REG - Toro Limited - Half-year Report <Origin Href="QuoteRef">TORO.L</Origin> - Part 4
26/05/2017 07:05
- Part 4: For the preceding part double click ID:nRSZ2789Gc
13. Due from and to brokers
31 March 2017 30 September 2016
Due from E E
Collateral and funding cash 10,716,707 7,634,973
Receivables for securities sold 4,868,754 5,349,521
15,585,461 12,984,494
Due to
Payable for securities purchased 577,697 3,501,238
577,697 3,501,238
14. Other receivables and prepayments
31 March 2017 30 September 2016
E E
Prepayments 26,423 24,924
Interest receivable 162,586 -
Other fees 9,917 42,047
198,926 66,971
Notes to the Condensed Unaudited Financial Statements (continued)
15. Accrued expenses
31 March 2017 30 September 2016
E E
Management fee (279,166) (295,214)
Performance fee (2,847,909) (2,837,574)
Administration fee (6,740) (6,665)
Audit fee (19,996) (47,340)
Corporate brokering fee - (35,823)
Sub-Administration fee (18,416) (19,176)
Legal fee - (1,875)
Custodian fee (1,589) -
Other fees (1,808,125) (77,995)
(4,981,941) (3,321,662)
16. Share capital
The authorised share capital of the Company consists of an unlimited number of unclassified shares of no par value. The
unclassified shares may be issued as, (a) Shares in such currencies as the Directors may determine; (b) C Shares in such
currencies as the Directors may determine; and (c) such other classes of shares in such currencies as the Directors may
determine in accordance with the Articles and the Law. Shares will be redeemable at the option of the Company and not
Shareholders.
Assenting Toro Capital I-A and I-B Shareholders were issued roll-over Shares in the Company as an in specie distribution of
the liquidation proceeds to which they were entitled (the "Roll-Over Shares"). In consideration for the issuance of
Roll-Over Shares, the liquidator and the Company entered into a transfer agreement under which the liquidator transferred
to the Company the beneficial interest in the seed assets with a value approximately equal to the aggregate NAV of the Toro
Capital I shares held by the Assenting Toro Capital Shareholders as at the valuation date.
The rights attaching to the Shares are the same as those presented in the Company's latest audited annual financial
statements, a copy of which can be found on our website at www.torolimited.gg
Movements in share capital
Shares outstanding Shares held in treasury Total
As at 30 September 2016 361,450,000 - 361,450,000
Share repurchases in the Period (29,584,396) 29,584,396 -
Performance fee shares issued 1,696,443 (1,696,443) -
As at 31 March 2017 333,562,047 27,887,953 361,450,000
Capital management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern to
provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
To maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets. There are currently no external capital requirements.
17. Segmental reporting
The Board is responsible for reviewing the Company's entire portfolio and considers the business to have a single operating
segment. The Board's asset allocation decisions are based on a single, integrated investment strategy of investing in Asset
Backed Securities and other structured credit investments in liquid markets and the Company's performance is evaluated on
an overall basis.
The Company invests in a diversified portfolio. The fair value of the major financial instruments held by the Company and
the equivalent percentages of the total value of the Company are reported in the Schedule of Investments.
Notes to the Condensed Unaudited Financial Statements (continued)
18. Dividend policy
Subject to compliance with the Companies (Guernsey) Law, 2008 (as amended) and the satisfaction of the solvency test, the
Company intends to distribute income by way of dividends in line with the prospectus on a quarterly basis with dividends
declared in October, January, April and July each year and paid in March, June, September and December. The Company
declared a dividend of 1.50 cents per share for the Period to 31 March 2017; exceeding the target minimum dividend. The
dividend is payable on 2 June 2017.
Under the Companies (Guernsey) Law, 2008 (as amended), companies can pay dividends in excess of accounting profit provided
they satisfy the solvency test prescribed by the Companies Law. The solvency test considers whether a company is able to
pay its debts when they fall due, and whether the value of a company's assets is greater than its liabilities.
19. Derivative financial instruments
The Company holds the following derivative instruments:
CDS
These are derivative contracts referencing an underlying credit exposure, which can either be a single credit issuer or a
portfolio of credit issuers. The Company pays or receives an interest flow in return for the counterparty accepting or
selling all or part of the risk of default or failure to pay of a reference entity on which the swap is written. Where the
Fund has bought protection the maximum potential payout is the value of the interest flows the Company is contracted to pay
until the maturity of the contract.
For short CDS positions, where the Company has sold protection, the maximum potential payout in the event of a default of
the underlying instrument is the nominal value of the protection sold.
The market for CDS may from time to time be less liquid than debt securities markets. Due to the lower amount of cash
required to hold a position in the CDS versus cash bond markets, the opposite has shown to be true during times of market
illiquidity. In relation to CDS where the Company sells protection the Company is subject to the risk of a credit event
occurring in relation to the reference issuer. Furthermore, in relation to CDS where the Company buys protection, the
Company is subject to the risk of the counterparty of the credit default swaps defaulting.
Listed options (equity options)
A listed option is a derivative financial instrument that establishes a contract between two parties concerning the buying
or selling of an asset at a reference price during a specified time frame. During this time frame, the buyer of the option
gains the right, but not the obligation, to engage in some specific transaction on the asset, while the seller incurs the
obligation to fulfil the transaction if so requested by the buyer.
Notes to the Condensed Unaudited Financial Statements (continued)
19. Derivative financial instruments (continued)
Forward foreign currency contracts
Forward foreign currency contracts entered into by the Company represent a firm commitment to buy or sell an underlying
currency at a specified value and point in time based upon an agreed or contracted quantity. The realised/unrealised gain
or loss is equal to the difference between the value of the contract at trade date and the value of the contract at
settlement date/period-end date, and is included in the Consolidated Statement of Comprehensive Income.
The following table shows the Company's derivative position as at 31 March 2017:
Financial assets at fair value Financial liabilities at fair value Notional amount Maturity
Credit Default Swaps E E E
CDS buy protection - (793,799) 16,000,000 20 December 2020
CDS buy protection - (464,548) 4,500,000 20 June 2021
CDS buy protection - (1,792,106) 17,500,000 20 December 2021
CDS buy protection - (101,204) 10,300,000 20 June 2022
CDS buy protection 464,548 - (4,500,000) 20 December 2021
Listed options 27,348 - 27,348 19 January 2018
FX contracts
GBP sell - (808,178) (36,537,188) 14 June 2017
USD sell 22,024 - (13,064,211) 14 June 2017
EUR buy - - 49,601,399 14 June 2017
513,920 (3,959,834) 43,827,348
The following table shows the Company's derivative position as at 30 September 2016:
Financial assets at fair value Financial liabilities at fair value Notional amount Maturity
Credit Default Swaps E E E
CDS buy protection 831,870 - (35,500,000) 20 December 2020
CDS buy protection - (1,327,039) 41,500,000 20 December 2020
CDS buy protection - (360,828) 4,500,000 20 June 2021
CDS buy protection - (320,530) 4,000,000 20 December 2021
Listed options 58,729 - 58,729 21 October 2016
Listed options 12,013 - 12,013 16 December 2016
FX contracts
GBP sell 665,595 - (37,578,533) 14 December 2016
USD sell 18,257 - (12,430,379) 14 December 2016
EUR buy - - 50,008,912 14 December 2016
1,586,464 (2,008,397) 14,570,742
20. Securities sold under agreements to repurchase and securities purchased under agreements to resell
Securities sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to
resell ("reverse repurchase agreements") are treated as collateralised financing transactions. The financing is carried at
the amount at which the securities were sold or acquired plus accrued interest, which approximates fair value. It is the
Company's policy to deliver securities sold under agreements to repurchase and to take possession of securities purchased
under agreements to resell.
As of 31 March 2017, there are no repurchase agreements in place (at 31 March 2016 one repurchase agreement was open for
fair value of (E15.02m)).
Notes to the Condensed Unaudited Financial Statements (continued)
21. Interests in other entities
List of subsidiaries
Taurus Corporate Financing LLP ("the Subsidiary") meets the definition of a subsidiary in accordance with IFRS 10. The
subsidiary is a fully owned subsidiary of the Company and is measured at fair value through profit or loss. The subsidiary
carrying value per the financial statements is shown below:
Carrying value
E
Taurus Corporate Financing LLP 54,966,630
The Board determined that the Subsidiary meets the definition of an investment entity as set out under IFRS 10 and that
therefore the Subsidiary should measure its investments in TCF Loan Warehouse 1 Designated Activity Company and TCF Loan
Warehouse 3 Designated Activity Company (the "Warehouses") at fair value rather than consolidate their results. The
Warehouses are fully owned subsidiaries of the Subsidiary and were measured at fair value through profit or loss.
In accordance with IFRS 12 paragraph 19, the Company is also required to disclose the following information:
(i) Name; Taurus Corporate Financing LLP
(ii) Place of business;
Old Bank Chambers
La Grande Rue
St Martin's
Guernsey
GY4 6RT
(iii) Ownership interests held; 100%
The Company is also required to disclose the following additional information for unconsolidated subsidiaries of a
subsidiary which is an investment entity:
Name: TCF Loan Warehouse 1 Designated Activity Company TCF Loan Warehouse 3 Designated Activity Company
Place of Business: 3rd Floor, 3rd Floor
Kilmore House, Kilmore House
Park Lane, Park Lane
Spencer Dock, Spencer Dock
Dublin 1, Dublin 1
Ireland Ireland
Ownership interests held: 100% 100%
Notes to the Condensed Unaudited Financial Statements (continued)
22. Significant events during the Period and post Statement of Financial Position events
Over the course of the period the Subsidiary made investments of E18m into a new Loan Warehouse, TCF Loan Warehouse 3
Designated Activity Company.
During the period the company has bought back 29,584,396 shares
Following the period end, the Company announced a dividend of 1.5 cents per Ordinary Share for the quarter ending 31 March
2017 which is due to be paid on 2 June 2017. The Company also announced, on 12 May 2017, that its target has been increased
to at least 8 cents per ordinary share per annum, compared to the initial target of 5 cents (annualised) stated in the
prospectus published in connection with the Company's May 2015 IPO.
23. Approval of the financial statements
The financial statements were approved for issue to shareholders by the Directors on 25 May 2017.
This information is provided by RNS
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