendment) Prepayments of a Minimum Funding Requirement. Published: 26 November 2009, effective: 1 January 2011; and |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| |- | IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. Published: 26 November 2009, effective: 1 July 2010. |
+-----+--+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+---------------------+-------+----------+-----+----------+------+----------+------------------------------+
| | | | | | | | | | | | | | | | | |
+-----+--+--+-----+----------+-----+----------+------+----------+----------+-------+----------+-----+----------+------+----------+------------------------------+
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| 3.| SUBSIDIARIES | | | | | | | | | | | | |
+--+--------------+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | | | | | | | | | Date | | % | | 30 | | 31 |
| | | | | | | | | |Incorporated | | Share | | June | | December |
| | | | | | | | | | | |holdings | | 2010 | | 2009 |
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | | | | | | | | | | | | | | | |
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | Riverbend Investment Limited | | 8 | | 92% | | 1 | | 1 |
| | | | October | | | | | | |
| | | | 08 | | | | | | |
+--+--------------------------------------------------+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | Juridica Ventures KFT | | 2 March | | 100% | | 2,200 | | |
| | | | 09 | | | | | | - |
+--+--------------------------------------------------+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | Somerton Investments LLC | | 31 May | | 100% | | 1 | | |
| | | | 09 | | | | | | - |
+--+--------------------------------------------------+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | | | | | | | | | | | | | | | |
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
| | | | | | | | | | | | | | 2,202 | | 1 |
+--+---+-----+----+----------+----------+----------+--+--+--------------+----------+----------+----------+--------------+----------+------------------+
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| 4.| CONTRACTUAL INTERESTS | | | | | | | | | | |
+--+--------------------------------------------------------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | | | Balance | | Additions | | Disposal | | Fair | | Fair | | Realised | | Balance |
| | | | at 1 | | | | proceeds | | value | | value | | (loss) / | | at 30 |
| | | | January | | | | | | movement | | movement | | gain | | June |
| | | | 2010 | | | | | | due to | | due to | | | | 2010 |
| | | | | | | | | | effective | | changes | | | | |
| | | | | | | | | | interest | | in | | | | |
| | | | | | | | | | | | estimated | | | | |
| | | | | | | | | | | | cash | | | | |
| | | | | | | | | | | | flows | | | | |
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ |
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 4,686,616 | | 593,136 | | | | 164,019 | | 116,229 | | | | 5,560,000 |
| | 0108-S/0209-S | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 1,967,839 | | 568,865 | | | | 151,445 | | 911,851 | | | | 3,600,000 |
| | 0408-W | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 699,743 | | 294 | | | | | | 42,612 | | | | 742,649 |
| | 0608-S | | | | | - | | - | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 3,779,881 | | 438,884 | | | | 148,663 | | (844,941) | | | | 3,522,487 |
| | 0708-B | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 11,967,389 | | 4,586 | | | | 360,759 | | (524,494) | | | | 11,808,240 |
| | 0808-C | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 1,624,859 | | | | | | 64,624 | | (381,239) | | | | 1,308,244 |
| | 1608-T | | | - | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 2,426,973 | | 8,304 | | | | 217,509 | | (5,495) | | | | 2,647,291 |
| | 7608-A | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 1,173,092 | | | | | | 597,567 | | (1,066,251) | | | | 704,408 |
| | 2709-E | | | - | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 4,618,445 | | 256,592 | | | | 769,384 | | (1,034,139) | | | | 4,610,282 |
| | 0409-C | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 1,091,425 | | 28,475 | | | | 273,762 | | (45,348) | | | | 1,348,314 |
| | 5009-S | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | | | | | (40,610) | | | | | | 40,610 | | |
| | 6308-F(settled) | - | | - | | | | - | | - | | | | - |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | 2,044,649 | | 443,558 | | | | 372,447 | | (159,347) | | | | 2,701,307 |
| | 6509-A | | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | | | 701,865 | | | | 165,568 | | (94,609) | | | | 772,824 |
| | 6409-V | - | | | | - | | | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Case | | | 1,045,958 | | | | | | (17,553) | | | | 1,028,405 |
| | 0210-M | - | | | | - | | - | | | | - | | |
+--+-----------------+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
| | Totals | 36,080,911 | | 4,090,517 | | (40,610) | | 3,285,747 | | (3,102,724) | | 40,610 | | 40,354,451 |
+--+--------------+--+-----------------+----------+---------------------+----------+------------------+----------+-----------------------+----------+----------------------+----------+------------------------+----------+--------------------+
+--+--------------+--+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | | | Balance | | Additions | | Disposal | | Fair | | Fair | | Realised | | Balance |
| | | | at 1 | | | | proceeds | | value | | value | | (loss) / | | at 31 |
| | | | January | | | | | | movement | | movement | | gain | | December |
| | | | 2009 | | | | | | due to | | due to | | | | 2009 |
| | | | | | | | | | effective | | changes | | | | |
| | | | | | | | | | interest | | in | | | | |
| | | | | | | | | | | | estimated | | | | |
| | | | | | | | | | | | cash | | | | |
| | | | | | | | | | | | flows | | | | |
+--+--------------+--+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | | | US$ | | US$ | | US$ | | US$ | | | | US$ | | US$ |
+--+--------------+--+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | | | | | | | | | | | | | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 1,071,988 | | 3,491,624 | | | | 123,004 | | | | | | 4,686,616 |
| | 0108-S/0209-S | | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 1,156,438 | | 1,169,497 | | | | 169,639 | | (527,735) | | | | 1,967,839 |
| | 0408-W | | | | | - | | | | | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 1,559,215 | | 1,302,879 | | | | | | (2,162,351) | | | | 699,743 |
| | 0608-S | | | | | - | | - | | | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 707,180 | | 1,964,147 | | (750,000) | | 106,277 | | 1,608,773 | | 143,504 | | 3,779,881 |
| | 0708-B | | | | | | | | | | | | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 3,582,877 | | 2,015,824 | | | | 649,190 | | 5,719,498 | | | | 11,967,389 |
| | 0808-C | | | | | - | | | | | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 4,319,371 | | | | (4,337,692) | | | | | | 18,321 | | |
| | 0908-U(settled) | | | - | | | | - | | - | | | | - |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 518,479 | | | | | | 132,279 | | 974,101 | | | | 1,624,859 |
| | 1608-T | | | - | | - | | | | | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | 1,202,804 | | 333,045 | | (2,437,642) | | | | | | 901,793 | | |
| | 6308-F(settled) | | | | | | | - | | - | | | | - |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | | | 2,106,298 | | | | 320,675 | | | | | | 2,426,973 |
| | 7608-A | - | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | | | 867,747 | | | | 305,345 | | | | | | 1,173,092 |
| | 2709-E | - | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | | | 4,275,973 | | | | 342,472 | | | | | | 4,618,445 |
| | 0409-C | - | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | | | 1,087,907 | | | | 3,518 | | | | | | 1,091,425 |
| | 5009-S | - | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Case | | | 2,029,582 | | | | 15,067 | | | | | | 2,044,649 |
| | 6509-A | - | | | | - | | | | - | | - | | |
+--+-----------------+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | | | | | | | | | | | | | | | |
+--+--------------+--+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
| | Totals | 14,118,352 | | 20,644,523 | | (7,525,334) | | 2,167,466 | | 5,612,286 | | 1,063,618 | | 36,080,911 |
+--+--------------+--+-------------------+----------+-------------------+----------+------------------+----------+--------------------------+----------+----------------------+----------+--------------------------+----------+----------------------+
Contractual interests have been accounted for using the effective interest rate
method of calculation. Effective interest rates on these contractual interests
range between 3.62 and 129.39 percent at 30 June 2010. At 30 June 2010 the
Company had investments in 13 contractual interests. The terms of case 0108-S
were amended during the year 2009 as a result of the Company's investment in
Case 0209-S. Although the two cases are separate investments, the value of the
two cases are intrinsically linked and are thus valued together in the above
chart.
Fair value movements of contractual interests are due to amendments in estimated
cash flows arising from changes in expectations surrounding each case. Further
explanation on fair value movements is found within the "Valuation" section of
the Investment Manager's Report.
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| 5.| AVAILABLE FOR SALE FINANCIAL ASSETS |
+--+---------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 30 | | 31 |
| | | | | | | | | | | | | | June | | December |
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | | | | | | | | | | | | | | | |
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Balance at start of | | | | | | 7,505,521 | | 2,400,005 |
| | the period/year | | | | | | | | |
+--+--------------------------+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Additions | | | | | | | | | | | 40,284 | | 5,105,516 |
+--+-----------+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Disposal | | | | | | | | | | | | |
| | proceeds | | | | | | | | | | - | | - |
+--+--------------+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Fair value | | | | | | | | | | |
| | movement | | | | | | | | - | | - |
+--+--------------------+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Realised gains | | | | | | | | | | |
| | | | | | | | | | - | | - |
+--+--------------------+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
| | Balance at end of the | | | | | | 7,545,805 | | 7,505,521 |
| | period/year | | | | | | | | |
+--+--------+--+--+--+--+--+--+----------+------+----------+-+----+-------------------+----------+-----------------+
The Company's Available for Sale Financial Assets include a holding in Juridica
Capital Management Limited ("JCML"). The fair value of the Company's investment
in JCML was assessed as at 30 June 2010 to be $2,400,005 (31 December 2009:
$2,400,005). This static assessment of JCML is deemed appropriate given its
investment in the Company, its level of assets (including intellectual property)
the quality of its income and earnings, based on the minimal change to the
circumstances surrounding JCML.
During 2009, the Company invested $5,105,516 in an entity for the purpose of
expanding its interest in contractual claims. The Company is deemed not to have
significant influence over the entity and hence does not consider the entity an
affiliate. As at 30 June 2010, the carrying value of the Company's investment in
this entity was maintained at cost.
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| 6.| AVAILABLE FOR SALE DEBT SECURITIES |
+--+--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | Balance | | Drawdown | | Repayment | | Movement | | Fair | |Realised | | Balance |
| | | | at 1 | | | | | | due to | | value | | gains | | at 30 |
| | | | January | | | | | | effective | | movement | | | | June |
| | | | 2010 | | | | | | interest | | due to | | | | 2010 |
| | | | | | | | | | | | changes | | | | |
| | | | | | | | | | | | in | | | | |
| | | | | | | | | | | | estimated | | | | |
| | | | | | | | | | | | cash | | | | |
| | | | | | | | | | | | flows | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | Case | 94,370,855 | | 3,064,035 | | | | 5,695,140 | | (6,998,736) | | | | 96,131,294 |
| | 3608-A | | | | | - | | | | | | - | | |
+--+--------+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | Balance | | Drawdown | | Repayment | | Movement | | Fair | |Realised | | Balance |
| | | | at 1 | | | | | | due to | | value | | gains | | at 31 |
| | | | January | | | | | | effective | | movement | | | | December |
| | | | 2009 | | | | | | interest | | due to | | | | 2009 |
| | | | | | | | | | | | changes | | | | |
| | | | | | | | | | | | in | | | | |
| | | | | | | | | | | | estimated | | | | |
| | | | | | | | | | | | cash | | | | |
| | | | | | | | | | | | flows | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ | | US$ |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | Case | 53,433,408 | | 27,487,305 | | (1,500,000) | | 8,878,487 | | 6,071,655 | | | | 94,370,855 |
| | 3608-A | | | | | | | | | | | - | | |
+--+--------+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
| | | | | | | | | | | | | | | | |
+--+----+---+-----------------+----------+-----------------+----------+-----------------+----------+-----------------------+----------+---------------------+----------+----------+----------+--------------------+
Case 3608-A represents the investments associated with the facility in place
between the Company and FSS (see note 13(g)). Fair value movements of Case
3608-A are due to amendments in estimated cash flows arising from changes in
expectations surrounding each investment. Further explanation on fair value
movements is found within the "Valuation" section of the Investment Manager's
Report.
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| 7.| OTHER RECEIVABLES AND PREPAYMENTS |
+--+---------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | | December |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | | | | | | | | | | | | | | | |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | Loan principal repayment | | | | 1,500,000 | | 1,500,000 |
+--+------------------------------------------+----------+-+----------+------------------+----------+--------------+
| | Debtors | | | | | | | | | | | 226,044 | | 648,542 |
+--+---------+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | Prepayments and accrued bank interest | | | | 298,015 | | 334,346 |
+--+------------------------------------------+----------+-+----------+------------------+----------+--------------+
| | | | | | | | | | | | | | | | |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
| | | | | | | | | | | | | | 2,024,059 | | 2,482,888 |
+--+------+--+--+--+--+--+--+----------+------+----------+-+----------+------------------+----------+--------------+
+--+--------------+----+----------+----+----------+----+----------+-----+----------+----+----------+-----+----------+-----+
| 8.| PUT OPTION | | | | | | | | | | | | | |
+--+--------------+----+----------+----+----------+----+----------+-----+----------+----+----------+-----+----------+-----+
In October 2009, the Company sold 8% of the interest in its subsidiary,
Riverbend Investments Limited, to an unaffiliated party (see Note 3). As part
of this transaction, the Company issued a put option to the buyer providing him
with the ability to sell back the shares to the Company at a value based on a
predetermined formula.
The put option has an increasing strike price based on the number of days from
the date of sale of the interest until the third anniversary of the date of
sale. On the third anniversary of the date of sale, the put option will have a
strike price of $7,000,000 and will expire on the following day.
The Company has fair valued the strike price of the put option by calculating
the present value of its maximum stated value from the third anniversary of the
date of sale to 30 June 2010. The resulting amount is reflected on the books as
a non-current liability with an offset to equity.
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | | | | | | | | | | | | | 30 | | 31 |
| | | | | | | | | | | | | | June | | December |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | | | | | | | | | | | | | | | |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | Stated strike price value of put option at expiration date | | | | 7,000,000 | | 7,000,000 |
| | ("Stated Value") | | | | | | |
+--+-----------------------------------------------------------------+----------+----------+----------+-----------------+----------+-----------------+
| | | | | | | | | | | | | | | | |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
| | Fair value of Stated Value at end of | | | | | | 1,518,022 | | 503,729 |
| | period/year | | | | | | | | |
+--+--+------+-----+----------+----+----------+----+----------+------+----------+----------+----------+-----------------+----------+-----------------+
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| 9.| CASH AND CASH EQUIVALENTS |
+--+-------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | | December |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | Cash at | | | | | | | | | | | 66,511,040 | | 77,050,345 |
| | bank | | | | | | | | | | | | | |
+--+----------+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | 66,511,040 | | 77,050,345 |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| 10.| OTHER PAYABLES |
+--+-------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | | December |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | US$ | | US$ |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | Audit | | | | | | | | | | | 214,227 | | 162,200 |
| | fees | | | | | | | | | | | | | |
+--+----------+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | Case | | | | | | | | | | | 883,316 | | 602,367 |
| | addition | | | | | | | | | | | | | |
+--+----------+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | Sundry | | | | | | | | | 102,088 | | 205,095 |
| | creditors | | | | | | | | | | | |
+--+----------------+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | 1,199,631 | | 969,662 |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
| | | | | | | | | | | | | | | | |
+--+-------+--+--+--+--+----------+----+----------+-----+----------+----------+-+------------------+-+-----------------+
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--+----------+------+----------+------------------+
| 11. | COMMITTMENTS & GUARANTEES |
+-----+--------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+----------------+----------+------+----------+------------------+
| | Under the terms of some of its contracts, JIL provides a line of credit to counterparties. As at 30 June 2010, the maximum commitment under |
| | these lines of credit was $11.7 million (31 December 2009: $ 9.5 million). |
+-----+--------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+----------------+----------+------+----------+------------------+
| 12. | FUNCTIONAL AND PRESENTATION CURRENCY / EXCHANGE RATES |
+-----+--------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+----------------+----------+------+----------+------------------+
| | The financial statements are presented in United States Dollar ("US$") which is also the Company's functional currency. The following rate was |
| | applicable as at 30 June 2010. |
+-----+--------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | Closing rate |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------------------------------------+
| | | | | | | | | | | | | | 30 June | | 31 December |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | | | | | | | | | | | | | US$ | | US$ |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | Great Britain pounds (GBP) | | | | | | 1.4944 | | 1.6455 |
+-----+-----------------------------------------------------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--------------------+----------+------------------+
| | | | | | | | | | | | | | | | | | |
+-----+---+-----+----+----------+----+----------+-----------+----------+-----+----------+--+----------+--+----------+------+----------+------------------+
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| 13.| RELATED PARTY TRANSACTIONS |
+--+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | The principals of Juridica Capital Management Limited are Richard Fields and Timothy Scrantom. Each of Tim |
| | Scrantom and Richard Fields, Directors of JCML, acquired 50,000 Ordinary Shares in the Company (0.0625 percent |
| | equity interest each) as reimbursement of 100,000 pounds sterling of pre IPO costs. |
+--+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| (a)| Management | | | | | | | | | | | | |
| | fee | | | | | | | | | | | | |
+--+---------------+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | The Company is managed by Juridica Capital Management Limited, an investment management company incorporated in |
| | Guernsey in which the Company holds a 15 percent equity interest. Under the terms of the Management Agreement, the |
| | Company appointed Juridica Capital Management Limited as an Investment Manager to provide management services to |
| | the Company. The Investment Manager receives a fee based on the adjusted net asset value of the Company, payable |
| | quarterly in advance using the annual rate of 2.5 per cent. The adjusted net asset value is the net asset value of |
| | the Company at the relevant time, after accruing for the annual management fee but not taking into account any |
| | liability of the Company for accrued performance fees and after: |
+--+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | (i) deducting any unrealised gains on investments; |
+--+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | (ii) adding the amount of any write downs with respect to investments which have not been written off; and |
+--+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
| | (iii) deducting the value of the Company's investment in JCML. |
+--+----+-----+----+----------+----+----------+----+----------+------+----------+-----+----------+------+----------+-----+
+-----+---+----------+-----+----------+----+----------+----------+----+----------+----------+----------+------+----------+----------+-----+----------+------+----------+--+-+---------------+
| | In the period to 30 June 2010 management fees totalling $2,401,996 (30 June 2009: $2,137,812) were paid to Juridica Capital Management Limited. As at 30 June 2010 there was a |
| | management fee debtor of $21,172 (31 December 2009: $144,356). |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| (b) | Investment in Juridica Capital Management Limited | | | | | | |
+-----+------------------------------------------------------------------------------------------------------------------+----------+-----+----------+-----------------+----+---------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | The Company acquired 15 percent of Juridica Capital Management Limited on Admission (see Note 5). The investment is measured at fair value. An impairment review has been |
| | performed as part of the fair value assessment and an impairment review will be carried out on an semi-annual basis. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | Juridica Capital Management Limited acquired 1.5 million shares in the Company on Admission and has acquired a further 153,507 shares under the terms of the placing effective on 6 |
| | April 2009 at a price of GBP1.14. As announced on 28 July 2009 these shares have been sold to certain employees of the Investment Manager. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| (c) | Performance fee | | | | | | | | | | | | |
+-----+-----------------------------------------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | The Investment Manager is entitled to a performance fee based on the adjusted net asset value (being the NAV of the Company before taking into account any performance fee payable |
| | less any unrealised gains on investments plus the value of any writedowns in any investments that have been written down but not written off) of the Company. The performance fee |
| | will equal 20 per cent of the annualised increase in the net asset value between a hurdle rate of 8 per cent and 20 per cent, furthermore a fee of 35 per cent of the increase over |
| | a hurdle of 20 per cent and 40 per cent and 50 per cent of the same increase over a hurdle of below 40 per cent. The fees are subject to a high water mark such that no |
| | performance fee will be paid if the performance of the Company does not exceed the net asset value at the end of the previous year in which the performance fee was paid. Payment |
| | of the performance fee is subject to the condition set out in (d), below. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | As at 30 June 2010 the hurdle rate was not achieved, therefore, no performance fee was paid or payable for the period. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| (d) | Trust account |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | Of the performance fee, 50 percent of any payment within the first four years from the date of admission will be retained by the Company in a trust account. During that period |
| | if, at any given year end, the annualised increase in net asset value of the Company is less than 8 percent, the Company may claw back 20 percent of the difference between the |
| | actual net asset value and the net asset value assuming an 8 percent increase from the net asset value for the previous period. As at 30 June 2010 the balance in the trust |
| | account was $ Nil (31 December 2009: $Nil). |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| (e) | Turtle Bay Technologies Limited |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | On 20 November 2008 the Company agreed to provide $1.475 million to a US LLC, a company not related to the Company. $525,000 of this was paid to Turtle Bay Technologies Limited, |
| | a company ultimately owned and controlled by JCML, for services provided by the US LLC by Turtle Bay Technologies Limited. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| (f) | Eleven Engineering Game Control LLC |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+--------------+----------------+---------------+----------+----+----------+----------+----------+-----------------+----------+-----+----------+-----------------+----+---------------+
| | In August 2009, the Company agreed to provide $817,000 to Eleven Engineering Game Control LLC, a company ultimately owned and controlled by JCML. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| (g) | Facility agreement and Collateral Account | | | | | | | | |
+-----+-------------------------------------------------------------------------------------+----------+------+----------+----------------+----------+------+-------------+-----------------+
| | | | | | | | | | | | | | | | |
+-----+---+----------------+---------------+----------+---------------+----------+----------+----------+------+----------+----------------+----------+------+-------------+-----------------+
| | The Company has entered into a facility agreement (the "Facility") with which it agrees to loan to FSS money for funding cases in which FSS is to act under a Co-counsel Agreement. |
| | The Company expects to enter into loan arrangements with other law firms (which may include other law firms established by the Principals) on terms and conditions similar to those |
| | contained in the Facility. The Facility available to FSS will be for up to approximately 50 percent of the net proceeds of the capital raised by the Company less any loans made to |
| | other law firms. The Facility will remain outstanding and available until the earlier of (i) the termination of the Management Agreement, (ii) the date on which Richard Fields and |
| | Tim Scrantom cease to own a controlling interest in FSS, (iii) the winding up of the Company, (iv) an event of default of the Facility documents, or (v) ten years from Admission. |
| | Under the Facility, drawdowns may be requested by FSS from time to time up to the maximum principal amount but subject always to approval by the Company in its sole discretion. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+----------------+---------------+----------+---------------+----------+----------+----------+------+----------+----------------+----------+------+-------------+-----------------+
| | No more than $10 million may be drawn down in respect of the same case investment, unless otherwise approved by the Company. |
+-----+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | | | | | | | |
+-----+---+----------+-----+----------+----+----------+----------+----+----------+----------+----------+------+----------+----------+-----+----------+------+----------+--+-+---------------+
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+------------------+-+----+-+------------------+---+----------+
| | | | | | | | | | | | | | | | |
+-----+--+-----+----+-+--+-+--+-+---+-+----------------------+-+----+-+---------------------------------+
| (h) | Directors' remuneration |
+-----+-------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 30 June | | 30 June |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | 2010 | | 2009 |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | US$ | | US$ |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | | | |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | Lord | | | | | | | | | | 117,653 | | 61,625 |
| | Danniel | | | | | | | | | | | | |
| | Brennan | | | | | | | | | | | | |
+-----+-------------+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | Richard | | | | | | | | | 47,061 | | 47,158 |
| | Battey | | | | | | | | | | | |
+-----+---------------+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | Kermit | | | | | | | | | 50,000 | | 44,682 |
| | Birchfield | | | | | | | | | | | |
+-----+---------------+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | | | |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | 214,714 | | 153,465 |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+----------------------------------------------+---+----------+
| | | | | | | | | | | | | | | | |
+-----+--+-----+----+-+--+-+--+-+---+-+-+-+------------------+-+----+-+------------------+---+----------+
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+--+----------+--+----------+------+----------+------------------------+
| | No pension contributions were paid or were payable on behalf of the Directors. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+--+----------+--------------------+----------+------------------------+
| | Lord Daniel Brennan has an interest in 416,140 shares under a Share Option Agreement, details of which were disclosed in the Admission Document. |
| | The fair value of these options was determined as of the grant date to be $139,138, which is to be provided for over the vesting period of the |
| | options of 5 years. As at 30 June 2010, a provision of $71,244 (31 December 2009: $56,613) has been made for these options. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | The other Directors have no beneficial interest in the share capital of the Company. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| (i) | Cenkos Warrant | | | | | | | | | | | | |
+-----+------------------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | Cenkos Securities plc has an interest in 800,000 shares under a Deed of Warrant Grant at a price of 130p exercisable until 21 December 2012. These |
| | were fair valued as of the grant date at $246,906 (31 December 2009: $246,906) and a full provision has been made for this in the annual financial |
| | statements prepared for the period ended 30 June 2010. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| 14. | SEASONALITY | | | | | | | | | | | | |
+-----+------------------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | The Company's operations are not affected by seasonality or cyclicality and as such they have no impact on the unaudited condensed consolidated |
| | financial statements. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| 15. | SUBSEQUENT EVENTS |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | In August 2010, the Company's investment in case 0408-W came to a full conclusion. A settlement agreement was reached and approved by the court |
| | that will provide for the Company to receive total proceeds of approximately $3.8 million. Funds totaling $2.4 million was received in September |
| | 2010 and the remaining $1.4 million will be received in January 2011. The Company invested a total of approximately $2.8 million in this case. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+----------------+----------+------+----------+------------------------+
| | In September 2010, the Company received proceeds of approximately $400,000 form a partial settlement in case 6409-V. Additional defendants in this |
| | case remain involved in the matter. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | | | | |
+-----+---+-------+------+----------+----+----------+----+----------+------+----------+--+----------+--+----------+------+----------+------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFSIAEIDFII
Juridica (LSE:JIL)
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