NewSmith Opportunities International Fund Limited

NewSmith Opportunities

International Fund Limited

Report and financial statements

For the year ended 31 December 2012

NewSmith Opportunities International Fund Limited

Contents

1

Page

Company information 2

Statement of directors’ responsibilities 4

Report of independent auditors 5

Statement of assets and liabilities 6

Statement of operations 7

Statement of changes in net assets 8

Statement of cash flows 9

Notes to the financial statements 10


Company information

2

Directors Ronald J Carlson

Christopher V Greetham*

John G Heimann*

Dominic C La Valla*

Paul D Roy

Clifford J Shaw*

* Independent directors

Registered address PO Box 309

Ugland House

South Church Street

Grand Cayman KY1-1104

Cayman Islands

Manager NewSmith Capital (Cayman) Limited

PO Box 309

Ugland House

South Church Street

Grand Cayman KY1-1104

Cayman Islands

Investment manager NewSmith Asset Management LLP

Lansdowne House

57 Berkeley Square

London W1J 6ER

United Kingdom

Administrator and transfer agent Citco Fund Services (Ireland) Limited

Custom House Plaza, Block 6

International Financial Services Centre

Dublin 1

Ireland


Company information

3

Listing sponsor Bordeaux Services (Guernsey) Limited

PO Box 466

Les Echelons

St Peter Port

Guernsey

Channel Islands

GY1 6AW

Legal advisors (As to Cayman Islands Law)

Maples and Calder Europe

7 Princes Street

London EC2R 8AQ

United Kingdom

(As to United States Law)

Schulte Roth & Zabel LLP

919 Third Avenue

New York NY 10022

USA

Auditors PricewaterhouseCoopers

Chartered Accountants and Registered Auditors

One Spencer Dock

North Wall Quay

Dublin 1

Ireland


Statement of directors’ responsibilities

4

The directors are responsible for the preparation of financial statements for each financial year

which give a true and fair view of the Company’s state of affairs as at the end of the year and the

results of operations for the year then ended.

In preparing those financial statements, the directors are required to:

• Ensure that the financial statements comply with the Memorandum and Articles of

Association and accounting principles generally accepted in the United States of America;

• Select suitable accounting policies and then apply them on a consistent basis;

• Make judgements and estimates that are reasonable and prudent; and

• Prepare the financial statements on the going concern basis unless it is not appropriate to

presume that the Company will continue in business.

The directors are responsible for keeping proper accounting records, for safeguarding the assets

of the Company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

On behalf of the board of directors

Director Director

21 March 2013


Statement of assets and liabilities as at 31 December 2012

See notes to the financial statements and attached financial statements of NewSmith Opportunities Fund LP and NewSmith Opportunities Private Equity Fund LP

6

2012 £ Note Assets Cash and cash equivalents 2 33 Investment in NewSmith Opportunities Fund LP 4 4,721,815 Total assets 4,721,848 Liabilities Audit fees payable 6,090 Professional fees payable 2,984 Total liabilities 9,074 Net assets attributable to holders of ordinary shares 4,712,774

Share class Shares outstanding Net asset value

per share

GBP Class A Ordinary shares 20,988.11 £78.32 GBP Class B Ordinary shares 39,184.89 £78.32


Statement of operations for the year ended 31 December 2012


7

2012 £ Net investment expense allocated from NewSmith Opportunities Fund LP Expenses (2,610) Net investment expense allocated from NewSmith Opportunities Fund LP (2,610) Company investment expenses Audit fees 5,222 Legal fees 2,106 Professional fees 2,984 Other expenses 8,614 Company investment expenses 18,926 Net investment expense (21,536) Net realised losses and change in unrealised depreciation on securities allocated from NewSmith Opportunities Fund LP Net realised loss on securities (7,666)Net change in unrealised depreciation on securities (79,049) Net realised losses and change in unrealised depreciation on securities allocated from NewSmith Opportunities Fund LP (86,715) Net decrease in net assets resulting from operations (108,251)


Statement of changes in net assets for the year ended 31 December 2012


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2012 £ Net investment expense (21,536) Net realised losses and change in unrealised depreciation on securities allocated from NewSmith Opportunities Fund LP (86,715) Net decrease in net assets resulting from operations (108,251) Change in net assets resulting from share capital transactions – Total decrease in net assets (108,251) Net assets at beginning of year 4,821,025 Net assets at end of year 4,712,774


Statement of cash flows for the year ended 31 December 2012


9

2012 £ Cash flows from operating activities Net decrease in net assets resulting from operations (108,251) Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activates Sale of investment in NewSmith Opportunities Fund LP 18,838 Net investment expense allocated from NewSmith Opportunities Fund LP 2,610 Net realised loss allocated from NewSmith Opportunities Fund LP 7,666 Net change in unrealised depreciation allocated from NewSmith Opportunities Fund LP 79,049 Audit fees payable (159)Professional fees payable (80) Net cash used in operating activities (327) Net decrease in cash and cash equivalents (327) Opening cash and cash equivalents 360 Ending cash and cash equivalents 33


Notes to the financial statements 31 December 2012

See attached financial statements of NewSmith Opportunities Fund LP and NewSmith Opportunities Private Equity Fund LP

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1. Organisation

NewSmith Opportunities International Fund Limited (the “Company”) was incorporated as an open-ended investment company with limited liability in the Cayman Islands on 4 March 2004. The Company is part of a master/feeder structure, whereby substantially all of its assets are invested in NewSmith Opportunities Fund LP (the “Master Fund”). At 31 December 2012, the Company’s investment in the Master Fund consisted of loan contributions and capital contributions.

The Company commenced operations on 17 May 2004. The percentage of the Master Fund owned by the Company at 31 December 2012 was 32.46%. NewSmith Opportunities US Fund Limited owned 25.67% of the Master Fund at 31 December 2012 with the remaining portion owned by direct investors.

The memorandum and articles of association governing the Company were originally set up to terminate the Company on the winding-up and dissolution of the Master Fund which is set to happen seven years and one day after the first closing of the Master Fund, which is 15 May 2011. The Investment Manager may extend the life of the Master Fund (and thereby that of the Company) by up to two years from first closing with the consent of investors of the Master Fund and the Company. This consent was received on 11 March 2011 and as such the life of the Company was extended until 14 May 2012. In March 2012, consent was obtained from the investors to extend the life of the Master Fund (and thereby that of the Company) until 14 May 2013. In February 2013, consent was obtained from the investors to extend the life of the Master Fund (and thereby that of the Company) until 15 May 2015.

The Master Fund invests substantially all of its assets in the NewSmith Opportunities Private Equity Fund LP (the “Private Equity Fund”). The Private Equity Fund invests exclusively in private equity placements.

Previously, the Master Fund invested in the NewSmith Global Opportunities Hedge Fund LP (the “Hedge Fund”, via limited feeder investment companies) which in turn invested in long and short equities and other derivative contracts. The Hedge Fund was dissolved on 9 November 2010.

Prior to its liquidation, the Hedge Fund held two remaining investment positions: 0rdinary and preference shares in FibreChem Technologies Limited (“FibreChem”) and warrants in Neptune Minerals plc (“Neptune”), both of which were valued at £nil. FibreChem ordinary and preference shares were suspended from trading on the Singapore Exchange on 23 February 2009 and remain suspended at the date of this report.

The FibreChem and Neptune investments (valued at £nil) together with a cash balance were transferred on 26 July 2010 to NS SPV (previously known as NewSmith SPV), a Cayman company set up to hold the assets on behalf of investors in the Hedge Fund. The warrants held in Neptune expired in October 2010. Any proceeds arising from the realisation of FibreChem in the future and any remaining cash balance will be returned to investors including the Company. NS SPV will distribute the assets based upon the ownership percentage of the Hedge Fund as at 30 April 2009, the date on which the last investor was redeemed.




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1. Organisation (continued)

The GBP Class A and GBP Class B shares of the Company are listed on the Channel Islands Stock Exchange.

NewSmith Asset Management LLP is the investment manager (the “Investment Manager”) of the Company and NewSmith Capital (Cayman) Limited is the manager (the “Manager”). Citco Fund Services (Ireland) Limited is the administrator and transfer agent (the “Administrator”) to the Company.

2. Significant accounting policies

The financial statements are expressed in Pound Sterling (£) and are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believe that the estimates utilised in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates.

Basis of accounting

Security transactions are recorded on the trade date basis. Realised gains and losses from security transactions are computed by use of the first-in, first-out method. Dividend income and expense are recognised on the ex-dividend date while interest is recorded on an accruals basis.

The Company’s investment in the Master Fund

The Master Fund is an English Limited Partnership and prepares its financial statements under UK GAAP. The carrying value of the Private Equity Fund within the financial statements of the Master Fund is based upon the net assets of the Private Equity Fund as at 31 December 2012. The Private Equity Fund, also an English Limited Partnership, prepares its financial statements under UK GAAP.

The investments in the Private Equity Fund have been valued by the Investment Manager using available information. The level of information that is available in respect of unquoted companies is generally less than that available for quoted companies.

The accounting policy of the Private Equity Fund is to carry investments at cost less any permanent diminution in value. However, the valuation of these investments is subjective, due to the nature of the companies and the industry sectors within which they operate, and as such the amount realised from the sale or disposal of these investments may vary significantly from the carrying value disclosed in these financial statements.




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2. Significant accounting policies (continued)

The Company’s investment in the Master Fund (continued)

Under US GAAP the Company is required to record its portion of the Master Fund’s investment in the Private Equity Fund at fair value. The fair value of investments in the Private Equity Fund is based upon the most recent financing rounds and capital activity in respect of unquoted investments. Quoted investments are valued based upon last traded price. As at 31 December 2012 the fair value of one investment within the Private Equity Fund was greater than the carrying value within the Private Equity Fund financial statements. This resulted in the carrying value of the Company’s investment in the Master Fund being increased by £176,924 within the Company’s financial statements.

Foreign currency translation

Assets and liabilities denominated in currencies other than Pound Sterling are translated into Pound Sterling at the closing rates of exchange at each year-end. Transactions during the year, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction. Foreign currency transaction gains and losses are included in the statement of operations.

Cash and cash equivalents

Cash and cash equivalents include amounts due from banks on demand and interest bearing deposits with original maturities of three months or less.

Taxation

The Company was incorporated as a Cayman Islands exempted company. Under the current laws of the Cayman Islands, there are no income, estate, transfer, sales or other Cayman Island taxes payable by the Company. Accordingly, no Cayman Islands income tax or capital gains provision is required in these financial statements.

3. Management and performance fees

No management fees or performance fees are paid by the Company. Management and performance fees are paid by the Private Equity Fund under terms disclosed in its financial statements.

4. Fair value measurement

US GAAP has a hierarchal disclosure framework which prioritises and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.




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4. Fair value measurement (continued)

Level I - Quoted prices are available in active markets for identical investments from market data sources as of the reporting date.

Level II - Pricing inputs (the underlying information used to calculate the price) include inputs in markets that are observable but are not considered to be active.

Level III - Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant judgement or estimation.

The Company’s investment in the Master Fund has been classified as level III. The categorisation within the hierarchy does not necessarily correspond to the Investment Manager’s perceived risk of an investment in the Master Fund or Private Equity Fund, but reflects the fact that the value of the Master Fund is driven by the underlying investments of the Private Equity Fund, most of which are unquoted.

The table below summarises the change in carrying value associated with the investment in the Master Fund during the year ended 31 December 2012:

£ Beginning balance as at 1 January 2012 4,829,978 Realised loss (7,666)Change in unrealised depreciation (81,659)Sales (18,838) Ending balance as at 31 December 2012 4,721,815

Further disclosure about the investments held by the Private Equity Fund can be found in Note 4 of its audited financial statements.

5. Administration

Administration fees are paid by the Private Equity Fund under terms disclosed in its financial statements.

6. Financial instruments

The Company invests all its assets in one entity, the Master Fund, which in turn invests in the Private Equity Fund. The Private Equity Fund investments may be in smaller, unquoted, less established or illiquid companies that by their nature involve greater risks than are generally associated with investments in more established companies. Unquoted companies are not readily marketable and it may therefore take longer to realise, or it may not be possible to realise, these positions. Further disclosure about the investments held by the Private Equity Fund, and the related risks, can be found in Note 4 of its audited financial statements.




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7. Share capital

The Company has an authorised share capital of £10,000 divided into 10 founder shares, par value £0.01 per share and 999,990 ordinary shares, par value £0.01 per share which are available for issue as class A common shares and class B common shares. Class B common shares differ from class A common shares only in that holders of class B shares are not allocated gains or losses arising from New Issues, as defined by the National Association of Securities Dealers (the “NASD”). Restricted persons, as defined by the NASD, only invest in class B.

Founder shares are held by the Manager. They confer no economic benefit other than the right to a return of paid-up capital on a winding-up subject to the prior return of paid-up capital on ordinary shares and management shares. The founder shares do not generally have the right to vote except that they have the exclusive right to vote in relation to (i) a change of name for the Company, (ii) the appointment or removal of any director, (iii) all matters, including without limitation amendments to the articles of association, in relation or incidental to the creation of one or more additional classes or sub-classes of shares of such number, par value and denomination, and with such rights and privileges and such terms as the holders of the founder shares may determine, whether by means of conversion or by way of cancellation of all or any of the authorised but unissued ordinary shares and the creation of fresh authorised shares, as the holders of the founder shares may determine provided that the rights attaching to shares already in issue are not thereby adversely affected, (iv) the winding-up of the Company, and (v) to increase the authorised capital of the Company, including by the addition of other currencies.

The Company is currently closed to subscriptions. The Company may return capital to shareholders via a compulsory repurchase of its own shares.

Share capital transactions during the year to 31 December 2012 were as follows:

Number of shares outstanding 1 Jan 2012

Shares issued during the year

Shares repurchased during the year

Number of shares outstanding 31 Dec 2012

GBP Class A 20,988.11 – – 20,988.11GBP Class B 39,184.89 – – 39,184.89 60,173.00 – – 60,173.00

8. Related party transactions

The directors of the Company are also directors of NewSmith Capital (Cayman) Limited, the Manager, NS SPV and the NewSmith Opportunities US Fund Limited.

Paul Roy and Ronald Carlson, directors of the Company, are also directors of NewSmith Capital GP Limited, the General Partner to the Private Equity Fund and the Master Fund.




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8. Related party transactions (continued)

Paul Roy and Ronald Carlson are partners of NewSmith Asset Management LLP, the Investment Manager. They are also partners of NewSmith LLP, the parent entity of the Investment Manager, Manager and the General Partner.

On 8 February 2012, NewSmith LLP replaced NewSmith Capital Partners LLP as the parent entity of the Investment Manager.

All directors have waived their entitlement to receive directors’ fees for the year ended 31 December 2012.

None of the directors held any holdings in the Company at year end.

9. Financial highlights

The following represents the per share operating performance of the Company, ratios to average net assets and total return information for the year ended 31 December 2012.

GBP GBP Class A Class B £ £ Per share operating performance: Beginning net asset value 80.12 80.12 Net investment expense (0.36) (0.36) Net realised and unrealised loss (1.44) (1.44) Total expense from investment operations (1.80) (1.80) Ending net asset value 78.32 78.32 Total return (2.25)% (2.25)%

Ratios to average net assets Net investment expense (0.45)% (0.45)% Total expenses (0.45)% (0.45)%




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10. Contingent liabilities

At the date of these financial statements the directors are not aware of any contingent liabilities.

11. Subsequent events

There were no subsequent events relating to the Company to report.

NewSmith Opportunities International Fund Limited

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