Final Results

RNS Number : 6981G

Clean Energy Brazil PLC

27 October 2008

 



CEB.L

27 October 2008

Clean Energy Brazil plc

('CEB' or the 'Company')

Clean Energy Brazil plc, a specialist investment company focused on participation in Brazil's sugar and ethanol industries, announces its final results for the year to 30 April 2008. 

KEY EVENTS

• Placing of 21.9 million new ordinary shares raising £20.8 million (before expenses)

• Completion of US$64 million investment in Unialco MS

• Completion of improvements and the new thermoelectric plant at Usaciga's Cidade Gaúcha mill

• Progression to a self-managed investment company following termination of the advisory agreement with Temple Capital Partners (TCP)

• Decision to make a fair value adjustment of US$73.4 million to  the investment in Usaciga.

• Initiative undertaken to address working capital challenges and future capital needs at Usaciga

Further enquiries:

Clean Energy Brazil plc Marcelo Junqueira, Chief Executive Officer	Tel: [phone]
Smith & Williamson Corporate Finance Limited (Nominated Adviser) Azhic Basirov / David Jones	Tel: [phone]
Numis Securities Limited (Broker) Hugh Jonathan / Lee Aston	Tel: [phone]
Fishburn Hedges (Financial PR Adviser) Andy Berry Michelle James Dan Bradley [e-mail]	Tel: [phone] [phone] [phone] [phone]

  Chairman's Statement

In the year to 30 April 2008, Clean Energy Brazil continued its investment cycle in Brazil  following our flotation on the AIM market of the London Stock Exchange in December 2006. At that time we raised approximately US$183 million (after expenses), which has been invested in Brazil's sugar and ethanol industries. In December 2007, our investment capacity received a boost with the issue of a second tranche of shares, raising US$39 million (after expenses).

Our investments

CEB invested US$127 million in the Usaciga Group which allowed the Group to expand, beginning with the modernisation of its mill in Cidade Gaúcha in the state of Paraná. We have improved the mill's productivity, and it recorded positive results in the 2007/08 crop season with a net profit of approximately US$5.7 million (at a rate of R$1.86/US$) and EBITDA of US$13.4 million, as opposed to negative results in the previous season. With 1.9 million tonnes of sugar cane crushed in 2007/08, we expect double digit growth in sugar and ethanol production for the 2008/09 crop year. Moreover, a major investment in co-generation was completed in October 2007, which facilitated the commencement of supply to the National Energy Grid of 36,000 MWh/year in the 2007/08 crop season.

The second project at Usaciga is the Rio Paraná greenfield site in Eldorado, Mato Grosso do Sul State. Usaciga has continued to advance the development of this site, which includes approximately 9,000 hectares of plantation and progress has been made with the construction of the sugar mill site.

However, due to tightening credit markets, Usaciga has not raised sufficient funds for the completion of this development and the capital expenditure involved in the development to date has resulted in a significant working capital shortfall and a delay in its opening. Accordingly, Usaciga now needs to raise funds in the short-term to meet its financial obligations. The Company has, therefore, made the decision to stop construction at Rio Paraná until a financial solution has been found. Various potential sources of funding are being considered by Usaciga's management in conjunction with its co-owners, CEB and the Barea family, and Usaciga has retained leading advisory firm, Alvarez & Marsal, to assist with the process. At the same time, Usaciga is evaluating all options in relation to the Rio Paraná development.

In light of the above, CEB has taken the prudent decision to revalue the asset to an estimated fair value of US$50 million. While this is clearly disappointing, we remain convinced of the long-term prospects for Usaciga.

Another key event during the year was CEB's investment in Unialco MS, a company controlling the fully operational Alcoolvale and a greenfield project under construction in Dourados, in the state of Mato Grosso do Sul. This investment was completed with the payment of US$37 million cash and 13.9 million CEB shares. Alcoolvale started its 2008/09 crop season in early April 2008 and has been operating up to the end of September 2008 with more than 87% efficiency, having crushed more than 1.2 million tonnes of sugar cane by that time.

However, the process of securing debt financing for the capital expenditure required for the development of Dourados, which has a planned annual crushing capacity of 2.5 million tonnes, has not been completed yet. The delay in securing this funding is expected to result in an estimated 12 month delay in commencement of operations from the originally planned 2009/10 crop year.

Restructuring

In April 2008, we completed an internal restructuring process to improve management efficiency and focus on the operations of our existing investments. We terminated our advisory agreement with Temple Capital Partners Ltd. (TCP) and acquired Temple Capital Partners Planejamento Empresarial (TCP Brazil), bringing company management in-house. In consideration of the cancellation of this agreement, we issued an additional 11.8 million shares to TCP.

As a result of this restructuring, we have become a self-managed investment company, with Marcelo Junqueira as CEO. Our management team was completed with John Koutras as CFO and Gilberto Mascioli as COO. In addition, Peter Thompson, previously Chairman of TCP, has joined our Board, bringing with him his commercial expertise as a director of the Czarnikow Group. This new structure enables us to rationalise the investment management process and sharpen our focus on our current investment assets.

Outlook

Brazil is a leader in replacing petroleum with ethanol - according to Anfavea (the Brazilian vehicle makers' association), over 90% of the light vehicles manufactured in 2007 were 'flex fuel' - and expert in producing and selling sugar.

The 2007/08 crop season has seen significant increases in production costs, arising mainly from weakness in the US Dollar and higher oil prices. We feel that these costs have peaked and are not foreseeing any major impacts going forward. Notwithstanding the above, the prevailing realisation price and production costs for the current crop season (2008/09) are expected to result in our investee companies not performing as well as in the last crop season. 

The Board does not recommend the payment of dividends to shareholders for the year to 30 April 2008.

The immediate aim of the Company is to resolve its current challenges which have coincided with difficult conditions in financial markets and the Brazilian sugar sector.

We are facing and resolving current challenges and have engaged Merrill Lynch together with Numis as advisers on a capital raising to support our business plan 

Antônio Monteiro de Castro

Chairman of the Board of Directors

24 October 2008

  Operational Review

In the year to 30 April 2008, Clean Energy Brazil (CEB) completed a second placing of 21.9 million new ordinary shares (£20.8 million - US$41 million). Together with our initial placement in the 2006 IPO, we have raised a total of US$222 million in the AIM market. These funds were used initially to acquire 49% of Usaciga for US$127 million in March of 2007 and, in February of this year, we completed the acquisition of 33% of Unialco MS.

After the completion of the Unialco MS acquisition, the CEB Board decided to move to being a self-managed investment company. This decision was based on the need to improve management efficiency and increase the focus on existing assets. Consequently, in April 2008, the Company terminated the advisory agreement with Temple Capital Partners Ltd. (TCP) and acquired Temple Capital Partners Planejamento Empresarial (TCP Brazil), to bring the group management in-house. As consideration, the Company issued an additional 11.8 million ordinary shares to TCP which amounted to a dilution of the existing shares in issue of 8%. This consideration was based on the present value of expected future management fees and performance fees potentially payable to TCP over the remaining life of the advisory agreement. This new self-managed structure enabled the Company to rationalise the investment management process and is designed to sharpen the focus on our current investment assets.

Unialco

In December 2007, the Company announced its acquisition of a stake in Unialco MS, for US$64 million, comprising US$37 million in cash and approximately US$27 million by the issue of 13,863,929 Ordinary Shares as consideration (at a price of 95 pence per share) to Unialco MS.

The Company owns 33% of Unialco MS and Unialco S/A owns 67%. Unialco MS has a 92% interest in Alcoolvale and 80% of the greenfield project under construction in Dourados, in the state of Mato Grosso do Sul.

Alcoolvale in the 2007/08 year crushed 1.5 million tonnes of cane with a mix of 48/52% of sugar/ethanol. For the four month period that we were a shareholder, Unialco MS produced an EBIT of R$1.9 million (US$1.0 million) and a FCF of R$7.9 million (US$4.3 million). In 2008/09 the mill is forecast to process 1.6 million tonnes of crushed cane, an 8.25% increase. The ethanol participation in the mix is expected to grow by two percentage points reaching 54%. Despite increasing the cane crushed volume, realisation prices for sugar and ethanol and the increase in production costs are expected to reduce Alcoolvale's profitability in the current year.

The Dourados greenfield with expected crushing capacity of 2.5 million tonnes will be focused on 100% production of ethanol. The facility is currently forecast to start operation in the 2010/11 crop season with an initial production of 1.2 million tonnes. In addition, the cane supply will be from predominantly leased land, which is in line with our overall operating model. The original start-up date of 2009/10 was pushed back, as the completion of the financial structure was delayed. Currently CEB is working closely with Unialco SA to secure the necessary funding. The agricultural development at Dourados is fairly advanced, with 1 million tonnes of sugar cane expected to be available for the 2009/10 crop season.

Unialco MS receives shared services from Unialco SA. This latter organization is going through an administrative restructuring process in which the operational and administrative models are being adjusted. The new CEO, Francisco Mesquita, is leading the effort and the board believes that positive changes are already taking place.

Usaciga

Usaciga's trading for the year ended 30 April 2008 was in line with the Company's expectations, producing an estimated EBITDA of approximately R$25 million (US$13.4 million at a rate of R$1.86 /US$) on turnover of approximately R$129 million (US$70 million). Usaciga crushed a total of 1.9 million tonnes of sugar cane, representing an increase of about 22% over the prior year. Sugar production rose from 136,000 tonnes in the 2006/07 crop season, prior to CEB´s investment, to 143,000 tonnes in the 2007/08 season. Ethanol production, in turn, rose from 38,000 m³ to 62,000 m³ in the period. We are aiming for a double digit growth in sugar and ethanol production for the 2008/09 crop year. Moreover, a major investment in co-generation was completed in October 2007, which facilitated the commencement of supply to the National Energy Grid equal to 36,000 MWh/year at 2007/08 crop season.

These positive results for the 2007/08 crop season have been achieved against a backdrop of significant increases in production costs, arising mainly from weakness in the US Dollar during the period and higher oil prices. These costs are estimated to have increased over 40%, with fertilizers leading the way with a 60% jump.

Usaciga has continued to advance the development of the Rio Paraná greenfield site, including approximately 9,000 hectares of plantation.  However, due to tightening credit markets, Usaciga has not raised sufficient funds for the completion of this development and, therefore, the capital expenditure involved in the development to date has resulted in a significant working capital shortfall and a delay in its opening. Accordingly, Usaciga now needs to raise funds in the short-term to meet its financial obligations. The Company has, therefore, made the decision to stop construction at Rio Paraná until a financial solution has been found. Various potential sources of funding are being considered by Usaciga's management in conjunction with its co-owners, CEB and the Barea family, and Usaciga has retained leading advisory firm, Alvarez & Marsal, to assist with the process. At the same time Usaciga is evaluating all options in relation to the Rio Paraná development. In light of these developments, Usaciga is currently recruiting suitably experienced and qualified senior personnel including a new chief executive. Going forward, CEB continues to support Usaciga's efforts to resolve the working capital difficulties and to complete the fundraising for the Rio Paraná mill.

Usaciga's long-term growth is supported by its expected 2.5 million tonnes of cane crushing capacity and its geographical position near logistical assets such as the PASA and CPA terminals (port and logistics assets), which gives it an operational advantage.

Pantanal and Agua Limpa

The development plans for these CEB controlled projects have been put on hold as we focus on our primary assets.

Pantanal

This project is licensed and comprises 2,500 hectares of cane field already planted; 3,600 secured and leased for 2009 planting; and a further 750 hectares due from a third party supplier.

Agua Limpa

This project is also licensed and has an initial cane field planted in 2007/08 to be used as seed to expand planting. This initial seed field is 120 hectares of leased land with an irrigation system available.

Financial results

Income in the year at a holding company level was principally comprised of bank interest of US$3.4 million.

Operating expenses amounted to US$7.9 million, comprising investment adviser's fees and other administrative expenses.

In June 2007, the Company paid its maiden dividend of 2.5 pence per share. In December 2007 the Company paid a second dividend of the same amount. This led to a total disbursement of US$10.2 million for the period.

During the financial period, the Company incurred two one-off charges.

Firstly, the termination of the advisory agreement with TCP led to a charge of US$18.4 million based on the market value of the share payment at the date of the agreement.

Secondly, in light of the working capital situation and indebtedness at Usaciga referred to above and the current state of the debt markets, the Board decided to take a very prudent approach to its fair valuation of the investment. It has evaluated the business based on market multiples of cane crushing capacity and realisable values of assets rather than a traditional discounted cash flow basis. The result of this exercise has been negatively impacted by the collapse of the equity markets and in particular Bovespa-listed sugar and ethanol businesses. The Board, supported by an assurance report issued by Nexia Auditores Independentes (Brazil), an independent firm of auditors and consultants, has written down the value of its investment in Usaciga by US$73.4 million to US$50 million.

The result for the period is a loss of US$97.3 million.

The Company ended the period with US$42.8 million of cash (of which US$6.7 million is held in escrow and may in due course be payable to Usaciga pursuant to the December 2006 investment agreement between CEB, Usaciga and the Barea family). Currently, the Company's cash balance stands at approximately US$31 million (on sterling based bank accounts), which includes the above mentioned escrow.

Marcelo Junqueria

Chief Executive Officer

24 October 2008

  Consolidated Income Statement

For the year to 30 April 2008

		2008	2007
			(note 26)
	Notes	$'000	$'000
Bank interest received		3,432	2,662
Sundry income		92	240
Movement in unrealised fair value gain/loss on investments	6	(73,419)	-
Net investment (expense) / income		(69,895)	2,902
Investment adviser's fees	3	(3,422)	(952)
Termination of investment advisory contract	3	(18,389)	-
Other administration fees and expenses	4	(4,512)	(724)
Total administrative expenses		(26,323)	(1,676)
Foreign exchange (loss) / gain		(469)	934
Finance costs		(595)	(35)
(Loss) / Profit for the year / period before tax		(97,282)	2,125
Tax		-	-
(Loss) / Profit for the year / period after tax attributable to equity holders of the parent		(97,282)	2,125
(Loss) / Earnings per share	5	$(0.85)	$0.02

The loss dealt with in the separate financial statements of the Company was $95,663,000 (2007: $3,188,000 profit).

  Consolidated Balance Sheet

As at 30 April 2008

	Notes	2008	2007
		$'000	$'000
Non-current assets
Investments at fair value	6	116,820	93,768
Property, plant and equipment		163	-
Total non-current assets		116,983	93,768
Current assets
Trade and other receivables		1,507	413
Agricultural assets		4,464	-
Cash and cash equivalents		42,823	98,386
Total current assets		48,794	98,799
Total assets		165,777	192,567
Non-current liabilities
Loan from portfolio company		-	(6,730)
Current liabilities
Trade and other payables		(1,459)	(451)
Total liabilities		(1,459)	(7,181)
Net assets		164,318	185,386
Represented by:
Share capital	7	2,920	1,964
Share premium	8	82,584	181,297
Distributable reserves		75,978	2,125
Other reserves		2,820	-
Total equity attributable to equity holders of the Company		164,302	185,386
Minority interest	9	16	-
Total equity		164,318	185,386

  Consolidated Statement of Changes in Equity

For the year to 30 April 2008

Changes in equity for period to 30 April 2007	Share Capital	Share Premium	Distributable Reserves	Other Reserves	Total	Minority Interest	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Share issue proceeds	1,964	194,381	-	-	196,345	-	196,345
Share issue costs	-	(13,084)	-	-	(13,084)	-	(13,084)
Net profit for the period	-	-	2,125	-	2,125	-	2,125
Balance at 30 April 2007	1,964	181,297	2,125	-	185,386	-	185,386
Changes in equity for year to 30 April 2008
Cancellation of share premium	-	(181,297)	181,297	-	-	-	-
Share issue proceeds	956	85,957	-	-	86,913	-	86,913
Share issue costs	-	(3,373)	-	-	(3,373)	-	(3,373)
Net loss for the year	-	-	(97,282)	-	(97,282)	-	(97,282)
Dividends paid	-	-	(10,162)	-	(10,162)	-	(10,162)
Subsidiary acquired	-	-	-	-	-	16	16
Foreign exchange on translation of subsidiaries	-	-	-	2,820	2,820	-	2,820
Balance at 30 April 2008	2,920	82,584	75,978	2,820	164,302	16	164,318

  Consolidated Cash Flow Statement

For the year to 30 April 2008

	Notes	2008	2007
		$'000	(note 26)  $'000
Cash flows from operating activities
(Loss) / Profit for the period before tax		(97,282)	2,125
Adjustments for:
Fair value adjustment		73,419	-
Shares issued for non-cash consideration	3	18,389	-
Finance income and expense		(2,368)	(3,565)
Net goodwill written off		114	-
Changes in working capital
Change in trade and other receivables		(664)	(413)
Change in agricultural assets		(4,464)	-
Change in trade and other payables		815	451
Net cash flows used in operating activities		(12,041)	(1,402)
Cash flows from investing activities
Purchase of investments		(96,711)	(93,768)
Interest income		3,432	2,662
Purchase of fixed assets		(17)	-
Acquisition of subsidiaries, net of cash acquired	9	(241)	-
Net cash flows used in investing activities		(93,537)	(91,106)
Cash flows from financing activities
Proceeds on issue of shares		68,524	196,345
Share issue costs paid		(3,373)	(13,084)
Dividend paid		(10,162)	-
Loan from portfolio company (repaid) / received		(6,730)	6,730
Interest expense and other finance costs		(595)	(31)
Net cash flows generated from financing activities		47,664	189,960
Net (decrease) / increase in cash and cash equivalents		(57,914)	97,452
Cash and cash equivalents at start of period		98,386	-
Foreign exchange gain		2,351	934
Cash and cash equivalents at end of period		42,823	98,386

  Notes to the Financial Statements

For the year to 30 April 2008

1.  General information

The Company is a closed-end investment company incorporated on 19 September 2006 in the Isle of Man as a public limited company. The address of its registered office is IOMA House, Hope Street, Douglas, Isle of Man. 

The Company is listed on the AIM Market of the London Stock Exchange.  

The consolidated financial statements from which this financial information has been extracted have been approved for issue by the Board of Directors on 24 October 2008.

2.    Summary of significant accounting policies

A summary of significant account policies is set out in the Company's financial statements for the year to 30 April 2008.

3.  Investment Adviser's fee

Under the terms of the Investment Advisory Agreement with Temple Capital Partners Limited ('TCP'), TCP received a management fee of 2 per cent per annum of the amount invested plus 0.5 per cent of any cash retained by the Company. The management fee was paid quarterly in arrears and the Investment Adviser also had the right to reimbursement of its expenses (including professional advisers' fees incurred in connection with acquisitions on behalf of the Company). 

TCP was also entitled to a carried interest subject to meeting a minimum return. The hurdle was 8 per cent IRR on the total amount of cash returned on invested amounts. If the hurdle were exceeded then the Investment Adviser was entitled to receive a profit share of 20 per cent of the gain generated by the Group.

The Investment Advisory Agreement was terminated by mutual agreement on 7 April 2008. In consideration for the loss of future management fees and carried interest, the Company issued 11,800,000 new ordinary shares to TCP. This gave rise to a termination cost of $18,389,000 based on the closing market value of the new shares on that date.

4. Expenses

Other administration fees and expenses consist of the following:

	2008	2007
	$'000	$'000
Audit fees	64	60
Insurance	124	25
Pre-operational project costs	1,234	-
Professional fees	1,709	237
Administration costs	431	114
Directors' fees	546	193
Sundry	404	95
Total	4,512	724

Pre-operational project costs are costs associated with initial start-up of the projects in Agua Limpa and Pantanal and consist of consultancy fees, legal and professional fees, travel costs etc. It includes $295,000 incurred by Pantanal Agro Industrial S.A. prior to its acquisition by the Group (see note 9).

5. (Loss) / Earnings per share

Basic (loss) / earnings per share is calculated by dividing the net loss / profit attributable to shareholders by the weighted average number of ordinary shares outstanding during the year.

	2008	2007
Net (loss) / profit attributable to shareholders ($'000)	(97,282)	2,125
Weighted average number of ordinary shares in issue (thousands)	114,519	100,000
Basic (loss) / earnings per share	($0.85)	$0.02

The Company has no dilutive potential ordinary shares, as the market price of the shares has been lower than the exercise price of the warrants throughout the year. Therefore the diluted (loss) / earnings per share is the same as the basic (loss) / earnings per share.

6. Investments

Investments comprise two holdings as follows:

Name	Country of Incorporation	Proportion of ownership interest
Usaciga - Açucar,Álcool E Energia Elétrica SA	Brazil	49%
Unialco MS Participaçoes SA	Brazil	33%

Both investments are considered to be joint ventures. They are, however, not equity accounted, but designated as held at fair value through profit or loss in accordance with a permitted exemption under IAS31. Both investments are stated at fair value, as estimated by the directors. 

The Usaciga investment has been valued by the directors with the assistance of an independent firm of auditors and consultants. The valuation is based on a multiple of the crushing capacity, using recent industry transactions and public data to arrive at the multiple.  

The Unialco investment is carried at cost, which the directors consider to be the fair value, due to its recent acquisition.

	Usaciga	Unialco	Total
	$'000	$'000	$'000
Balance at 1 May 2007	93,768	-	93,768
Additions	29,651	66,820	96,471
Fair value adjustment	(73,419)	-	(73,419)
Balance at 30 April 2008	50,000	66,820	116,820

7. Share capital

The authorised share capital of the Company is £6,000,000 divided into 600,000,000 ordinary shares of £0.01 each.

Movements in issued share capital	Number of shares	Value £'000	Value $'000
Brought forward at 1 May 2007	100,000,000	1,000	1,964
Issued 11 December 2007	35,763,929	357	722
Issued 7 April 2008 (note 3)	11,800,000	118	234
At 30 April 2008	147,563,929	1,475	2,920

All shares are fully paid and each ordinary share carries one vote.

In addition, there are 25,000,000 equity warrants in issue. Each warrant entitles the holder to subscribe in cash for one new ordinary share at £1.00 per share payable in full on subscription The warrants may be exercised in whole or in part at any time prior to 18 December 2011.

Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board manages the Group's affairs to achieve shareholder returns through capital growth and income.

The Company has authority to purchase up to 10% of its own shares on the market, so as to help manage the discount to net asset value at which the shares may trade. No shares were purchased in the year ended 30 April 2008.

Group capital comprises share capital and reserves.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

8. Share premium

The share premium account represents the difference between the issue price of each new share and the par value of £0.01 per share, less share issue costs. On 15 June 2007, the High Court in the Isle of Man approved a reduction in the share capital of the Company which had arisen upon the placing of shares in December 2006, by way of cancellation of the share premium account. The amount cancelled was credited to distributable reserves.  

Further issues of shares created new amounts of share premium as below.

Movements in share premium	$'000
Brought forward at 1 May 2007	181,297
Cancellation of share premium	(181,297)
Shares issued 11 December 2007	67,802
Less share issue costs	(3,373)
Shares issued 7 April 2008 in consideration for termination of contract (see note 3)	18,155
At 30 April 2008	82,584

9. Acquisition of subsidiaries

During the year, the Group acquired 100% of the issued share capital of Pantanal Agro Industrial S.A. and 88% of the issued share capital of Temple Capital Partners Planejamento Empresarial Ltda.

	Pantanal Agro Industrial	TCP Planejamento	Total
	$'000	$'000	$'000
Net assets acquired
Property plant and equipment	53	93	146
Trade receivables	-	190	190
Trade payables	(8)	(185)	(193)
Bank and cash balances	-	35	35
Net assets	45	133	178
Minority interests	-	(16)	(16)
Fair value of net assets acquired	45	117	162
Goodwill	205	(91)	114
Total purchase consideration	250	26	276
Net cash outflow on acquisition
Cash consideration	250	26	276
Bank and cash balances acquired	-	(35)	(35)
	250	(9)	241

The goodwill of $205,000 arising on the acquisition of Pantanal Agro Industrial S.A. has been written-off in the Consolidated Income Statement as part of the pre-operational expenses as disclosed in note 4. 

The negative goodwill arising on the acquisition of Temple Capital Partners Planejamento Empresarial Ltda. has been taken to Sundry Income in the Consolidated Income Statement.

The profit / (loss) of these subsidiaries since acquisition included in the Group Income Statement is:

	$'000
Pantanal Agro Industrial	(490)
TCP Planejamento	-
	(490)

10. Related party transactions

Investment Adviser

Directors had the following interest in Temple Capital Partners Limited ('TCP') which acted as the Investment Adviser to the Company up to 7 April 2008, and as described in note 3.

Marcelo Junqueira and Peter Thompson were directors of TCP. Mr Junqueira is joint owner of Agropecaria Orlando Prado Diniz Junqueira which was also a shareholder in TCP. Mr. Thompson is a director of Czarnikow Group Limited which was also a shareholder in TCP.

As part of the terms of the Placing of shares on Admission, investors were allocated B shares (non-voting shares) in TCP. As a result, directors had interests in the Investment Adviser as follows:

	Number of B shares
Timothy Walker	45
Richard Jewson	90
Marcelo Junqueira	180

Czarnikow Group Limited

Czarnikow Group Limited is a shareholder in the Company and was also a shareholder in TCP throughout the year. In addition, Czarnikow receives fees from Usaciga and Unialco for acting as a physical offtaker of sugar and ethanol and for other services. 

Philip Scales is a director of the Company and of the Administrator. The fees of the Administrator for the year amounted to £85,000.

Acquisition of subsidiary

Marcelo Junqueira had an interest in 94% of the share capital of Temple Capital Partners Planejamento Empresarial Ltda.. On 7 April 2008 the Company acquired 88% of the share capital for a consideration of $26,000. The fair value of the assets of Temple Capital Partners Planejamento Empresarial Ltda. at acquisition was $133,000.

Temple Capital Partners Planejamento Empresarial Ltda. owed Marcelo Junqueira $140,000 as at 30 April 2008.

11. Dividends

The Company declared and paid two dividends of 2.5 pence per share during the year, amounting to US$10,162,000 in total.

 

END

 

 

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