| Tue 17 Nov 2009, 8:00 | | REI - Reinet Investments S.C.A. announces its unaudited results for the six- |
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REI
REI
REI - Reinet Investments S.C.A. announces its unaudited results for the six-
month period ended 30 September 2009
Reinet Investments S.C.A. Depositary Receipts
issued by Richemont Securities AG
(Incorporated in Switzerland)
ISIN: CH0045793657
Depositary Receipt Code: REI
Reinet Investments S.C.A. announces its unaudited results for the six-month
period ended 30 September 2009
HIGHLIGHTS
- Net asset value at 30 September 2009: EUR 2 254 million, an increase of 22%
from 31 March 2009
- Net asset value per ordinary share at 30 September 2009: EUR 11.51
- Profit for the period EUR 406 million
- Investment in Trilantic Funds with future funding commitments of US$ 131
million and EUR 86 million
BUSINESS OVERVIEW
Reinet was created in 2008 to hold the non-luxury assets formerly held by
Richemont S.A. Following shareholder approvals in early October 2008, Reinet was
established as an independent investment vehicle on 20 October 2008. Reinet
initially held the investment in British American Tobacco p.l.c., together with
a portfolio of smaller investments and some EUR 350 million in cash, whilst
Richemont continued to hold the luxury goods businesses. In November 2008,
Reinet distributed 90 per cent of its interest in British American Tobacco
p.l.c. to its shareholders and subsequently effected a rights issue, the
consideration for which was British American Tobacco p.l.c. shares.
Developments during the period under review
In January 2009, Reinet intimated that it was in negotiations to acquire an
interest in the fund management business formerly owned by Lehman Brothers. That
transaction closed in April of this year with an initial investment of US$ 10
million. The fund management business has been re-named Trilantic Capital
Partners.
The investment secured for Reinet the right to participate as a limited partner
in new investments to be made by Trilantic Capital Partners` Fund IV Global and
Fund IV Europe; rights and certain obligations to co-invest with the Trilantic
funds in new investment opportunities; a right to share with the Trilantic
management companies in the carried interest on the realisation of investments
currently under management; together with a residual interest in the value of
the management companies themselves, in the event of a sale or public listing.
Investments made by Reinet in new investments by the two principal funds benefit
from a waiver of management fees and carried interest costs.
In July of this year, Reinet made a further investment of EUR 2.1 million to
acquire limited partner interests in Trilantic Capital Partners Fund IV Europe
and co-investment interests in its portfolio of investments. These additional
interests are subject to management fees payable to the Trilantic management
companies.
Through its investment in Trilantic Capital Partners, Reinet has gained access
to a team of experienced asset managers, committed itself to invest alongside
the current limited partners in new investments to be made by the two funds and
has secured rights to co-invest alongside the funds in new opportunities to be
identified by the fund managers. Reinet`s initial commitment was to invest up to
US$ 131 million and EUR 86 million over the remaining lives of the two funds. As
at 30 September 2009, payments of US$ 0.5 million and EUR 2.1 million had been
made to the funds in respect of these commitments.
Reinet Investments S.C.A. is a partnership limited by shares incorporated in the
Grand Duchy of Luxembourg and having its registered office at 35 boulevard
Prince Henri, L 1724 Luxembourg. It is governed by the Luxembourg law on
securitisation and in this capacity allows its shareholders to participate
indirectly in the portfolio of assets held by its wholly-owned subsidiary Reinet
Fund S.C.A. F.I.S., a specialised investment fund also incorporated in
Luxembourg. Reinet shares are listed on the Luxembourg Stock Exchange and Reinet
South African Depository Receipts are listed in Johannesburg. Reinet shares are
included in the `LuxX` index of the principal shares traded on the Luxembourg
exchange and the South African Depositary Receipts are included in the JSE `Top
40` Share Index.
Consolidated Net Asset Value (`NAV`)
30 September 2009 31 March 2009
EUR m % EUR m %
Listed portfolio
investment
- British American
Tobacco p.l.c. 1 809 80.3 1 470 79.7
Cash and liquid funds 393 17.4 331 17.9
Other investments 48 2.1 47 2.5
Trilantic Capital 12 0.5 - -
Partners
Fees payable and other (8) (0.3) (2) (0.1)
liabilities, net of
other assets
2 254 100.0 1 846 100.0
All of the underlying assets are held by Reinet Fund S.C.A. F.I.S. (`Reinet
Fund`).
As detailed below, the NAV does not include any provision for a performance fee
payable to Reinet Investment Advisors Limited, which is treated as a contingent
liability.
Investment in British American Tobacco p.l.c. (`BAT`)
Reinet remains one of the largest shareholders in BAT with an interest of some
4.2 per cent. At 30 September 2009, the value of the investment in BAT in the
balance sheet of Reinet was EUR 1 809 million or some 80 per cent of Reinet`s
NAV.
Reinet Fund holds some 84 million shares in BAT. Reinet Fund`s NAV has been
positively impacted by the strengthening of the BAT share price from GBP16.13 to
GBP 19.63 over the period. BAT shares are listed principally on the London
market and are denominated in pounds sterling. Although sterling recovered
somewhat against the euro during the period under review, by 30 September 2009
the exchange rate had fallen back to a level close to that of 31 March 2009.
Reinet received dividends from BAT during the period amounting to EUR 84
million.
Cash and liquid funds
Reinet Fund`s cash is held on deposit with banks in Luxembourg and the United
Kingdom. In addition, Reinet Fund has invested EUR 100 million in a euro-
denominated government bond fund. This holds exclusively short-dated bonds
issued by western European governments and short-term loans backed by government
bonds.
Other investments
This portfolio is valued at its fair value of EUR 48 million in the balance
sheet at 30 September 2009, applying the same methodology as at 31 March 2009.
It comprises holdings in young companies with growth potential, together with
investments in specialist investment funds focused on developing markets and
niche sectors.
Trilantic Capital Partners
Reinet Fund has invested the equivalent of some EUR 12 million in funds and
related entities managed by Trilantic Capital Partners. As at 30 September 2009,
Reinet Fund has remaining commitments of US$ 130 million and EUR 84 million to
invest in these funds. The aggregate investment in Trilantic Capital Partners is
carried at cost which is considered to represent the fair value in the net asset
valuation at 30 September 2009.
Fees payable and other liabilities, net of other assets
Fees payable and other liabilities, net of other assets represent the management
fee and other expenses payable. The management fee for the period under review
amounted to EUR 8 million; of this, EUR 5 million remained payable as at 30
September 2009. No provision has been made in these financial statements for any
performance fee payable; the performance fee is treated as a contingent
liability, being payable only at 31 March 2011 at the earliest if certain
conditions are met. For illustrative purposes only, assuming a market price of
the Reinet shares of EUR 9.60 (the market price on 30 September 2009) and
applying the Initial Price, calculated over the trading period from 22 December
2008 to 19 March 2009, of EUR 7.1945, the performance fee payable on 31 March
2011 would be EUR 47 million. Further information on the fees payable is given
in Note 8 to the financial statements in this report.
Summarised consolidated income statement
30 September 31 March
2009EUR m 2009EUR m
Financial income 85 5
Operating expenses and transaction-(11) (9)
related costs
74 (4)
Income from discontinued luxury - 23
activities
Realisation of holding gain on BAT - 530
shares retained
Elimination of cumulative foreign - (55)
currency adjustments in respect of
the holding gain on BAT
Equity accounted share of BAT - 46
results pre-distribution to
shareholders
Unrealised fair value adjustments 337 (66)
- BAT (5) (48)
- Other investments
Profit attributable to 406 426
shareholders
Financial income represents the dividend received from BAT and interest income
received on Reinet Fund`s cash and liquid resources.
Operating expenses include EUR 8 million in respect of the management fee due to
Reinet Investment Advisors Limited (inclusive of the expenses of Reinet Fund
Manager S.A.) for the six months ended 30 September 2009. As stated in the
Reinet Prospectus, the fee in respect of the period ended 31 March 2009 was
waived.
Profit attributable to shareholders for the six-month period amounted to EUR 406
million.
In the comparative period ended 31 March 2009, Reinet`s results were impacted by
transactions linked to the restructuring of Richemont. These included the one-
off holding gain realised when 90% of Reinet`s holding of BAT shares was
distributed to shareholders in November 2008, the equity-accounted share of
BAT`s income for the period from 1 October 2009 up to the date of the
distribution of the shares to shareholders as well as the contribution received
from Richemont`s luxury goods activities held by Reinet during the period from 1
October 2008 to 20 October 2008, when the current Reinet structure was created.
These restructuring-related items are non-recurring and will have no impact on
Reinet`s net income in the future.
Approval
The General Partner confirms that, to the best of its knowledge:
1. The unaudited interim consolidated financial statements have been prepared in
accordance with the applicable accounting standards and give a true and fair
view of the consolidated assets, liabilities, financial position and profit of
the company and its subsidiaries taken as a whole;
2. This report includes a fair review of the development and performance of the
business and position of the company and its subsidiaries taken as a whole.
The unaudited interim consolidated financial statements for the six-month period
ended 30 September 2009 of this interim report were approved by the Board of the
General Partner and signed on its behalf by Joachim Schwenke and Alan Grieve,
directors of the General Partner.
Reinet Investments Manager S.A.
General Partner
17 November 2009
Reinet Investments S.C.A.
Luxembourg
Unaudited Interim Consolidated Financial StatementsFor the six-month period
ended30 September 2009
Consolidated balance sheet
30 31
September2009 March2009
ASSETS Note EUR m EUR m
Non-current assets
Financial assets held at fair 4 1 869 1 517
valuethrough profit and loss
1 869 1 517
Current assets
Trade and other receivables - 2
Financial assets held at fair 4 100 100
valuethrough profit and loss
Cash and cash equivalents 4 293 231
393 333
Total assets 2 262 1 850
EQUITY AND LIABILITIES
Equity
Share capital 220 220
Share premium 770 770
Non-distributable reserve 22 793
Cumulative translation (201) (203)
adjustment reserve
Retained earnings 1 443 266
Total equity 2 254 1 846
LIABILITIES
Current liabilities
Trade and other payables 7 -
Accruals and deferred income 1 4
8 4
Total liabilities 8 4
Total equity and liabilities 2 262 1 850
Consolidated statement of comprehensive income
Six-month period ended
30 31 March
September2009 2009EUR m
Note EUR m
Income
Dividend and investment income 5 84 1
Interest income 5 1 4
Income from associated
undertakings - 46
Other net changes in fair value 4 332 -
of financial assets and financial
liabilities at fair value through
profit and loss
Recognition of holding gain - in - 530
respect of interest in British
American Tobacco p.l.c.
Total income 417 581
Expenses
Custodian, secretarial and 10 3
administration fees
Transaction costs - 3
Other net changes in fair value -
of financial assets and financial 114
liabilities at fair value through
profit and loss
Recycling of cumulative - 55
translation adjustment
Other operating expenses 1 3
Total expenses 11 178
Net result of continuing 6 406 403
operations
Net result of operations - 23
discontinued during the period -
luxury businesses
Profit attributable to the 406 426
shareholders
Other comprehensive income for
the period
- currency translation adjustment 2 128
Total comprehensive income for 408 554
the period
Earnings per share from continuing 7 EUR 2.08 EUR 2.39
operations
- basic and diluted
Earnings per share from 7 EUR 2.08 EUR 2.53
attributable profit
- basic and diluted
Consolidated statement of changes in equity
Equity attributable to equity holders
Equityhol Non Treasury Other
ders` distributab units reserves
capital le reserve
EUR m EUR m EUR m EUR m
Balance at 30 September 1 287 21 ( 298) 145
2008 - unaudited
Income from - - - -
discontinued
operations
Redemption of ordinary ( 642) 215 298 ( 145)
share capital
Equity after capital 645 236 - -
Redemption
Currency translation - - - -
Capital reduction - 90% (557) - - -
ofBAT interest
Transfer to non- - 557 - -
distributablereserve
Capital increase - 460 - - -
Remgro contribution
Rights issue 442 - - -
Recycling of CTA on - - - -
thechange of
accountingtreatment of
BAT
Net result of - - - -
continuingoperations
Balance at 31 March 990 793 - -
2009
Currency translation - - - -
Transfer from non- - (771) - -
distributable reserve
Profit attributable to - - - -
theshareholders
Balance at 30 990 22 - -
September2009 -
unaudited
Equity attributable to equity holders
Cumulative Retained Total
translation earnings
adjustment reserve
EUR m EUR m EUR m
Balance at 30 September ( 331) 6 150 6 974
2008 - unaudited
Income from discontinued - 23 23
operations
Redemption of ordinary (201) (3 051) (3 526)
share capital
Equity after capital (532) 3 122 3 471
Redemption
Currency translation (220) - (220)
Capital reduction - 90% 494 (2 702) (2 765)
ofBAT interest
Transfer to non- - (557) -
distributablereserve
Capital increase - - - 460
Remgro contribution
Rights issue - - 442
Recycling of CTA on 55 - 55
thechange of
accountingtreatment of BAT
Net result of - 403 403
continuingoperations
Balance at 31 March 2009 (203) 266 1 846
Currency translation 2 - 2
Transfer from non- - 771 -
distributable reserve
Profit attributable to - 406 406
theshareholders
Balance at 30 September2009 (201) 1 443 2 254
- unaudited
Minorityinterest Totalequity
EUR m EUR m
Balance at 30 September 2008 - 5 6 979
unaudited
Income from discontinued - 23
operations
Redemption of ordinary ( 5) (3 531)
share capital
Equity after capital - 3 471
Redemption
Currency translation - (220)
Capital reduction - 90% ofBAT - (2 765)
interest
Transfer to non- - -
distributablereserve
Capital increase - - 460
Remgro contribution
Rights issue - 442
Recycling of CTA on thechange of - 55
accountingtreatment of BAT
Net result of continuingoperations - 403
Balance at 31 March 2009 - 1 846
Currency translation - 2
Transfer from non-distributable - -
reserve
Profit attributable to - 406
theshareholders
Balance at 30 September2009 - - 2 254
unaudited
Consolidated cash flow statement
Six-month period ended
30 31
Note September2009 March2009
EUR m EUR m
Cash flows from operating
activities and investing
activities
Purchase of financial assets and 4 (20) (119)
settlement of financial
liabilities
Dividends and investment income 5 84 1
received
Interest received 5 1 4
Operating expenses paid (3) (6)
Net cash generated from (used 62 (120)
in) operating activities
Cash flow related to - (1 131)
discontinued operations and
capital reduction
Net increase (decrease) in cash 62 (1 251)
and cash equivalents
Cash and cash equivalents at 231 1 482
beginning of the period
Cash and cash equivalents at end 293 231
of the period
The notes below are an integral part of these interim consolidated financial
statements.
Notes to the interim consolidated financial statements
1. General information
Reinet Investments S.C.A. (the `Company`) is established in Luxembourg as a
partnership limited by shares (societe en commandite par actions) and is
governed by the Luxembourg law on securitisation. The registered office is at 35
boulevard Prince Henri, Luxembourg.
The Company was formerly known as Richemont S.A. and was a subsidiary of
Compagnie Financiere Richemont S.A. (`CFR SA`), a Swiss company with significant
luxury goods interests. The Company separated from its former parent on 20
October 2008 in a reorganisation, which saw the luxury businesses transferred to
CFR SA. The Company retained Richemont`s former interests in British American
Tobacco p.l.c. together with cash and certain smaller investments.
The Company is managed by Reinet Investments Manager S.A. (the `General
Partner`), a limited liability company established in Luxembourg, which also
owns 1 000 management shares in the Company. The General Partner has unlimited
liability for any obligations of the Company that cannot be met from the assets
of the Company. The registered office is at 35 boulevard Prince Henri,
Luxembourg.
The Company owns the entire ordinary share capital of Reinet Fund S.C.A. F.I.S.
(`Reinet Fund` or `the Fund`), a specialised investment fund established as a
partnership limited by shares (societe en commandite par actions) under the laws
of Luxembourg. In its role as a securitisation vehicle, the Company permits its
shareholders to participate in the Fund.
Reinet Fund is managed by Reinet Fund Manager S.A. (the `Fund Manager`), a
limited liability company established in Luxembourg, which also owns 1 000
management shares in the Fund. The Fund Manager is the general partner in the
Fund, with unlimited liability. The address of its registered office is 35
boulevard Prince Henri, Luxembourg.
Reinet Fund`s objective is to generate significant long-term capital growth. It
aims to achieve this objective by investing over time in a diversified portfolio
of securities. The Fund may also seek partners with whom it may co-invest. The
Fund is advised by Reinet Investment Advisors Limited under the terms of the
Investment Advisory Agreement.
These interim consolidated financial statements have been approved for issue by
the Board of Overseers on 9 November 2009 and by the Board of Directors of the
General Partner on 12 November 2009.
2. Basis of preparation
These interim consolidated financial statements have not been audited.
This interim financial information for the half year ended 30 September 2009 has
been prepared in accordance with IAS 34, Interim Financial Reporting. The
interim financial report should be read in conjunction with the annual
consolidated financial statements for the period ended 31 March 2009, which have
been prepared in accordance with IFRS as adopted by the European Union.
Comparative figures presented are as at and for the six months ended 31 March
2009. As mentioned in Note 1, the Company was established in its present form in
October 2008 and as such the financial statements for the six months ended 31
March 2009 form a better basis of comparison than those in respect of the period
ended 30 September 2008. It should be noted, however, that the figures for the
six-month period ended 31 March 2009 include certain specific, non-recurring
items linked to the restructuring.
Where necessary, comparative figures have been adjusted to conform with changes
in presentation in the current period.
3. Accounting policies
The accounting policies adopted are consistent with those described in the
annual consolidated financial statements for the period ended 31 March 2009.
The following new standards and amendments to standards have been implemented
for the financial year beginning 1 April 2009:
- IAS 1 (revised), "Presentation of financial statements". The new presentation
required by IAS 1 (revised) has been applied in these interim financial
statements.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 April 2009, but
are not currently relevant or have very little impact on the Company:
- IAS 23 (amendment), "Borrowing costs";
- IAS 32 (amendment), " Financial instruments: Presentation";
- IAS 39 (amendment), " Financial instruments: Recognition and measurement";
- IFRIC 13, "Customer loyalty programmes";
- IFRIC 15, "Agreements for the construction of real estate";
- IFRIC 16, "Hedges of a net investment in a foreign operation";
- IFRS 2 (amendment), "Share-based payment".
The following amendment has been issued, but is not effective for the financial
year beginning 1 April 2009 and has not been early adopted in these financial
statements:
- IFRS 3 (revised) "Business combinations" and consequential amendments to IAS
27, "Consolidated and separate financial statements", IAS 28, "Investments in
associates" and IAS 31, "Investments in joint ventures", effective prospectively
to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 July
2009. Management is assessing the impact of the new requirements regarding
acquisition accounting, consolidation and associates on the group;
4. Financial assets held at fair value through profit and loss
30 September 31
2009EUR m March2009E
UR m
Financial assets held at fair value through
profit and loss - non current:
- Listed equity securities 1 812 1 472
- Unlisted equity securities 45 45
- Private equity investments 12 -
Total financial assets held at fair value
through profit and loss - non current 1 869 1 517
Financial assets held at fair value through
profit and loss - current
- Investment in money market funds 100 100
Total financial assets at fair value 1 969 1 617
through profit and loss
Net changes in fair value of financial
assets at fair value through profit and
loss:
- Realised - -
- Unrealised 332 (114)
Total gains (losses) 332 (114)
The movement in non-current financial assets at fair value through profit and
loss may be summarised as follows:
Non-current financial assets EUR m
Balance at 30 September 2008 82
Distributed to shareholders as part of the ordinary
share capitalredemption on 20 October 2008 (6)
Transfer from investment in associates - BAT 307
Recognition of holding gain on BAT shares retained 530 837
Contribution of BAT shares by Remgro Limited 460
Rights issue - BAT shares contributed 442
Investments in non current assets 19
Fair value movements (114)
Exchange movements (203)
Balance at 31 March 2009 1 517
Investments in non current assets - equity securities 8
Investments in non current assets - private equity 12
investments
Fair value movements 336
Exchange movements (4)
Balance at 30 September 2009 1 869
Current financial assets EUR m
Balance at 31 March 2009 100
Investment in money market funds -
Balance at 30 September 2009 100
Investments in money market funds relate to an investment in shares of the JP
Morgan Euro Government Liquidity Fund. The portfolio of the fund as at 30
September 2009 and 31 March 2009 consists of short term (i.e. with maturities of
less than one year) euro denominated fixed and floating rate debt securities
issued by European governments and repurchase agreements with highly rated
counterparties. Such repurchase agreements are fully collateralised by euro
denominated securities issued by the issuers described above with no maturity
constraints. This is to ensure liquidity on demand as the shares in the fund are
callable on a daily basis. Distributions from this fund are disclosed as
dividend income. These instruments carry very low risk and provide daily
liquidity but cannot be classified as cash and cash equivalents as the
individual instruments held by the fund do not meet the criteria of IAS 7. These
investments are considered to be equity instruments categorised as financial
assets at fair value through profit and loss. The value of the investment
corresponds to the net asset value of the instruments held by the fund as it is
the best indicator of the fair value at the balance sheet date.
5. Financial income and expense
30 31
September2009EU March2009EUR
R m m
Interest income arising from cash and 1 4
cash equivalents
Dividend and investment income 84 1
85 5
During the six months ended 30 September 2009, Reinet Fund received a final
dividend in respect of the 2008 financial year of EUR 58.8 million (? 51.9
million) and an interim dividend for 2009 of EUR 25.5 million (? 23.5 million)
from BAT.
During the period ended 31 March 2009, the Company did not recognise any
dividend income from BAT as BAT`s final dividend for the year ended 31 December
2008 was only approved by its shareholders on 30 April 2009.
6. Net result of continuing operations
The net result of EUR 406 million for the period under review is not directly
comparable to that of the period ended 31 March 2009. The prior period contained
a number of non-recurring items linked principally to the restructuring effected
last year. Excluding non-recurring items from the results of the comparative
period, the result of continuing operations would have been a loss of EUR 116
million. This reflected principally mark to market losses of EUR 114 million in
respect of the investment in BAT and other investments.
The result for the period under review of EUR 406 million includes unrealised
mark to market gains in respect of BAT and other investments of EUR 332 million.
7. Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) for the
period by the weighted average number of ordinary shares in issue during the
period.
30 31 March
September2009EUR 2009EUR m
m
Profit for the period from continuing 406 403
operations
Profit for the period from - 23
discontinued operations
Weighted average number of ordinary 168.6
shares in issue (millions of shares) 195.9
Earnings per share from continuing EUR 2.08 EUR 2.39
operations
- basic and diluted (EUR per share)
EUR 2.08 EUR 2.53
Basic earnings per share from
attributable profit
- basic and diluted (EUR per share)
The Company has not issued any shares or other instruments that are considered
to have dilutive potential during the period ended 30 September 2009.
For the period ended 31 March 2009 the weighted average number of shares is
calculated by reference to the number of shares in issue post the distribution
of the luxury goods assets and BAT shares to shareholders. Movements thereafter
include the issue of shares following the contribution by Remgro of BAT shares
in November 2008 and the rights issue, which concluded in December 2008.
Earnings per share for the period ended 30 September 2009 were lower than in the
comparative period. Although earnings, including one-off items were broadly in
line, the weighted average number of ordinary shares in issue during the period
under review was significantly higher.
As mentioned in Note 6, the earnings per share figures for the period under
review and the comparative period are not directly comparable.
8. Related-party transactions
Reinet has a number of relationships and transactions with related parties, as
defined by IAS 24 - Related Party Transactions, all of which are undertaken in
the normal course of business. Parties identified as related parties are:
Former parent company - CFR SA
Reinet began operations in its current form on 20 October 2008, having
transferred its luxury assets to its former parent, CFR SA. Further details of
the restructuring are given in Note 1 to the annual consolidated financial
statements for the period ended 31 March 2009. In the context of the
restructuring, therefore, CFR SA is regarded as a related party, as are its
subsidiary companies.
Although the management of Reinet is quite distinct from Richemont following the
restructuring effected in 2008, a number of executives who have management
responsibilities for Reinet continue to have executive roles in and are employed
by Richemont. CFR SA has charged an applicable share of the cost of the
executives to the General Partner and the Fund Manager, and hence indirectly to
the Company and the Fund, in respect of the periods ended 30 September 2009 and
31 March 2009. CFR SA is not responsible in any way for the services provided by
the executives concerned to Reinet.
Significant shareholders
Mr Johann Rupert, Chairman of the General Partner and the Fund Manager is a
trustee of the Anton Rupert Trust.
Details of shareholdings by the Anton Rupert Trust and parties affiliated with
it, including Mr Johann Rupert in his personal capacity, were provided in the
Reinet Annual Report 2009. There have been no changes during the period under
review.
On 23 October 2008, the Public Investment Corporation (`PIC`) notified the
Company that it held 6.06 per cent of the shares and voting rights in the
Company. This was prior to the partial capital reduction by way of the
distribution of BAT shares to shareholders on 3 November and the rights issue
which was completed in December 2008. On 12 August 2009, PIC notified the
Company that it held 10.66 per cent of the shares and voting rights in the
Company.
Management companies
The Company is managed by its General Partner, Reinet Investments Manager S.A.
The Company reimburses the General Partner for its expenses incurred in the
ordinary course of business, including but not limited to the remuneration of
its staff, taxes, rentals, directors` fees and any other disbursements and pays
an annual administration fee equal to 10 per cent of such expenses. During the
period ended 30 September 2009, the Company paid EUR 0.7 million (31 March 2009
- EUR 0.5 million) to the General Partner in respect of the costs that it had
incurred and the related administration fee.
The Company`s wholly-owned subsidiary, Reinet Fund, is managed by the Fund
Manager, Reinet Fund Manager S.A. Reinet Fund reimburses the Fund Manager for
its expenses incurred in the ordinary course of business including but not
limited to the remuneration of its staff, taxes, rentals, directors` fees and
any other disbursements. Any such amounts payable to the Fund Manager are
deductible from any management fees payable to Reinet Investment Advisors
Limited in respect of any accounting period.
The management fee is payable at a rate of one per cent per annum of the NAV of
the Fund which is attributable to the consolidated assets of the Fund excluding
cash and interests in funds managed by third parties. The management fee in
respect of cash is calculated at a rate of one quarter of one per cent per
annum.
During the six-month period ended 30 September 2009 the management fee payable
to Reinet Investments Advisors Limited (inclusive of the expenses reimbursed to
Reinet Fund Manager S.A.) amounted to EUR 7.8 million.
Pursuant to the Investment Advisory Agreement, the performance fee will be
payable to Reinet Investment Advisors Limited for the first time as of 31 March
2011 if certain conditions are met. Any fee payable will only be determined at
that date. The performance fee in any period is to be calculated as 10 per cent
of the Cumulative Total Shareholder Return at the end of the Performance
Measurement Period, less the sum of all performance fees paid in previous
Performance Measurement Periods. The Cumulative Total Shareholder Return will be
the difference between the volume weighted average closing price of the Reinet
share on the Luxembourg Stock Exchange over the last 20 trading days of each
financial year of the Company less the Initial Price, calculated as the volume
weighted average market price of the share on the Luxembourg Stock Exchange over
the first 60 trading days following the third day after the conclusion of the
rights issue in December 2008 multiplied by the number of shares outstanding at
the beginning of each measurement period plus the total of all distributions
(including dividends and returns of capital) made to shareholders from the
initial date to the end of the performance measurement period.
No performance fee is currently payable. For illustrative purposes only,
assuming a market price of the Reinet shares of EUR 9.60 (the market price on 30
September 2009) and applying the Initial Price, calculated over the trading
period from 22 December 2008 to 19 March 2009, of EUR 7.1945, the performance
fee payable on 31 March 2011 would be EUR 47 million.
During the comparative period ended 31 March 2009, no management fee or
performance fee was payable to Reinet Investment Advisors Limited as that
company has waived its entitlement to a management fee for the period up to 31
March 2009 and the first performance fee is only to be calculated as of 31 March
2011. The expenses incurred by the Fund Manager during this period to 31 March
2009 were reimbursed in full by the Fund. These amounted to EUR 1.3 million for
the period.
Other related parties
In addition to CFR SA, the General Partner, the Fund Manager together with their
respective Boards of Directors and the Board of Overseers, Reinet has identified
the following other related parties:
- Remgro Limited, a public company incorporated in South Africa;
- V&R Management Services, a company incorporated in Switzerland which is owned
by Remgro Limited.
9. Capital commitments
At 30 September 2009, the Group had committed to invest a further EUR 15 million
in unlisted undertakings. In addition the Group has committed to invest a
further US$ 130 million and EUR 84 million in its private equity investments
linked to Trilantic Capital Partners over the next seven years.
10. Subsequent events
There have been no events subsequent to 30 September 2009, which would have any
material impact on these interim consolidated financial statements.
Exchange rates
Exchange rates against the euro Six months to30 Six months
September2009 to31 March2009
Average for the period
pound sterling 0.8753 0.8760
U.S. dollar 1.3967 1.3135
Swiss franc 1.5164 1.5108
Closing - as at the end of the
period
pound sterling 0.9148 0.9248
U.S. dollar 1.4636 1.3249
Swiss franc 1.5164 1.5099
Share information
Reinet Investments S.C.A. shares are listed on the Luxembourg Stock Exchange
with the ISIN number LU0383812293. Thomson Reuters code REIT.LU and Bloomberg
code REIN.LX.
Reinet Investments S.C.A. South African Depository Receipts are traded on the
stock exchange in Johannesburg under the ISIN number CH 0045793657. Thomson
Reuters code REIJ.J and Bloomberg code REI.SJ.
Statutory Information
Registered Office
35 boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg
Telephone : +352 22 42 10
REGISTERED NUMBER
Reinet Investments, Societe en commandite par actions
Registre de commerce et des societes, Luxembourg B 16.576
GENERAL PARTNER
REINET INVESTMENTS MANAGER S.A.
35 boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg
Telephone : +352 22 42 10
Internet site: www.reinet.com
Email : info@reinet.com
(C) Reinet Investments S.C.A. 2009
17 NOVEMBER 2009
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 17/11/2009 08:00:01 Produced by the JSE SENS Department.
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