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 27 November 2012

BETTER CAPITAL PCC LIMITED

(the "Company")

INTERIM RESULTS UPDATE

Better Capital PCC Limited (the "Company") is pleased to announce its interim financial resultsfor both the 2009 Cell and the 2012 Cell for the 6 month period ended 30 September 2012.

Highlights for the Company include: 

·; £58 million committed to bolt-on and new acquisitions in the current financial year, including ATH deal post period end

·; £440.8m total net asset value (2009 Cell: £275.3m, 2012 Cell: £165.5m)

·; Both 2009 Cell and 2012 Cell shares continue to trade at a premium to NAV

2009 Cell:

·; Net 34.3 per cent. growth in NAV per share in the 2009 Cell since launch

·; 2009 Cell now fully committed following £15.0m ATH deal post period end

·; Distribution of 5 pence per share to shareholders anticipated in Q1 2013

2012 Cell:

·; 2012 Cell completed its second investment, committing £40 million to Jaeger

·; NAV per share in the 2012 Cell materially unchanged as underlying businesses are progressing satisfactorily

Outlook

The Board is of the view that the level of potential deal flow will continue in the short to medium term and that this will provide appropriate opportunities for the Better Capital Funds to invest selectively in businesses with good prospects for successful turnaround.

Market conditions for most portfolio companies remain challenging and are predicted to be for some time yet. However, the track record of Better Capital investing in and turning around troubled businesses is expected to yield attractive exits. Planning to achieve those exits is already underway and the Board anticipates a distribution to shareholders of 5 pence per share in Q1 2013.

Enquiries:

Better Capital PCC Limited +44 (0)1481 716 000

Mark Huntley (Director)

Laurence McNairn (Administrator and Company Secretary)

Numis Securities Limited (Corporate Broker & Financial Adviser) +44 (0)20 7260 1000

Nathan Brown

Oliver Hardy

Powerscourt (Public Relations Adviser) +44 (0) 20 7250 1446

Jon Earl

Chairman's Statement

The Company will soon celebrate its third anniversary and I am delighted to be able to continue to report good progress achieved in the Better Capital Funds.

Investment activities

Fund I

A total of £6.6 million was invested out of Fund I into the underlying portfolio companies to fund, in particular, a strategically important follow-on acquisition in Gardner, working capital to Reader's Digest and the on-going restructuring programme in Fairline. Spicers repaid £5.0 million, of the original investment, to Fund I during the period and a further £10.0 million repayment is intended in the near future.

Since the period end Fund I has, through a wholly owned special purpose vehicle (the "SPV"), acquired certain bank facilities and related rights of ATH Resources Plc and its subsidiary, Aardvark TMC Limited (together "ATH"). Fund I has committed £15.0 million to the SPV. ATH is one of the UK's leading producers of coal.

The Board has been notified by Fund I GP Company that the ATH acquisition will be the last new investment for Fund I and that, following the end of the Fund I Investment Period, it is envisaged that £10.4 million will be returned to 2009 Cell for onward distribution to the 2009 Cell investors. The balance will be retained to support the growth of the portfolio companies.

Fund II

Fund II GP Company was pleased to announce the successful acquisition of Jaeger in the period, following shortly after the acquisition of Everest. Jaeger is a renowned ladies' and men's fashion retailer, operating in the premium segment. An initial investment of £40.0 million was made, with £6.4 million subsequently repaid during the period.

The Board has discussed with Fund II GP Company the dynamics behind the number of completed acquisitions to date by Fund II as its approaches its first full year of operations. Deal flow is reported to have been consistent, albeit not as strong as would have been liked, and a number of opportunities have been pursued but ultimately not executed as Fund II GP Company has been intent on maintaining its rigorous investment discipline.

Portfolios

Fund I GP Company has reported to the Board that the Fund I portfolio companies are progressing generally in line with expectations, leading to increases in the valuations of Gardner, Fairline and in particular Spicers. The exception to this encouraging progress is Reader's Digest, where the previously reported attrition in the Reader's Digests' core markets continues to more than offset the progress being made in the business' new growth initiatives, such as its own brand loyalty scheme, mobile phone contracts and holiday packages. The valuation of this investment has been substantially reduced. Overall, Fund I NAV has risen 34.3 per cent. since Fund I's launch in December 2009.

Fund II GP Company has informed the Board that both Everest and Jaeger are still in the early stages of their respective change programmes. However, solid improvements have been made and the businesses are progressing satisfactorily. Fund II is 35.3 per cent. invested and investments are carried at cost with overall NAV down 1.7 per cent. after deduction of expenses.

Though only two investments have been made by Fund II to date, Fund I had similar phases where the potential deal flow took time to convert. It is recognised that investments do not complete in a linear fashion. The Board and the Fund II GP Company have a strong belief in the need for continued investment discipline.

The Board remains satisfied with the overall progress achieved in the Better Capital Funds.

Deal flow

The potential deal flow remains consistent with, on average, a new investment opportunity being received each day. Opportunities are generated from a variety of sources and relate to businesses in a range of sectors with the composition staying broadly similar to prior periods. At 30 September 2012, the Consultant had logged a total of 886 leads.

The Consultant continues to develop the Better Capital brand through structured and consistent marketing. Key relationships within the advisory community and banks continue to be actively fostered as is the Consultant's participation in various media opportunities.

Outlook

The Board is of the view that the level of potential deal flow will continue in the short to medium term and that this will provide appropriate opportunities for the Better Capital Funds to invest selectively in businesses with good prospects for successful turnaround.

Market conditions for most portfolio companies remain challenging and are predicted to be for some time yet. However, the track record of Better Capital investing in and turning around troubled businesses is expected to yield attractive exits. Planning to achieve those exits is already underway and the Board anticipates a distribution to shareholders of 5 pence per share in Q1 2013.

Richard Crowder

Chairman 26 November 2012

Statement of Responsibility and Other Information

Responsibility Statement

The Directors confirm that to the best of their knowledge:

·; the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union; and

·; the Interim Financial Report meets the requirements of an interim management report (as defined below), 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 first period of the financial year; and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties of 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 in the first period of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the audited financial statements that could do so.

Shareholdings of the Directors

The beneficial interests in shares of the Company that were held by Directors as at 30 September 2012 are detailed below:

2009 Cell

* Per cent. holding is given on one for one share holding basis rather than on voting rights.

2012 Cell

* Per cent. holding is given on one for one share holding basis rather than on voting rights.

There have been no changes to the Directors' shareholdings since 30 September 2012.

Shareholders' voting rights

Other than the 100 Core Shares issued to the Better Capital Purpose Trust as part of the Conversion, the Directors confirm that there are no securities in issue that carry special rights with regards to the control of the Company. The Core Shares have no voting rights for so long as Cell Shares are in issue.

The Company's issued share capital consists of 206,780,952 2009 Shares and 169,861,895 2012 Shares. Under the Company's articles of incorporation, at any general meeting of the Company:

• each holder of 2009 Shares who is present in person shall have one vote and on a poll the vote shall be weighted where a vote cast in relation to each 2009 Share shall count as 1.1096 towards the total number of votes cast; and

• each holder of 2012 Shares who is present in person shall have one vote and on a poll the vote shall be weighted where a vote cast in relation to each 2012 Share shall count as 0.9770 towards the total number of votes cast.

The figure which may be used by the Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Better Capital PCC Limited under the FSA's Disclosure and Transparency Rules, is the aggregate of the number of votes capable of being cast on a poll, namely 395,399,215. This is calculated as the sum of the 2009 Shares (206,780,952) multiplied by 1.1096 plus the 2012 Shares (169,861,895) multiplied by 0.9770.

Similarly, to calculate the numerator, Shareholders should multiply their holding of 2009 Shares by 1.1096 and multiply their holding of 2012 Shares by 0.9770. The sum of those calculations will result in the relevant number of voting rights for the numerator.

Fund I GP's Share and Carried Interest

The Fund I GP's Share is calculated under the terms of the Fund I Limited Partnership Agreement and as described in the Prospectus dated 19 December 2011. Pursuant to the terms of the Fund I Limited Partnership Agreement, where net income and net capital gains are insufficient to extinguish the Fund I GP's Share, Fund I shall advance a non-interest bearing loan to the extent of the Fund I GP's Share not already drawn by the Fund I GP. The loan is not recoverable from the Fund I GP other than by allocation of net income or net capital gains.

In the period under review, Fund I has advanced a non-interest bearing loan to its general partner of £1.55 million (31 March 2012: £3.1 million) in respect of the Fund I GP's Share. This has been accounted for when calculating the fair value of the investment by 2009 Cell in Fund I.

No amounts are yet liable to be paid in respect of carried interest.

Fund II GP's Share and Carried Interest

The Fund II GP's Share is calculated under the terms of the Fund II Limited Partnership Agreement and as described in the Prospectus dated 19 December 2011. Pursuant to the terms of the Fund II Limited Partnership Agreement, where net income and net capital gains are insufficient to extinguish the Fund II GP's Share, Fund II shall advance a non-interest bearing loan to the extent of the Fund II GP Share not already drawn by the Fund II GP. The loan is not recoverable from the Fund II GP other than by allocation of net income or net capital gains.

In the period under review, Fund II has advanced a non-interest bearing loan to its general partner of £1.3 million (31 March 2012: £0.5 million) in respect of the Fund II GP's Share. This has been accounted for when calculating the fair value of the investment by 2012 Cell in Fund II.

No amounts are yet liable to be paid in respect of carried interest.

Going Concern

After making enquiries and given the nature of the Company, Fund I and its investments and Fund II and its investments, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements, and, after due consideration, the Directors consider that the Company is able to continue for the foreseeable future.

Interim management report

·; Important events of the interim period

The important events of the interim period that have occurred during the period and the key factors influencing the financial statements are all set out in this report, comprising the Chairman's Statement, 2009 Cell General Partner's Report, Investment Report of Fund I and Financial Statement sections and 2012 Cell General Partner's Report, Investment Report of Fund II and Financial Statement sections.

·; Principal risk

For the remaining six months of the financial period, the Company's principal risk relates to the financial performance of the Fund I and Fund II portfolios.

The Directors of the Company are listed on within the Interim Report and have been directors throughout the period.

By order of the Board

Richard Crowder

Chairman

26 November 2012

Independent Review Report to Better Capital PCC Limited

Introduction

We have been engaged by the Company to review the Company condensed set of financial statements in the interim financial report for the period ended 30 September 2012 which comprises the Company Condensed Statement of Financial Position, Company Condensed Statement of Comprehensive Income, Company Condensed Statement of Changes in Equity, Company Condensed Statement of Cash Flows and Company related notes. 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.

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 Services 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 Company's condensed set of financial statements included in this interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the Company's condensed set of financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for, and only for, the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not in producing this report accept or assume responsibility for any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

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 enquiries, 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 Company's condensed set of financial statements in the interim financial report for the period 1 April 2012 to 30 September 2012, in all material respects, are not prepared in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

BDO LimitedChartered AccountantsPlace du Pré, Rue du Pré, St Peter Port, Guernsey

Date: 26 November 2012

Condensed Statement of Financial Position

As at 30 September 2012

The unaudited condensed financial statements of the Company were approved and authorised for issue by the Board of Directors on 26 November 2012 and signed on their behalf by:

Richard Crowder Richard Battey

Chairman Director

The notes form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Comprehensive Income

For the period 1 April 2012 to 30 September 2012

All activities derive from continuing operations.

The notes form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Changes in Equity

For the period 1 April 2012 to 30 September 2012

The notes form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Cash Flows

For the period 1 April 2012 to 30 September 2012

Note

Net cash used in operating activities includes £3,988 (31 March 2012: £9,991, 30 September 2011: £2,312) interest received on cash balances.

The notes form an integral part of the Company's condensed interim financial statements.

Notes to the Condensed Interim Financial Statements

For the period 1 April 2012 to 30 September 2012

1. General information

Better Capital Limited

Better Capital Limited was a non-cellular company limited by shares, which was incorporated on 24 November 2009 in Guernsey with an unlimited life and registered with the Commission as a Registered Closed-ended Collective Investment Scheme pursuant to the POI Law. The registered office of the Company is Heritage Hall, PO Box 225, Le Marchant Street, St Peter Port, Guernsey, GY1 4HY.

Better Capital PCC Limited following the Conversion

Following the Conversion, on 12 January 2012 by special resolution of its members, the Company is now a PCC limited by shares. It has maintained its date of incorporation, 24 November 2009 in Guernsey, and will continue with an unlimited life and continue to be registered with the Commission as a Registered Closed-ended Collective Investment Scheme pursuant to the POI Law.

The Company maintains a separate cell account for each class of shares, to which the proceeds of issue and the income arising from the investment of these proceeds in the respective Fund are credited, and against which the expenses allocated are charged. Under redemptions, shareholders are only entitled to their proportion of the net assets held in the cell relating to the particular shares.

There are currently two protected cells, being the 2009 Cell and the 2012 Cell.

The Cells have the investment objective of generating attractive total returns from investing (2009 Cell through Fund I and 2012 Cell through Fund II) in portfolios of businesses which have significant operating issues and may have associated financial distress, with a primary focus on businesses which have significant activities within the United Kingdom and Ireland. Such returns being expected to be largely derived from capital growth.

Upon conversion, the Company created the 2009 Cell to which were attributed, at the date of conversion, all of the members' shares, capital, assets and liabilities including all their investments in Fund I. 

The 2012 Cell closed on 12 January 2012, raising £169.9 million gross capital proceeds by way of a placing of shares.

Fund I is managed by its general partner, BECAP GP LP, which is in turn managed by its general partner BECAP GP Limited. Such arrangements are governed under the respective Limited Partnership Agreements.

Fund II is managed by its general partner, BECAP12 GP LP, which is in turn managed by its general partner BECAP12 GP Limited. Such arrangements are governed under the respective Limited Partnership Agreements.

2. Accounting policies

Basis of preparation

The unaudited company condensed financial information included in the interim financial report for the six months ended 30 September 2012 have been prepared in accordance with the DTRs of the UK's FSA and IAS 34, 'Interim Financial Reporting' as adopted by the EU.

The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements for the year to 31 March 2012, which are available on the Company's website (www.bettercapital.gg). The annual financial statements have been prepared in accordance with EU adopted IFRSs.

The same accounting policies and methods of computation are followed in the interim financial statements as in the annual financial statements for the year ended 31 March 2012.

The Company does not operate in an industry where significant or cyclical variations as a result of seasonal activity are experienced during the financial period.

Going concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Company, and in turn Fund I and II, have adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the Company. For this reason, they continue to adopt the going concern basis in preparing these financial statements.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, as a whole. The key measure of performance used by the Board to assess the Company's performance and to allocate resources is the total return on the Company's net asset value, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the financial statements.

For management purposes, the Company is organised into two main operating segments, being the 2009 Cell and the 2012 Cell. Full details of the 2009 Cell's and 2012 Cell's results are shown in the individual cell accounts.

All of the Company's income is from within Guernsey.

All of the Company's non-current assets are located in Guernsey.

Due to the Company's nature it has no customers.

Critical accounting judgement and estimation uncertainty

Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are routinely evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The areas involving a high degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements are disclosed below. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

The resulting accounting estimates will, by definition, seldom equal the related actual results.

Investments in Fund I and Fund II

The value of the Company's investments in the Funds are based on the value of the Company's limited partner capital and loan accounts within each Fund, which themselves are based on the value of the underlying investee companies as determined by the General Partner of each Fund. Any fluctuation in the value of the underlying investee companies will directly impact on the value of the Company's investment in the Funds.

When valuing the underlying investee companies, the General Partner of each Fund reviews information provided by the underlying investee companies and other business partners and applies widely recognised valuation methods such as; price of recent investment, discounted cost, earnings multiple analysis, discounted cash flow method and third party valuation to estimate a fair value as at the date of the statement of financial position. The variety of valuation bases adopted, quality of management information provided by the underlying investee companies and the lack of liquid markets for the investments mean that there are inherent difficulties in determining the fair value of these investments that cannot be eliminated. Therefore the amounts realised on the sale of investments will differ from the fair values reflected in these financial statements and the differences may be significant.

Where price of recent investment is determined to be the most appropriate methodology the transactional price will be that of the investing Fund. Interest receivable on loans forwarded by Funds will only be recognised when it is deemed more likely than not that the interest will be paid due to the immaturity of the turnaround position of the investee companies.

Further information in relation to the valuations of the investments in the Funds is disclosed in Note 4.

3. Taxation

The Company and Cells are exempt from taxation in Guernsey and the Company is charged an annual exemption fee of £600.

4. Investment in Limited Partnerships

Total Investment:

The movement in fair value is derived from the fair value movements in the underlying investments held by Fund I and Fund II, net of income and expenses of Fund I and Fund II and their related special purpose vehicles.

The outstanding loans do not carry interest. The loans will be repaid by way of distributions from the Funds. The Company is not entitled to demand repayment of the outstanding loans.

Distributions receivable from the Funds in the period amounted to £800,000 in aggregate (31 March 2012: £1,760,000, 30 September 2011: £560,000), of which £1,600,000 (31 March 2012: £800,000, 30 September 2011: £420,000) remains outstanding at the period end, which have been allocated as income based on discretionary allocation powers of the respective General Partners of the Funds as set out in the respective Limited Partnership Agreements.

In the financial statements of the Company, the fair value of the loans will be increased or reduced to reflect the fair value of the Cell's attributable valuation of net assets within Fund I and Fund II.

The Omnico Group, Everest and Jaeger investments are carried at the price of recent investment. Interest receivable, in respect of the underlying loans made by the Funds to these investments, has not been recognised in calculating the fair value of the investments in the Funds due to their circumstances of being relatively immature turnaround opportunities. As at 30 September 2012 such unrecognised interest receivable amounted to £607,562 (31 March 2012: £1,044,625, 30 September 2011: £144,641).

5. Related party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party in making financial or operational decisions. The Directors are responsible for overall control, management and supervision of the Company's affairs and are responsible for the overall implementation of the investment objective and policy of the Company.

The Company has four non-executive Directors, all independent of the Administrator other than Mr Mark Huntley, who is also the managing director of HIFM. Mr Huntley is also a director of BECAP GP Limited, the general partner of the Fund I GP and BECAP12 GP Limited, the general partner of the Fund II GP.

Annual remuneration terms for each Director is as follows: the Chairman receives £60,000, the Chairman of the audit committee receives £52,500, the Chairman of the management engagement, nomination and remuneration committee receives £50,000 and the other non-executive director receives £45,000.

Directors' fees for the period to 30 September 2012 amounted to £104,168 (31 March 2012: £151,875, 30 September 2011: £67,500), of which £11,250 (31 March 2012: £nil, 30 September 2011: £nil) was outstanding at the period end.

6. Earnings per share and net asset value per share

Earnings per share

The earnings per share is based on the profit or loss of each Cell of the Company for the period/year and on the weighted average number of shares of each Cell of the Company in issue for the period/year.

The Cells of the Company do not have any instruments which could potentially dilute basic earnings per share in the future.

Net asset value per share

The net asset value per share for each Cell of the Company is arrived at by dividing the total net assets of the relevant Cell of the Company at the period/year end by the number of shares of the relevant Cell of the Company in issue at the period/year end.

7. Subsequent events

2009 Cell

Since the period end Fund I has, through a wholly owned special purpose vehicle (the "SPV"), acquired certain bank facilities and related rights of ATH Resources Plc and its subsidiary, Aardvark TMC Limited (together "ATH"). Fund I has committed £15.0 million to the SPV.

2012 Cell

1 October 2012 - A wholly owned subsidiary controlled by Fund II acquired the remaining 10 per cent. stake in Jaeger from Harold Tillman. No additional funding from Fund II was required to facilitate this transaction.

Other than the above, there were no significant events occurring after the reporting date of the report for the period ended 30 September 2012.

Better Capital 2009 Cell

Investment policy

2009 Cell

The Company implements its investment policy in relation to the 2009 Cell by attributing its current investment in Fund I to the 2009 Cell. Its investment policy is implemented through Fund I managed by Fund I GP in accordance with the following:

Better Capital Fund I investment objective and policy

Fund I seeks to invest in a portfolio of businesses which have significant operating issues and may have associated financial distress, with a primary focus on investments in businesses which have significant activities within the United Kingdom or Ireland.

Uninvested or surplus capital or assets may be invested on a temporary basis in:

- cash or cash equivalents, money market instruments, bonds, commercial paper or other debt obligations with banks or other counterparties having a "single A" or higher credit rating as determined by any reputable rating agency selected by the Fund I GP; and

- any "government and public securities" as defined for the purposes of the FSA Rules.

The aggregate amount deposited or invested with any single such bank or other counterparty (including their associates) or in government and public securities of any single issue, shall not exceed £35 million.

Fund I investment restrictions

Fund I must, at all times, invest and manage its assets in a way which spreads investment risk and in accordance with the following:

Fund I will not:

·; without the consent of the Company acting through 2009 Cell, invest directly or indirectly, (excluding any Bridging Investments) an aggregate amount representing, at the time of investment, more than 20 per cent. of the Fund I Total Commitments in the securities of any single company or group of companies;

·; invest more than 10 per cent. of the Fund I Total Commitments (at the time of investment) in quoted companies or securities representing or convertible into quoted securities, provided that such restriction shall not apply to:

- quoted positions in companies in respect of which there is an intention to become unquoted, or which become quoted after investment by Fund I;

- the short term investment of monies pending deployment into turnaround opportunities; or

- investments that have (in the opinion of the Fund I GP) the character of a private equity investment (which would generally include the ability to exert significant influence over value creation and/or the strategic direction of such entity);

·; engage in speculative investment in activities such as commodities, commodity contracts or forward currency contracts (provided however that this shall not prevent Fund I from entering into investment activities which are regarded by the Fund I GP as being protective of the interests of Fund I);

·; enter into any transaction where a security is sold short or where Fund I has an uncovered position (other than for the purposes of hedging in connection with an investment); or

·; other than as required for the purposes or efficient portfolio management, invest at any time in any option, futures contract, total return swap, derivative, contract for difference or other similar instrument (excluding convertible securities or similar arrangements).

Fund I may make investments in collective investment schemes (including unregulated collective investment schemes and collective investment schemes operated or advised by the Fund I GP or its associates) but shall not make any investment in any fund or collective investment scheme which involves paying any additional management fees or carried interest (or equivalent) to any fund or investment manager.

Fund I Borrowings

As part of its investment policy, no borrowings can be made by the Company in relation to the 2009 Cell.

Fund I is permitted to borrow, on a short term basis, for any purpose, up to an aggregate amount limited to an amount equal to 10 per cent. of Total Commitments. It is not expected that Fund I will borrow and Fund I is not permitted to incur long term borrowings.

There is no restriction on borrowings at levels below that of Fund I, but it is anticipated that there will be limited scope for such borrowing given the nature of the businesses in which Fund I has invested.

Amendments to the Fund I investment policy

The Company acting in relation to the 2009 Cell ensures that at all times the Fund I GP complies with the investment objective, policy and restrictions of Fund I under the terms of the Fund I Partnership Agreement. In order to achieve an appropriate level of certainty for holders of the 2009 Shares, the investment objective, policy and restrictions of Fund I have been entrenched in the Fund I Partnership Agreement and cannot be varied without an amendment to the Fund I Partnership Agreement, which would require the consent of the Company acting in relation to the 2009 Cell. The Company will seek approval of the holders of the 2009 Shares by way of ordinary resolution before consenting to an amendment to the investment policy set out in the Fund I Partnership Agreement.

Fund I Investment Period and Reinvestment of Proceeds

The Fund I Investment Period is the period from 21 December 2009 to 31 December 2012, provided that such period may be extended by up to 12 calendar months by the Fund I GP with the consent of the Company acting in relation to the 2009 Cell, and may be terminated earlier following an Executive Departure (as defined in the Fund I Partnership Agreement). During the Fund I Investment Period, the Fund I GP may apply amounts committed to Fund I or reinvest the proceeds of any realised investments into new investment opportunities in accordance with the investment objective, policy and restrictions, or otherwise apply such commitments or proceeds in the pursuit of the business of Fund I.

Following the expiry of the Fund I Investment Period, the Fund I GP may not make any new investments, or otherwise apply amounts committed to Fund I or reinvest proceeds received other than in the following limited circumstances, namely:

·; for the purpose of paying any obligation of, or any of the expenses and liabilities of, Fund I;

·; for the purpose of paying the Fund I GP's Share (including advances or loans in respect thereof);

·; for the purpose of making investments or completing contracts committed or entered into before that date; and

·; for the purpose of making Follow-On Investments.

Highlights - 2009 Cell

£173.3 MILLION / 84.5 PER CENT. invested

7 completed Fund I platform acquisitions to 30 September 2012*

8 completed Fund I bolt-on acquisitions to 30 September 2012

34.3 per cent. increase in NAV

DISTRIBUTION of 5 pence per share anticipated in Q1 2013

* DigiPoS and Clarity were merged in the period to create Omnico Group.

** Based on the weighted average issue price of ordinary shares and net of share issue costs.

Investment activities in Fund I

The following investment activities took place between 1 April 2012 and 30 September 2012:

Gardner

·; 26 April 2012 - Fund I, through its special purpose vehicles, invested £3.0 million into Gardner-Airia Holdings SAS, a sister company of Gardner, to part fund the acquisition of Airia SAS and its subsidiaries ("Airia"). Airia, a French company with operations near Toulouse, Marseille and Lyon, manufactures, fabricates, assembles and distributes aerospace components. The acquisition of Airia brings the total committed and invested by Fund I in Gardner to £40.6 million.

·; 12 June 2012 - Pranita Engineering Solutions Private Limited ("Pranita"), a company based in India, is a privately held aerospace engineering business. Gardner owns 70 per cent. of the equity in Pranita. The acquisition had been funded from Gardner's internal cash resources.

Reader's Digest

·; 18 May and 4 July 2012 - Reader's Digest drew down the remaining £2.0 million working capital facility in two tranches to fund working capital and growth initiatives. Fund I's total commitment and investment in Reader's Digest is £23.0 million.

Spicers

·; 26 September 2012 - Spicers repaid £5.0 million of the short-term loan from Fund I out of surplus cash resources. At 30 September 2012, the total commitment and investment in Spicers stood at £15.0 million.

Fairline

·; 1 August 2012 - Macsco 30 Limited, the acquisition vehicle of Fairline Boats Acquisition Limited, drew down the remaining £1.6 million commitment from Fund I and £1.4 million commitment from West Register (Investments) Limited, a wholly owned subsidiary of the Royal Bank of Scotland PLC, to fund the business's on-going restructuring programme. The total amount committed and invested by Fund I now stands at £16.6 million.

General Partner's Report

It is pleasing to report that during the period since the last report, a number of Fund I's portfolio companies have shown considerable improvement, and are growing in profitability. This has resulted in a further substantial increase in the Net Asset Value of the Fund I assets.

Activities

The volume of investment activity in the period to 30 September has been comparatively lower than prior periods. Fund I enjoyed an unprecedented period of activity in the summer of 2011, with the acquisitions of (and the intention to acquire) Fairline, DigiPoS, Spicers and Clarity.

Nevertheless, a total of £6.6 million was invested in the current period. Of the total, £3.0 million went into part funding Gardner group's acquisition of Airia, a French aerospace components manufacturer. From Gardner's perspective, this acquisition is strategically important and places the combined business more clearly in the top ranking of European industry suppliers. The combined business has a pro forma turnover of over £105 million and over 1,400 employees.

Two of the portfolio companies, Reader's Digest and Fairline, received further funds from Fund I for a total of £3.6 million. Both investments have been made in line with Fund I's commitment in previous periods.

In the current period, Fund I received a £5.0 million repayment from Spicers. This was funded out of internal cash resources.

Since the period end Fund I has, through a wholly owned special purpose vehicle (the "SPV"), acquired certain bank facilities and related rights of ATH Resources Plc and its subsidiary, Aardvark TMC Limited (together "ATH"). Fund I has committed £15.0 million to the SPV.

Future activities

In addition to the £5.0 million repaid by Spicers during the review period, Spicers intends to repay a further £10.0 million in the near future. Strong focus on both margins and working capital has enhanced the business's profitability and cash, enabling it to fund the repayment from internal cash resources. 87.5 per cent. of the total cash deployed in Spicers would then have been returned.

Portfolio update

Market fundamentals have remained broadly unchanged since the last report with the UK trading environment set to stay challenging for some time. Against this backdrop, businesses that succeed need to be well-managed, well capitalised and capable of executing rapid change.

Gardner continues to build on the strong progress it has achieved. This period has largely been about embedding the recent acquisitions in France and India into Gardner. Whilst the acquisition of Airia (France) was a strategic move to position Gardner as a 'Super Tier-2' supplier, the acquisition of Pranita (India) has enabled Gardner to exploit a further lower cost source. This period also marked the completion of Victory Park, Gardner's state-of-the-art manufacturing facility in Derbyshire. The extensive programme of site closures and moves was substantially completed in the period. Customer confidence in Gardner is growing as the business continues to impress with the speed with which it responds and also its entrepreneurial approach to problem solving. Gardner looks set to enjoy yet another year of strong revenue and profit growth, driven by strong demand and a leaner organisation.

Reader's Digest's core business continues to decline due to the widespread increase in customers buying digital content. The decline has, to an extent, been stemmed by the introduction of new growth initiatives, including Reader's Digest own-branded loyalty scheme, mobile phone contracts for the over 60s and holiday packages. Operational performance and customer satisfaction continue to improve, and is a key factor contributing to one of the lowest attrition rates in Reader's Digest Europe. The General Partner is nevertheless cognisant of the substantial change in the market the business operates in and has therefore decided to reduce the Reader's Digest fair value substantially. Negotiations continue with Reader's Digest Inc., the global licence holder, with a view to establishing a more sustainable mutual relationship.

m-hance, a Microsoft based provider of business management software continues to perform well. The acquisitions of Touchstone, Trinity, Gyrosoft and Maxima are now fully embedded, enabling m-hance to benefit from economies of scale.

Calyx Managed Services has enjoyed good traction in re-positioning the business towards the provision of outsourced managed services. Revenue growth remains a challenge due to widespread cut-backs in IT spending but substantial margin improvement and cost reductions are increasing profitability. The business has also experienced a senior management overhaul.

Santia's restructuring programme is now largely completed. This will enable Santia to benefit from a further cost base reduction. Santia has had mixed success from its business lines. Excellent results and growth have been achieved in its contractor certification business line; by contrast, its training business fell well below expectations due largely to very weak customer demand. Overall it expects to end 2012 with profits well ahead of the prior year but behind its own forecasts. System improvements and substantial headcount reductions together with a progressively stronger sales performance show good prospects for next year.

Omnico Group, the business formed from the merger of DigiPoS and Clarity is progressing satisfactorily. The business has benefitted from a complete change of the senior management team and from significant structural reorganisation. New product developments in both hardware and software are receiving encouraging feedback from both existing and prospective customers. A crucial milestone for the coming period is to fully exploit the opportunities from the merger, thus enabling the business to drive profitable revenue growth. Omnico Group is on an improving track but substantial profitability is not expected for at least a further year as the effects of re-organisation and product development become apparent.

Fairline continues to progress well despite difficult market conditions. Operational efficiency has continued to improve and the business is now reporting sustainable profits from a significantly loss-making position at acquisition. New boat models featured at recent boat shows have been well received and secured good orders. Fairline's next major milestone will be the re-engineering of the Colby factory layout to increase production flexibility. This will enable the business to respond more directly to market demand. Further funding may be made available to Fairline.

Spicers is performing well. The focus for this period has been about margin improvements and working capital optimisation through the implementation of a number of strategies. Spicers has also established a Chinese purchasing office which is responsible for procuring Spicers' own branded stationery, '5 Star'. Surplus freehold land in Sawston, Cambridge is currently being marketed for disposal, with the planned relocation of the head office and central distribution centre progressing to plan. The business's improved profitability and cash generation has enabled it to repay £5.0 million to Fund I in the period, with an intent to repay a further £10.0 million.

Uninvested proceeds

At 30 September 2012, uninvested cash in Fund I stood at £25.5 million. This balance excludes the £15.0 million committed to ATH and the £10.0 million Spicers intends to repay in the near future. The remaining cash will be used for the on-going support of the portfolio with consideration given to a return of capital of £10.4 million to 2009 Cell in Q1 2013.

Jon Moulton

Director

BECAP GP Limited 26 November 2012

Investment Report of Fund I

Gardner

Business description

·; A leading supplier of medium and high complexity machined metallic components to the aerospace industry (www.gardner-aerospace.com)

Progress

·; The relocation of head office and production to Victory Park, Derby has been completed

·; The UK site rationalisation programme completed in Autumn 2012

·; Integration of the newly acquired Airia, France and Pranita, India are progressing satisfactorily

·; Strengthened relationships with Airbus, GKN and Rolls Royce

Performance

·; Trading in line with investment plan with profitability significantly up on prior year

Fund I Investment details

Investment Report of Fund I (Continued)

Reader's Digest

Business description

·; An iconic brand in direct marketing and publishing in the UK (www.readersdigest.co.uk)

Progress

·; A number of new strategic partnerships for the provision of financial products, escorted holidays, and loyalty cards have been launched

·; Developed digital offering - a total of 1,000 products now available online

·; Performance of the core business of direct marketing of books, CDs and DVDs is declining in line with market trends

Performance

·; The attrition in Reader's Digests' core markets is more than offsetting the progress being made in the new growth initiatives and the valuation has been substantially reduced. Nonetheless, the company has no external debt and is anticipating a profit in Q4 2012, traditionally a strong trading period.

Fund I Investment details

Investment Report of Fund I (Continued)

Calyx

Business description

·; The Calyx investment consists of two separate businesses

·; m-hance: Leading UK supplier in Microsoft AX and Dynamics business management software (www.m-hance.com)

·; Calyx Managed Services: Leading supplier of managed IT services to small and medium sized enterprises (www.calyxgroup.com)

Progress

·; Integration following the acquisition of certain software assets and trading from Maxima plc into m-hance completed with benefits being realised

·; Re-financing of freehold property to support acquisition strategy in progress

·; New management team in Calyx Managed Services installed to drive revenue growth

Performance

·; m-hance performing ahead of investment plan whilst Calyx Managed Services performing to plan

Fund I Investment details

Investment Report of Fund I (Continued)

Santia

Business description

·; Provider of consultancy and advisory health, safety and environmental services (www.santia.co.uk)

Progress

·; Restructuring and IT system programmes largely completed and are delivering benefits

·; Setup of Dubai office to facilitate regional growth in its Training division

·; Strong growth in its contractor accreditation division

Performance

·; Varied performance across the seven divisions. The challenge is to support and develop the divisions that operate in growing markets and drive further efficiency improvements in the divisions that operate in contracting markets

Fund I Investment details

Investment Report of Fund I (Continued)

Omnico Group

Business description

·; A supplier of electronic point of sale ("EPoS") hardware and software and provider of related installation services (www.omnicogroup.com)

Progress

·; Merger between DigiPoS and Clarity is completed. The business has been re-branded as Omnico Group

·; New CEO and CTO for the combined group recruited, in addition to strengthening middle management

·; Disposal of Benelux subsidiary to ex-local managers

·; Cost reduction plans in progress

·; Investment in new Software and Hardware product development

Performance

·; Integrating the two businesses and finding good management has taken longer than originally anticipated; however, solid progress is now being achieved

Fund I Investment details

Investment Report of Fund I (Continued)

Fairline

Business description

·; A leading global brand specialising in the design, engineering, manufacture and distribution of luxury boats in the range of 38 to 78 feet (www.fairline.com)

Progress

·; Cost reduction plans progressing at pace with continued improvement in production efficiency

·; Manufacturing re-layout to match product line output to customer demand (pull model)

·; Disposal of surplus freehold

·; Marketing organisation and approach strengthened and focused

·; Global dealer distribution strengthened

Performance

·; Fairline is trading profitably and in line with expectation

Fund I Investment details

Investment Report of Fund I (Continued)

Spicers

Business description

·; A leading supplier of office supplies and equipment (www.spicers.co.uk)

Progress

·; Strategy focused on increasing margins

·; Focus on service to improve dealer support

·; Increase routes to market, contract stationery division now in place

·; Established representative office in the Far East for low cost sourcing

·; High added value own brand products being sourced with quality suppliers

·; Footprint re-engineering underway with reduction of two distribution centres

·; Further site rationalisation on-going

Performance

·; The business is trading ahead of the investment case

Fund I Investment details

 Investment Report of Fund I (Continued)

Portfolio summary and reconciliation

Investment Report of Fund I (Continued)

Cash Management

As at 30 September 2012, Fund I had placed a total of £25.5 million (31 March 2012: £28.7 million, 30 September 2011: £26.0 million) of cash on instant access deposit with two banks. Fund I has in place a strict cash management policy that limits counterparty risks whilst simultaneously seeking to maximise returns.

INDEPENDENT REVIEW REPORT TO BETTER CAPITAL PCC LIMITED IN RESPECT OF THE 2009 CELL

Introduction

We have been engaged by the Company to review the condensed set of financial statements of the 2009 Cell, a cell of Better Capital PCC Limited for the period ended 30 September 2012 which comprise the 2009 Cell Condensed Statement of Financial Position, the 2009 Cell Condensed Statement of Comprehensive Income, the 2009 Cell Condensed Statement of Cash Flows, the 2009 Cell Condensed Statement of Changes in Equity and the 2009 Cell related notes. 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.

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 Services Authority.

As disclosed in Note 2, the annual financial statements of the 2009 Cell are prepared in accordance with IFRSs as adopted by the European Union. The 2009 Cell's condensed set of financial statements included in this interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the 2009 Cell's condensed set of financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for, and only for, the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not in producing this report accept or assume responsibility for any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

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 enquiries, 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 2009 Cell's condensed set of financial statements in the interim financial report for the period 1 April 2012 to 30 September 2012, in all material respects, are not prepared in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

BDO LimitedChartered AccountantsPlace du Pré, Rue du Pré, St Peter Port, Guernsey

26 November 2012

Condensed Statement of Financial Position

As at 30 September 2012

The unaudited condensed financial statements of the 2009 Cell were approved and authorised for issue by the Board of Directors on 26 November 2012 and signed on their behalf by:

Richard Crowder Richard Battey

Chairman Director

The notes form an integral part of the 2009 Cell condensed interim financial statements.

Condensed Statement of Comprehensive Income

For the period 1 April 2012 to 30 September 2012