Half-year Report

Contents

 

Commodity Exchange Affirmation Statement

Highlights for the period from 1 October 2015 to 31 March 2016 (the "Period")

Corporate Summary

General Information

Chairman's Statement

Portfolio Manager's Report

Statement of Principal Risks and Uncertainties

Independent Review Report to the Members of Toro Limited

Condensed Statement of Comprehensive Income

Condensed Statement of Financial Position

Condensed Statement of Changes in Equity

Condensed Statement of Cash Flows

Notes to the Financial Statements

 

FORWARD-LOOKING STATEMENTS 

This annual report includes statements that are, or may be considered, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "plans", "expects", "targets", "aims", "intends", "may", "will", "can", "can achieve", "would" or "should" or, in each case, their negative or other variations or  comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this annual report, including in the Chairman's Statement. They include statements regarding the intentions, beliefs or expectations of the Company or  the Portfolio Manager concerning, among other  things,  the investment objectives and investment policies, financing strategies, investment performance, results of operation, financial condition, liquidity prospects, dividend policy and  targeted dividend levels of the Company, the development of its financing strategies and the development of the markets in which it,  directly and through special purpose vehicles, will invest in and issue securities and other instruments. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, dividend policy and dividend payments and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document. In addition, even if the investment performance, results of operations, financial condition, liquidity, dividend policy and dividend payments of the Company and the development of its financing strategies are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that may cause differences include, but are not limited to: changes in economic conditions generally and in the structured finance and credit markets particularly; fluctuations in interest and currency exchange rates, as well as the degree of success of the Company's hedging strategies in relation to such changes and fluctuations; changes in the liquidity or volatility of the markets for the Company's investments; declines in the value or quality of the collateral supporting many of  the Company's investments; legislative and regulatory changes and judicial interpretations; changes in taxation; the Company's continued ability to invest its cash in suitable investments on a timely basis; the availability and cost of capital for future investments; the availability of suitable financing; the continued provision of services by the Portfolio Manager and the Portfolio Manager's ability to attract and retain suitably qualified personnel; and competition within the markets relevant to the Company. These forward-looking statements speak only as at the date of this annual report. Subject to its legal and regulatory obligations, the Company expressly disclaims any obligations to update or revise any forward-looking statement (whether attributed to it or any other person) contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. The Company qualifies all such forward-looking statements by these cautionary statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Exchange Affirmation Statement

 

 

 

 

 

Affirmation Required by the Commodity Exchange Act, Regulation §4.7(b)(3)(i)

 

 

I, Loic Fery, representative of the Managing Partner of Chenavari Credit Partners LLP (Commodity Pool Operator of Toro  Limited) hereby affirm that, to the best of my knowledge and belief, the information contained in this interim report and unaudited interim financial statements is accurate and complete.

 

 

 

 

Loic Fery

representative of the Managing Partner

 

25 May 2016

Highlights for the period from 1 October 2015 to 31 March 2016 (the "Period")

 

·      During the Period, the Company's net asset value ("NAV") per Ordinary Share ("Share) decreased by 1.24% (dividends reinvested) to close at 96.31 cents.

 

·      Dividends of 4.0 cents per Share were paid in respect of the Period, with 2.0 cents per Share related to the quarter to 30 September 2015 and 2.0 cents per Share related to the quarter to 31 December 2015. On 25 April 2016 the Company announced a further dividend payment of 2.0 cents per Share for the quarter to 31 March 2016.

 

·      The Company's mid-market share price at 31 March 2016 was 83 cents, representing a discount to NAV of 13.82%.

 

·      The loss for the Period was €4.46 million, or 1.23 cents per Share, taking into account recognition of the following significant items:

 

o  total net loss of €1.93 million.

o  total operating expenses of €2.45 million.

o  finance costs of €0.08 million.

 

·      At 31 March 2016 the Company was 84% invested and its free cash holdings were €60.8 million.

 

 

 

Corporate Summary

For the Period

 

The Company

Toro Limited (the "Company") is a Closed-ended Collective Investment Scheme registered pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (the "Law") and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission (the "Commission").

 

Liquidation of Toro Capital I and roll-over into Toro Limited

Toro Capital I was a "Société En Commandite Par Actions" formed as an open-ended investment company qualifying under Luxembourg law as a Société d'Investissement à Capital Variable with two sub-funds: Toro Capital I-A and Toro Capital I-B.

 

Toro Capital I was placed into liquidation on 30 April 2015 and 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.

 

Initial Public Offering

The IPO of the Company raised gross proceeds of €331.8 million (of which the Roll-Over Shares contributed €184.8 million of the overall gross proceeds) on the issue of 336.8 million Euro denominated shares. The Company's Ordinary Shares (the "Shares") were admitted to trading on the Specialist Fund Segment of the London Stock Exchange ("SFS") and the official list of the Channel Islands Security Exchange Authority Limited ("CISEAL") on 8 May 2015.

 

Investment objective and policy

The investment objective of the Company is to deliver an absolute return from investing and trading in Asset Backed Securities and other structured credit investments in liquid markets, and investing directly or indirectly in asset backed transactions including, without limitation, through the origination of credit portfolios.

 

Target returns and dividend policy

On the basis of market conditions as at the date of the prospectus 28 April 2015, and whilst not forming part of its investment objective or investment policy, the Company will target (i) a NAV total return (including dividend payments) of 12% to 15% per annum over three to five years once the Company is fully invested and (ii) a dividend of 5% per annum payable quarterly in March, June, September and December of each year.  

 

Asset Values

At 31 March 2016, the Company's NAV was €348 million, with the NAV per Share amounting to 96.31 cents. The Company publishes its NAV on a monthly basis. The NAV is calculated as the Company's assets at fair value less liabilities, measured in accordance with International Financial Reporting Standards. 

 

Duration

The Company has an indefinite life.

 

Website

The Company's website address is www.torolimited.gg 

 

Listing Information

The Company's Shares are admitted to trading on the SFS and CISEAL.

 

The ISIN number of the Euro Shares is GG00BWBSDM98 and the SEDOL is BWBSDM9.

 

The closing price of the Shares quoted on the SFS at 31 March 2016 was 83 cents per Share.

 

The average closing price of the Shares over the Period was 92.20 cents per Share.
 

General Information

 

Directors	Registered Office
Frederic Hervouet (Non-executive Chairman)	Old Bank Chambers
John Whittle (Non-executive director)	La Grande Rue
Roberto Silvotti (Non-executive director)	St Martin's
	Guernsey
	GY4 6RT
Portfolio Manager	AIFM
Chenavari Credit Partners LLP	Carne Global AIFM Solutions (C.I.) Limited
1 Grosvenor Place	8th Floor
London	Union House
SW1X 7JH	Union Street
	St Helier
	Jersey
	JE2 3RF
Corporate Broker	Registrar
Fidante Partners Europe Limited, trading as Fidante Capital	Capita Registrars (Guernsey) Limited
1 Tudor Street	Mont Crevelt House
London	Bulwer Avenue
EC4Y 0AH	St Sampson
	Guernsey
	GY2 4LH
Solicitors to the Company (as to English law)	Advocates to the Company (as to Guernsey law)
Gowling WLG (UK) LLP	Mourant Ozannes
4 More London Riverside	1 Le Marchant Street
London	St Peter Port
SE1 2AU	Guernsey
	GY1 4HP
Administrator and Company Secretary	Custodian and Principal Bankers
Morgan Sharpe Administration Limited	J.P. Morgan Chase Bank N.A
Old Bank Chambers	Jersey Branch
La Grande Rue	J.P. Morgan House
St Martin's	Grenville Street
Guernsey	St Helier
GY4 6RT	Jersey
	JE4 8QH
Sub-Administrator	Auditor
Quintillion Limited	Deloitte LLP
24-26 City Quay	Regency Court
Dublin 2	Glategny Esplanade
Ireland	St. Peter Port
D02 NY19	Guernsey
	GY1 3HW

 

Chairman's Statement

 

Introduction

On behalf of the Board, I am pleased to present my report on the Company's progress for the Period.

 

Financial Performance

The Company's shares were admitted for trading on the 8 May 2015. The Company's share price was 83 cents as of 31 March 2016, trading then at a discount to NAV of 13.82%.

 

Over the Period the Company generated a loss of €4.5 million or a loss of 1.23 cents per share.

 

The Net Asset Value per share was 96.31 cents at 31 March 2016.

 

The Company's NAV decreased during the period by 1.24% (dividend reinvested)

 

Dividends  

Since inception, the Company has declared three dividends of 2 cents each. The total dividend for the six months period is 4 cents, to be compared with an annual target of 5 per cent of the Issue Price per Share as set out in the IPO prospectus.

 

Investment Portfolio

During the period, the Portfolio Manager has been actively trading the ABS portfolio of the Company to benefit from market opportunities in the asset class. During the first quarter, the Portfolio Manager tactically increased some exposures while implementing some macro hedges to protect the overall portfolio performance.

During the second quarter, the Portfolio Manager exited some positions and realized some cash amortizations and coupons on existing positions. Despite the realization of some investments and the increase of the cash position of the fund, the general market downward trend in prices has impacted the fund performance, in particular in January and February 2016.

 

For further information on the performance and the portfolio composition, please see pages 8 to 10.

 

Investment Outlook

At the end of March 2016, the Company's cash position was 17.5% and credit sensitivity was reduced through the use of hedging instruments. Although the Portfolio Manager views European structured credit as dislocated and cheap relative to the broader fixed income universe, the sector remains vulnerable to a number of factors, not least being political risks and macroeconomic shocks. As liquidity conditions in the structured market are unlikely to normalise due to regulatory changes, the Portfolio Manager favours capital preservation with a view to becoming an opportunistic buyer of ABS should such exogenous factors materialise and trigger a forced deleveraging.

 

The Portfolio Manager does not anticipate executing the first CLO retention investment related to the "Originator strategy" in the near term as equity arbitrage remains unattractive and will focus on maximising returns under the current Private Asset Backed Finance exposure.

 

For further information on the investment outlook please see page 9.

 

 

 

 

 

 

Frederic Hervouet

Non-executive Chairman

 

25 May 2016

Portfolio Manager's Report

 

Performance

 

During the Period, the Company's NAV decreased by 1.24% (dividend reinvested).

 

The month-on-month performance (dividend reinvested) since inception was the following:

 

Year	YTD	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2015	4.53%					2.06%	0.15%	0.45%	0.64%	0.28%	0.02%	0.52%	0.34%
2016	-2.10%	-0.34%	-2.44%	0.69%

 

 

Since inception, the Company has paid the following dividends:

 

Period ending	Dividend (cents per Share)
30 September 2015	2.00
31 December 2015	2.00
31 March 2016	2.00

 

In relation to the Period, the Company has declared dividends totalling 4 cents to be compared with a twelve-month target of 5 per cent of the issue price (i.e. 5 cents) as per the IPO Prospectus.

 

 

Portfolio breakdown

 

As at 31 March 2016, the Company was 84% invested, gross of repurchase agreements with a total negative value of 4.31% of the NAV.

 

The Net Asset Value allocation per asset class was as follows:

 

Asset class breakdown	31 March 2016 %  NAV	30 September 2015 % NAV
Arbitrage CDO	19.84%	22.22%
Arbitrage CLO	19.31%	27.65%
Residential mortgage-backed security	16.49%	19.41%
Loans	13.14%	3.79%
Commercial mortgage-backed security	3.64%	2.72%
Balance Sheet CLO	4.09%	2.53%
Consumer ABS	4.94%	3.36%
Other	0.14%	0.16%
Repo	(4.31)%	(5.07%)
Cash, Collateral, Hedges and Accruals	22.72%	23.23%
Total	100.00%	100.00%

 

 

 

 

 

 

 

 

 

 

 

Portfolio Manager's Report (continued)

Portfolio breakdown (continued)

 

The geographical breakdown of the underlying assets was as follows:

 

Country breakdown	31 March 2016	30 September 2015
	%  NAV	% NAV
United Kingdom	22.47%	25.18%
Spain	16.68%	15.43%
Germany	8.66%	4.76%
Netherlands	5.93%	7.59%
Italy	3.81%	3.65%
USA	3.60%	2.78%
Ireland	2.87%	2.86%
France	2.94%	2.72%
Norway	1.83%	0.00%
Portugal	1.69%	0.00%
Other Europe	6.12%	7.11%
Other	0.68%	4.69%
Cash, Collateral, Hedges and Accruals	22.72%	23.23%
Total	100.00%	100.00%

 

Activity of the Period

 

The Period can be separated into two through analysis of the changes to the Company's net position.

 

-       From October to December 2015, €80m of ABS was traded, with the Company a net buyer of risk. Over time, this position tactically increased the Company's exposure, taking advantage of technical weakness. Among others, a few UK non-conforming RMBS positions were added with a focus on second pay investment grade tranches, Italian lease mezzanine ABS and a German consumer loans ABS. As the Company's long risk exposure increased during the quarter some hedges were also traded. Performance was modestly positive, due to cash flows and coupons received, while the market weakness continued.

 

-       From January to March 2016, €53m was traded, with the Company a net seller of risk. A number of positions were exited primarily in UK RMBS and CDO of ABS. The Company also benefitted from natural amortisation and coupons on some of the existing positions. While some bonds were purchased, they were relatively small in size: €3.9m increase in a Portuguese SME CLO, one UK RMBS and two CLOs, most on the back of forced seller inquiries. Company performance in January and February was weighed down by markdowns in the portfolio, although some prices started to recover in March.

 

Investment Outlook

 

At 31 March 2016, the Company held 65% in ABS and 16.6% in the Private Asset Backed Finance strategy. The cash position increased during the last quarter to 17.5% and credit sensitivity was reduced through the use of hedging instruments, both measures reflecting a cautious portfolio positioning. Although the Portfolio Manager views European structured credit as dislocated and cheap relative to the broader fixed income universe, the sector remains vulnerable to a number of factors, not least being political risks and macroeconomic shocks. As liquidity conditions in the structured market are unlikely to normalise due to regulatory changes, the Portfolio Manager favours capital preservation with a view to become an opportunistic buyer of ABS should such exogenous factors materialise and trigger a forced deleveraging.

 

The Portfolio Manager does not anticipate executing the first CLO retention investment related to the "Originator strategy" in the near-term, as equity arbitrage remains unattractive and will focus on maximising returns under his current Private Asset Backed Finance exposure.

Portfolio Manager's Report (continued)

Investment Objective and Policy

 

Under the investment objective and policy set out on page 5, the Company will seek to invest in a diversified portfolio of exposures to predominantly European based obligors. The Company's investment strategies will be:

 

The Opportunistic Credit Strategy - the Company will opportunistically invest or trade in primary and secondary market Asset Backed Securities and other structured credit investments including private asset backed finance investments.

 

The Originated Transactions Strategy - the Company will invest in transactions on a buy-to-hold basis, via a variety of means, including, without limitation, Warehouse Credit Facilities, which can originate credits that may be refinanced in structured credit markets as well as other financing opportunities.

 

Gearing

The Company may use borrowings from time-to-time for the purpose of short-term bridging, financing Share buy backs, repurchase agreements with market counterparties, or managing working capital requirements including hedging facilities. Cash borrowings can contribute alongside other forms of leverage to potentially increase the level of gearing of the Company. The Company may also use gearing to increase potential returns to Shareholders. Historically, the Portfolio Manager has employed leverage against senior tranches of ABS to enhance their returns, and anticipates it will continue to do so where the economic terms offered by counterparties can potentially increase  future returns to Shareholders.

 

Post Balance Sheet Events

 

Following the period end, the Company announced a dividend of 2.0 cents per Ordinary share for the quarter ending 31 March 2016 which is due to be paid on 3 June 2016.

 

 

Chenavari Credit Partners LLP

Portfolio Manager

 

25 May 2016

 

 

 

Statement of Principal Risks and Uncertainties

 

Summary

An investment in the Shares is only suitable for institutional investors and professionally advised private investors who understand and are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses (which may equal the whole amount invested) that may result from such an investment. Furthermore, an investment in the Shares should constitute part of a diversified investment portfolio. It should be remembered that the price of securities and the income from them can go down as well as up.

 

The risks set out below are those which are considered to be the material risks relating to an investment in the Shares but are not the only risks relating to the Shares or the Company. Additional risks and uncertainties of which the Company is presently unaware or that the Company currently believes are immaterial may also adversely affect its business, financial condition, results of operations or the value of the Shares. The Directors have undertaken a robust assessment of the principal risks facing the Company and have undertaken a detailed review of the effectiveness of the risk management and internal control systems. The Directors are comfortable that the risks are being appropriately monitored however the documentation to support these processes is still undergoing formalisation.

 

 

Risk	Explanation/Mitigant
Collateral risk (default, recovery, prepayment)	Investment Instruments purchased by the Company are linked to the credit performance of the underlying collateral.  This means that defaults or credit losses in the collateral may adversely impact the performance of the company, the NAV and the value of the Shares.   The Portfolio Manager conducts detailed fundamental, statistical and scenario analyses. Where it is considered desirable, the Company may enter into hedging transactions designed to protect against or mitigate the consequences of single reference obligations defaulting and/or more generalised credit events. Alongside the fundamental credit analysis, the structural features of the transaction are also assessed. This includes a review of the payment waterfall, the subordination of the proposed Investment Instrument, the extent of the reserve fund, the amortisation profile and extension risk.   Where it is considered desirable, the Company may enter into hedging transactions designed to protect against or mitigate the consequences of single reference obligations defaulting and/or more generalised credit events.
Replenishment risk (quality of new reference assets)	The terms of an investment may permit the relevant counterparty to alter the composition of the collateral. The Portfolio Manager will seek to ensure that the investment documents clearly define eligible replacement assets to mitigate the risk of inferior quality assets being added. In certain cases, and to the extent possible in respect of primary investments, the Portfolio Manager may negotiate veto rights for investors on new names being added to the collateral pool.
Bank counterparty risk	Investments may expose the Company to a bank counterparty's credit risk. The terms of such investments will generally include credit rating triggers such that the investment is terminated or accelerated, or other credit support features are activated, if a bank counterparty's credit ratings decline by more than a predetermined threshold. The Company may also enter credit default swaps referenced to a bank counterparty to protect against a bank counterparty's default.
Currency risk	Where investments are undertaken in currencies other than Euro, the Company may also enter into currency hedging transactions.
Call risk	Investments may have call features which, if activated, would result in re-investment risks for the Company. This is mitigated by restricting the situations where an investment can be terminated and/or by requiring that premiums be payable to investors when an investment is called.
Interest rate risk	Investments are generally floating rate investments. In situations where this is not the case, the Company may also (but is not obliged to) enter into interest hedging transactions.
Valuation and classification of financial assets at fair value through profit or loss risk	Investments are valued in accordance with the Company's Valuation Policy which is compiled with reference to key principles comprising; independence, documentation, transparency, consistency and relevance and documents the pricing process and timeline, with particular reference to difficult to value securities, and sets out escalation procedures.   The Board has established a committee to review the valuation of illiquid Investment Instruments, particularly where a valuation is provided by a single counterparty or where the Portfolio Manager's risk officer recommends a more conservative valuation than that provided by a counterparty. The Board requested the Audit Committee to further consider this risk with work undertaken by the Audit Committee as discussed in the 2015 annual financial statements. As a result of the work undertaken by the Audit Committee, the Board is satisfied that the valuation of financial assets at fair value through profit or loss was correctly stated in the Financial Statements.
Portfolio Manager risks	The Company is dependent on the expertise of the Portfolio Manager and their respective key personnel to evaluate investment opportunities and to implement the Company's investment objective and investment policy.    The Board has instructed the Portfolio Manager to conduct the Company's investment related activities in compliance with the applicable law, the Company's investment objectives and guidelines and the Company's contractual obligations.   The Management Engagement Committee carried out its first review of the performance and capabilities of the Portfolio Manager at its meeting on 21 October 2015 and confirmed that the continued appointment of the Portfolio Manager is deemed to be in the interest of shareholders.    There can be no assurance that the Portfolio Manager's past performance will be any guide to future performance or results.
Tax, legal and regulatory risks	Changes in the Company's tax status or tax treatment may adversely affect the Company, and if the Company becomes subject to the UK offshore fund rules there may be adverse tax consequences for certain UK resident Shareholders.   The Company expects that US taxpayers generally would be subject to adverse US tax consequences in respect of their investment in the Shares under US tax rules applicable to passive foreign investment companies ("PFIC"). Accordingly, the acquisition of Shares may not be a suitable investment for U.S. Holders (other than U.S. Holders that are tax-exempt organisations). U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to an investment in Shares.   Guernsey, the Isle of Man, and Jersey have issued guidance notes on intergovernmental agreements to improve tax compliance that the crown dependencies signed in 2013 with the United Kingdom and the United States ("US"). This guidance clarifies the impact on the company, and the Board will take the necessary actions to ensure that the Company is compliant with Guernsey regulations and guidance. For purposes of the US Foreign Accounts Tax Compliance Act, the Company registered with the US Internal Revenue Service ("IRS") as a Guernsey reporting Foreign Financial Institution ("FFI") in June 2014, received a Global  Intermediary Identification Number, and can be found on the IRS FFI list under the following link - http://apps.irs.gov/app/fatcaFfiList/flu.jsf. The Board shall continue to monitor developments with the assistance of its professional advisers.   Changes in the Basel III standards or other changes in the regulation of bank capital adequacy may make bank capital solutions transactions unattractive for Bank Counterparties which may adversely affect the Company.   The AIFMD, of which The Board notes that the transitional period expired on 22 July 2014, seeks to regulate alternative investment fund managers ('AIFMs') established in the EU and prohibits such managers from managing any alternative investment fund (an 'AIF') or marketing shares in such funds to investors in the EU unless the AIFM has been authorised.   The Company, as a Guernsey registered closed ended fund which is not currently actively marketed in the EEA, is not directly impacted by the AIFMD (save for certain consequential effects arising from its appointment of an EU domiciled AIFM, such as the requirement to appoint a depositary). The Board acknowledges that if active marketing is undertaken in the EEA the private placement regime requirements for the relevant jurisdiction would need to be met.   The Board and its advisors have also implemented policies and risk based controls to monitor both the investment and operational risks that impact the Company to facilitate compliance with AIFMD. The Board is cognisant of the European Union's ongoing discussions regarding, inter alia, passporting arrangements for AIFs and ESMA's recommendations as regards to so called "third countries", i.e. non-EU member states. The Board and its advisors monitor developments to ensure continued compliance and to ensure that any potential opportunities are not missed.   The Administrator, Sub-Administrator, Broker and Portfolio Manager provide regular updates to the Board on compliance with the prospectus and changes in regulation.
Operational risks	The Company is exposed to the risk arising from any failures of systems and controls in the operations of the Portfolio Manager, Administrator, the Sub-Administrator and the Custodian. The Board and its Audit Committee regularly review reports from the Portfolio Manager and the Administrator on their internal controls.

 

Statement of Directors' Responsibilities

We confirm to the best of our knowledge that:

 

·      these Condensed Unaudited Interim Financial Statements have been prepared in accordance with International Accounting Standard 34.

 

·      the interim management report (comprising the Chairman's Statement and Portfolio Manager's Report) meets the requirements of an interim management report, and includes a fair review of the information required by:

 

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period from 1 October 2015 to 31 March 2016 and their impact on the Unaudited Interim Financial Statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place during the period from 1 October 2015 to 31 March 2016 and that have materially affected the financial position or performance of the entity during that period.

 

This responsibility statement was approved by the Board of Directors on 25 May 2016 and is signed on its behalf by:

 

 

 

 

 

Frederic Hervouet

Non-executive Chairman

 

Date:       25 May 2016

 

 

 

Independent Review Report to the Members of Toro Limited

 

We have been engaged by the Company to review the financial statements in the interim financial report for the period from 1 October 2015 to 31 March 2016 which comprises the condensed statement of comprehensive income, the condensed statement of financial position, the condensed statement of changes in equity, the condensed statement of cash flows and related notes 1 to 21. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

 

Directors' responsibilities

 

The interim financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as issued by the IASB.

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, 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 (UK and Ireland) 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 set of financial statements in the interim financial report for the period from 1 October 2015 to 31 March 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as issued by the IASB and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

 

 

 

 

Deloitte LLP

Chartered Accountants

Guernsey

25 May 2016