Jz Capital Regulatory News (JZCP)

JZ Capital Partners

INTERIM RESULTS FOR THE 6 MONTHS ENDING 31 AUGUST 2012

~ Well positioned for further NAV growth ~

10 October 2012

JZ Capital Partners (JZCP), the London listed private equity fund which invests in high-quality US, European and Latin America micro cap companies, announces its interim results for the six-month period ended 31 August 2012.

Results Highlights

·; US$130.8 million deployed across 17 new investments, including:

o US$85.7 million of new investments across all industry verticals in the US micro-cap portfolio, increasing the size by 41% to US$289 million

o Investments in the European Micro Cap Fund ("EMF") reached US$81.3 million representing 14% of total assets, following EMF's €13.5 million investment in Oro Direct - a precious metals trading business in Spain

o Completion of first US$6.1 million co-investment in Latin America in BSM Engenharia, a Brazil based infrastructure service business in conjunction with ACON, a private equity group with significant regional experience

·; 1% NAV Total Return including:

o NAV of US$610 million (FY2011: US$615 million)

o Distributions of 18.5c per share paid in July

o Post distribution NAV per share of US$9.38 (FY2011: US$9.47)

·; Interim Dividend of 14 cents per share for the period (H1 2011:6.5c per share)

·; Realisations totalling US$44.0 million generated from 11 investments

·; Combined EBITDA of the companies in the core micro-cap portfolio increased by 10% during the period

·; Financial strength of the business remains robust with 43% of NAV invested in liquid assets and no outstanding debt on the balances

Strategic Initiatives

·; Overwhelming shareholder approval received in July for a number of strategic initiatives, including:

o A simplified capital structure through a single class of ordinary shares - resulting in successful admission to trading on the London Stock Exchange's Specialist Fund Market ("SFM") in August

o New dividend policy will provide regular and more predictable distributions at a rate of 3% of NAV per year

o An increase in the percentage of total funds the Company is able to invest outside of the US from 20% to 30% in order to take advantage of micro cap opportunities in Europe and Latin America

o An investment of up to US$15.0 million in a new asset management business to meet the growing demand from endowments and pension funds in the US for fiduciary management service

Outlook

·; The Company is better positioned to generate superior shareholder returns following the approval and successful implementation of the strategic initiatives (outlined above)

·; Operational and financial performance of the underlying assets are expected to continue to improve despite the ongoing market uncertainty

·; Proven micro-cap strategy to remain core focus of the Company and main driver of NAV growth going forward

David Zalaznick, JZCP's Founder and Investment Adviser, said:

"It is very much business as usual at JZCP. Further investment activity in high quality companies and a flow of realisations have complimented another solid performance from our core micro cap portfolio during the period.

From a strategic perspective, it has also been a busy period for the Company as we have announced a number of measures that will benefit all of our shareholders. I would like to thank shareholders for their overwhelming support received for these new strategic initiatives that are now in place. We remain confident that they will set the foundations for the Company to continue to generate future profitable growth.

Our emphasis on maintaining a strong balance sheet together with a healthy pipeline of investments, particularly in the US, leaves us in a strong position as we enter the second half of the year."

There will be an analyst and investor presentation to discuss JZCP's recent financial performance and portfolio developments at 9.30am at FTI Consulting, 26 Southampton Buildings, London WC2A 1PB. It can be accessed by dialling +44(0)20 3364 5381 (UK) or +1 646 254 3364 (US) with the participant access code 7483702.

A playback facility will be available two hours after the conference call concludes. This facility may be accessed by dialling +44 (0)20 3427 0598 (UK) or +1 347 366 9565 (US). The code to access the playback facility is 7483702.

For further information:

About JZCP

JZCP is a London listed private equity fund which invests in high quality US, European and Latin American micro cap companies. Our objective is to achieve a superior overall return comprised of a current yield and significant capital appreciation. JZCP receives investment advice from Jordan/Zalaznick Advisers, Inc. ("JZAI"), founded by David Zalaznick and Jay Jordan, which has advised JZCP for twenty five years and has investment professionals and offices in New York, Chicago, London and Madrid. JZAI's experts work with the existing management of micro cap companies to help build better businesses, create value and deliver strong returns to our investors. JZCP also invests in mezzanine loans, first and second lien investments and other publicly traded securities. For more information please visit www.jzcp.com

Chairman's Statement

I am pleased to report the results of JZ Capital Partners Limited ("JZCP" or the "Company") for the six-month period ended 31 August 2012.

The first six months of the year was a particularly busy period for the Company. JZCP's NAV total return (NAV appreciation and reinvested dividends) was 1% during the period, driven by a solid underlying performance from our core micro cap portfolio, some opportunistic investments and some timely realisations. The Board has also implemented a number of strategic initiatives that are designed to simplify our shareholder structure and to provide a solid foundation on which to continue growing the Company. I am delighted that the Company and our shareholders are already benefiting from these initiatives.

Performance

The period was marked by steady performance from the underlying assets. Operationally, the core micro cap portfolio continues to deliver positive results, with the combined EBITDA of the companies in the portfolio increasing by 10%.

The Company experienced a particularly strong period of investment activity with US$130.8 million put to work across 17 new investments predominantly across the verticals in the core US micro cap portfolio, whilst realisations from 11 investments generated US$44.0 million.

There was a modest reduction in the value of our private investments, as a number of outperforming investments in the US micro cap portfolio were offset by a write down in Accutest Holdings, Inc., our environmental testing company.

The return of a more buoyant equity market backdrop during the period led to an uplift in the value of the listed equity portfolio. However, this was offset by a movement in the euro / dollar exchange rate leading to a small negative impact on the value of the portfolio.

Importantly the financial strength of the business remains robust: 43% of the NAV is invested in liquid assets (cash and publically traded securities) and other than in respect of the Zero Dividend Preference shares, there is no outstanding debt on the balance sheet.

Strategic Initiatives

In August, we received overwhelming shareholder support for a number of proposals introduced by the Board that has resulted in the Company enjoying a simplified capital structure that is more suited to our mix of shareholders and will support the Company's continued commitment to provide shareholders with future profitable growth.

As a result of the new capital structure, the Company has de-listed from the main board of the London Stock exchange and I am pleased that our new listing on the Specialist Fund Market ("SFM") has progressed well and trading volumes in the stock have remained at or near to historic levels.

JZCP's investment expertise and track record has and always will be orientated around its successful micro-cap investment strategy. While this focus will continue to form the core of our investment focus, the Investment Adviser is also taking advantage of some additional exciting investment opportunities that we are seeing in the real estate and credit markets.

While these assets will form a small part of the Company's overall NAV, it's important to highlight the Investment Adviser's proven track record in both asset classes, which importantly share a similar risk / return profile to the broader portfolio. Having analysed the strategy in detail, the Board is confident that they will provide an attractive, long-term and alternative revenue stream which will ultimately further enhance returns for our shareholders.

The Company made its first US$16.8 million real estate investment in Brooklyn, New York in April. The investment is already progressing well and subsequently a further US$4.6 million has been invested in similar assets in the Brooklyn area.

The portfolio is also becoming more geographically diversified - following shareholder approval, up to 30% of NAV can now be invested outside of the US, an increase from the previous limit of 20%. While the focus outside of the US has traditionally been on European investments, the Company has seen some exciting investment opportunities elsewhere. In April, the Company applied its value orientated investment approach through its first co-investment in Brazil. It has invested US$6.1 million (1% of NAV) in BSM Engenharia S.A, in conjunction with ACON Latin America, a fund with over 15 years investment experience in Latin America.

An amendment to our distribution policy was also approved, which I will address below.

Core Portfolio Update

Investment in high quality micro cap companies continues to be the fundamental driver of the Company's investment strategy. In the US, some US$85.7 million was invested which increased the size of the portfolio by 41% to US$289.6 million. Highlights included an investment in MEDS, a healthcare services provider, which was the first in the new Healthcare Revenue Cycle Management vertical. Following strong performance, Amptek, Inc. and Nielsen Kellerman in the sensors vertical were written up but this was offset by the negative impact of commercial real estate on our environmental testing business, Accutest Holdings, Inc. Alongside the verticals strategy, the Company also made three investments in the US with partners such as Baird Capital Partners and ACON group.

The Company's investments in the European Micro Cap Fund (EMF) reached US$81.3 million following an investment in March 2012 in Oro Direct, a buyer of precious metals which is based in Spain. The other four EMF companies are continuing to operate well despite the difficult economic conditions in Spain. These European investments constituted 14% of the Company's total assets at the end of the period. The manager of EMF, JZ International, is continuing to explore opportunities for the Company to invest in high quality micro cap companies throughout Europe.

Distributions

The Company, along with the vast majority of single manager listed private equity companies, continues to trade at a significant discount to NAV. In May the Board proposed a new dividend policy to provide a long-term solution to narrow the discount by providing regular and more predictable distributions. The new policy, which was approved by shareholders in July, provides distributions at a rate of 3% of NAV per year in two instalments. The directors have accordingly declared an interim dividend of 14 cents per share. This implies an annualised yield as at 31 August 2012 of 5%.

Outlook

I am pleased with the progress the Company has made during the first half of the year. As I outlined above, the strategic initiatives that have been approved in this period put the Company in a better position to provide superior returns to our shareholders. Our SFM listing and simplification of our share capital structure is now more suitable to our shareholder profile; our investment strategy is better placed to take advantage of the opportunities we are seeing to invest in high quality micro cap businesses; and the dividend policy is more appropriate for our investors.

I believe that the Company is on course to create significant further value for shareholders. Even in the challenging economic environment that we can anticipate during the coming year, we can expect to make good progress.

David Macfarlane

Chairman

9 October 2012

Investment Adviser's Report

Dear Fellow Shareholders

We are pleased to report that JZCP had an active investment period for the six months ending 31 August 2012, taking advantage of attractive investment and realization opportunities across our portfolios. The Company has also been busy with a number of strategic initiatives, all of which received strong support from shareholders, and are aimed at permitting JZCP to generate further profitable growth going forward.

We invested US$130.8 million in 17 new investments and realized US$44.0 million from 11 investments. During this period, JZCP's total NAV return (which we define as the percentage change in JZCP's Net Asset Value during the relevant period inclusive of dividends paid to shareholders) was 1%. Before paying an 18.5 cent dividend in July 2012, our NAV per share increased from US$9.47 to US$9.56; after paying the dividend the NAV per share was US$9.38.

The financial condition of JZCP continues to be strong. Our liquidity (cash and government securities) as of 31 August 2012 was US$97.2 million, 16% of our NAV. In addition we have US$164.8 million of publicly traded securities, equities, and bank debt. Overall, the cash and publicly traded securities portion of our portfolio is 43% of our NAV. We have no outstanding debt and our only long term obligations are our Zero Dividend Preference shares which accrete to US$122.5 million due in June 2016.

Against an ongoing uncertain macro-economic backdrop, JZCP's underlying portfolio companies, both in the U.S. and Europe, have performed well on an operating basis during this interim period. On a combined basis, EBITDA of all of our micro cap businesses increased 10% over the relevant six months.

Our micro cap portfolio is valued at 6.7x EBITDA after a 24% marketability discount. The underlying leverage senior to JZCP's position in our micro cap portfolio, both in the U.S. and Europe, is under 1.5x EBITDA. Our European micro cap portfolio, currently consisting of five Spanish businesses, is performing well in a challenging macro-environment. They are high quality companies that grew through the recent recession. Given the financial environment in Spain, we have been able to buy these businesses at very attractive cash multiples --- 3.8x. We expect outsized returns from these businesses to more than compensate the increased risk in investing in a distressed economy.

Our core business and predominant driver of NAV growth comes from our diversified micro cap portfolios, which consists of 30businesses across 6 different principal business sectors. The portfolios are diversified geographically with the majority of the investments in the U.S while 14% of total assets are in Europe and earlier this year we made our first investment in Latin America. In addition, our portfolio is well diversified across vintage years.

We remain focused on securing attractive opportunities in the micro cap sector using our proprietary networks of intermediaries in both the US and Europe. Our specialist co-investment partners have successful track records of investing globally, such as Baird Capital Partners in the US, JZ International in Europe and ACON Latin America in Brazil

Strategic Initiatives

In July 2012, we completed the restructuring of our Ordinary and Limited Voting Shares to create a single class of ordinary shares which are listed on the Specialist Funds Market of the London Stock Exchange.

The new Ordinary share class structure is more appropriate to the mix of investors who own the Company and has removed a structural inadequacy that had restricted the Company's ability to accommodate US investors. The SFM listing will also help ensure that the full market capitalization of the Company is represented accurately by suppliers of market data (whereas previously the market capitalization was often reported without reference to the Limited Voting Ordinary shares) without any dilution to our shareholders.

Investing in micro cap companies has historically been the main driver of NAV growth and will continue to be so. However, our opportunistic approach has led us to some exciting new opportunities in the credit and real estate sectors which will complement our core micro cap strategy. As we mentioned in the recent annual report, we have started to diversify the portfolio into asset classes, such as real estate and distressed debt. It is important to note that we are applying the same disciplined approach to these investments as we have always used; buying businesses at reasonable values in conjunction with excellent management teams. For our real estate investments, we have been backing a management team that has extensive (and successful) experience in buying smaller off-market properties that are priced accordingly. The Company is also establishing a new asset management business in the US that will address the growing demand from endowments and pension funds for fiduciary management services.

The shareholder support for the recent strategic initiatives has been encouraging and as expected the company is progressing well under its new listing and share structure. We look forward to updating the market on the progress of the early stage investments later in the year.

NAV Growth

For the six months ending 31 August 2012, JZCP's net assets increased from US$9.47 per share to US$9.56, a 1% increase, before the 18.5 cent dividend paid in July 2012. The chart below shows the source of this change:

Note that most of the reduction in the Private Investments is due to a write down (13 cents) in our environmental testing company (Accutest Holdings, Inc.), as the continued malaise in the commercial real estate market has negatively affected the pricing and response times in this industry. This was offset by an increase in our sensor companies (11 cents), as both businesses (Amptek, Inc. and Nielsen-Kellerman) continue to outperform expectations.

The euro / dollar exchange rate change had a negative impact on our NAV, by 5 cents. Since 31 August 2012, the Euro has appreciated against the dollar; we have entered into a currency hedge of €13 million, to protect our position in direct loans made to European Micro Cap Fund (EMF) businesses.

Returns

The chart below summarizes the total NAV returns and total shareholder returns for the most recent 3 months, year and since the refinancing and restructuring in June 2009):

Despite our fairly valued portfolio, the market continues to undervalue our assets, a recurring trend across most of the listed private equity sector.

Portfolio summary

Below is a summary of JZCP's assets as of 31 August 2012 compared with the position as of 29 February 2012 fiscal year-end, six months ago.

As mentioned below, the reduction in the Listed Equities is due to a successful sale of a significant portion of our

TAL stock

US micro cap portfolio

Our core US micro cap portfolio continues to perform well and on a combined basis the investee companies have achieved year-over-year EBITDA growth, an impressive achievement in this market environment. All of these investments employ low leverage, currently under 1.5x EBITDA of debt senior to JZCP's position. The average multiple used in valuing these entities continues to be low at 6.8x.

As mentioned above, we have written up two of our US micro cap investments (Amptek, Inc. and Nielsen Kellerman) in the sensors industry, as they continue to outperform our expectations. Offsetting this uplift is the effect that the commercial real estate downdraft has had on our environmental testing business (Accutest Holdings, Inc.); we have written this investment down, and continue to keep a close eye on this business.

We were able to put US$85.7 million to work in our US micro cap portfolio, primarily from the following:

New Investments - Verticals

We invest in our verticals with Edgewater Growth Capital Partners. When combined with Edgewater, we have a majority position in all of our verticals.

•Industrial Services

We made four acquisitions into our Industrial Services' vertical.

In April, we acquired Bay Valve which is an industrial valve distributor and provider of valve field services and equipment repair throughout the western United States. Its primary markets are petrochemical and power generation. JZCP purchased US$18.9 million of senior and subordinated notes, and a nominal amount of common stock. JZCP's equity interest in this entity is 31%.

In May, we purchased Gator Compressor, a small independent dealer of used and refurbished air compressor equipment and associated filter, lubricant and sundry parts. The company stocks a wide variety of inventory, and is capable of supplying aftermarket equipment and parts for a wide variety of OEM compressor brands. JZCP purchased 33% of this business with US$1.5 million of senior notes.

In June, we purchased National Compressors, which provides air compressor services and solutions to manufacturing plants across several end markets, including steel, power generation, automotive, and industrial and general manufacturing. We purchased US$4.4 million of senior notes, and acquired 31% of this business.

Finally, we made an investment in Pennsylvania Electric Motor Services, which specializes in the repair, rebuild, maintenance and installation of electric motors in a wide variety of uses, from integrated motion control devices to more mundane electric motors installations. The company services customers in a wide variety of end markets, including mining, metals, chemicals, and automotive industries. JZCP purchased US$6.6 million of senior and subordinated notes, and acquired 34% of the business' equity.

•Health Revenue Cycle Management

We made our first investment in our new Healthcare Revenue Cycle Management vertical. MEDS is an outsourced provider of patient benefit eligibility, enrolment and revenue recovery services to hospitals and health systems. MEDS helps its customers increase cash flow and accelerate cash collections by securing government-funded reimbursement for uncompensated medical expenses provided to uninsured and underinsured patients. JZCP purchased US$7.2 million in senior notes, and US$5.9 million of preferred and common stock, and acquired 30% of the equity of this business.

Mike Shea, our industry executive in this vertical has extensive experience in helping hospitals manage their cash flows though MEDS-type vehicles. He founded, built, ran and sold a large MEDS competitor, achieving exemplary returns for his investors. His reputation in this growing segment of the healthcare industry has helped populate a very active acquisition pipeline.

•Water Services

We made our second acquisition in our Water Services vertical. LMK is a nationwide provider of non-invasive, long- lasting repair of underground water pipes. Using patent protected proprietary technologies, LMK products allow for repair of leaking pipes with minimal or no excavation. The deterioration of infrastructure in US cities and towns implies significant growth opportunities for LMK. JZCP purchased US$6.0 million of senior notes, and US$4.2 million of preferred and common stock for 20% of this business.

•Testing Services

We made our second acquisition in our Testing Services vertical. Argus Group sells, rents and services industrial hygiene and safety equipment including gas monitoring and measurement equipment and personal protective equipment. The company's clients span a wide range of industries, from environmental consulting firms to industrial businesses. JZCP purchased $2.5 million in senior notes, and $2.9 million in preferred and common stock, and acquired 31% of the equity in this business.

New Investments - Co-Investments

Similar to our Verticals strategy, the combination of JZCP's and our partners' equity always creates a majority position in these companies.

• Along with Baird Capital Partners, we purchased 11% of MedPlast/UPG, a precision molded medical plastics business. This company designs, engineers and produces precision molded thermoplastic, rubber and elastomer components primarily for the healthcare and pharmaceutical markets. The close tolerances and highly monitored processes allow Medplast/UPG to garner higher-than-average margins. It operates from ten locations worldwide, has eight clean room production facilities, and a complete line of sub-assembly services. JZCP purchased US$10.0 million of subordinated notes, and US$7.5 million of preferred and common stock.

• Also with Baird, we purchased 19% of PC Helps, a provider of on-demand "how to" support and workforce productivity training solutions associated with software applications and mobile devices used every day at Fortune 500 and middle-market companies, federal agencies and higher education institutions. The company specializes in support for Microsoft Office and other applications and for the full range of mobile devices on the market today. JZCP invested US$9.0 million (preferred and common stock) into this business. This was a post-period acquisition, made in September 2012.

• Along with the ACON Investments group, we purchased 9% of Suzo-Happ, a designer, manufacturer and distributor of components, parts and supplies for the global gaming and amusement markets, servicing both the OEM and aftermarket channels. The growth in gaming throughout the world creates significant growth opportunities for Suzo- Happ; their products are used in most every slot machine manufacturers' products. JZCP invested US$5.0 million for its equity.

• In conjunction with ACON Latin America, a successful fund which has been investing in Latin America for 15 years, we invested in BSM Engenharia S.A., a provider of supply chain logistics, infrastructure services and equipment rental to oil and gas, petrochemical, mining and energy markets in Brazil. It operates from four ports in Brazil and its blue chip customer list includes Petrobras, Acelor Mittal and ThyssenKrupp. We purchased 4% of this business for US$6.1 million of stock.

European investments

As previously highlighted, JZCP has invested in a European Micro Cap Fund (EMF) which was established in 2010. It is managed by JZ International, a private equity company set up in 1999 by David Zalaznick, Jay Jordan, and Jock Green- Armytage, the former chairman of JZ Equity Partners. The fund invests in established and consistently profitable European micro cap companies with experienced management teams. Prior to the establishment of EMF, JZ International invested its own capital in a wide range of platform and add-on companies across Europe, including the UK, Spain, Italy, the Netherlands, Sweden, Norway and Finland.

JZCP now has US$62.4 million invested in the EMF which has a carrying value of US$80.8 million. This includes a new 30% investment in Oro Direct, which EMF purchased for €13.5 million alongside a co-investor in March 2012. Oro Direct is a leading buyer of precious metals in Spain; Oro also sells investment grade gold and silver. This business is very scalable and opened an office in Austria immediately after the EMF transaction closed.

The other four EMF businesses are operating well, despite the continued negative news from Spain. With the exception of exchange rate movements, their underlying valuations since the beginning of this fiscal year have not changed. All five investments represent approximately 14% of JZCP's total assets as of 31 August 2012.

Other assets

Over the past year, the bulk of our Mezzanine Portfolio has been re-paid. We currently have two investments of size, TTS Service Logic (a heating, ventilation and air conditioning services business) and HAAS (an automobile paint system supplier company). Both companies are performing well, and paying cash interest per their terms.

The only Legacy investment left of any size is Healthcare Products, our power wheelchair company. Despite the myriad of issues surrounding Medicare, its primary customer, this company continues to perform to plan.

Our Listed Equities have risen since the beginning of the year: TAL (the international container leasing company) and Safety Insurance (a Massachusetts based insurance company) together accounted for a NAV per share increase of 5 cents or US$3.4 million. Note that during this period we were able to sell 66% of our remaining TAL position for US$26.7 million; we have 357,418 TAL shares remaining from our initial position of 1.4 million shares.

As outlined above, we are continuing to pursue a number of Real Estate opportunities. As previously reported, we have invested US$16.8 million in what is almost an entire city block in the Williamsburg area of Brooklyn. That investment is progressing well as we begin a two to three year renovation program and start to acquire new retail and residential tenants. Post this interim period, we closed on another Brooklyn property across the street from the new Barclay's Center; the investment was approximately US$3.1 million. We also have deposits on two other properties and are proceeding with due diligence.

Balance sheet

Below is a summary of our Balance Sheet:

Principal Risks and Uncertainties

As an investment fund, our principal risks are those that are associated with our investment portfolio. Given the nature of the portfolio, the principal risks are associated with the financial and operating performance of the underlying investments, along with market risk associated with the publicly listed equities.

Outlook

Our investment strategy is to achieve superior returns by investing your (and our) money in a diversified portfolio of good quality niche businesses at reasonable prices. As the uncertainty in the world is manifested by deleveraging across many asset classes, JZCP's strong balance sheet and liquid assets will enable us to take advantage of great investment opportunities. We think our value oriented, value-added approach will yield strong NAV growth and we look forward to the second half of the year with confidence. Since our Board has initiated a policy of paying an annual dividend (in two instalments) equal to 3% of NAV, we expect the dividend growth will follow accordingly.

As always, thank you for your confidence in our investment strategy. Please feel free to contact us with any ideas that might be beneficial to JZCP.

Yours faithfully

Jordan/Zalaznick Advisers, Inc.

9 October 2012

Valuation Policy

Principles of valuation

In valuing investments in accordance with International Financial Reporting Standards, the Directors follow a number of general principles as detailed in the International Private Equity and Venture Capital Association ("IPEVCA") guidelines. Investments held by the Company's associate 'EuroMicrocap Fund 2010, LP' are also valued on the basis set out below.

Investments are valued according to one of the following methods:

i) Mezzanine loans

Investments are generally valued at amortised cost except where there is deemed to be impairment in value which indicates that a provision should be made. Mezzanine loans are classified in the Statement of Financial Position as loans and receivables and are accounted for at amortised cost using the effective interest method less accumulated impairment allowances in accordance with IFRS.

The Company assesses at each reporting date whether a financial asset or group of financial assets classified as loans and receivables is impaired. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the net present value of expected cash flows discounted at the original effective interest rate.

ii) Unquoted preferred shares, micro cap loans, unquoted equities and equity related securities

Unquoted preferred shares, micro cap loans, unquoted equities and equity related securities investments are classified in the Statement of Financial Position as Investments at fair value through profit or loss. These investments are typically valued by reference to their enterprise value, which is generally calculated by applying an appropriate multiple to the last twelve months' earnings before interest, tax, depreciation and amortisation ("EBITDA"). In determining the multiple, the Directors consider inter alia, where practical, the multiples used in recent transactions in comparable unquoted companies, previous valuation multiples used and where appropriate, multiples of comparable publicly traded companies. In accordance with IPEVCA guidelines, a marketability discount is applied which reflects the discount that in the opinion of the Directors, market participants would apply in a transaction in the investment in question.

In respect of unquoted preferred shares and micro cap loans the Company values these investments by reference to the attributable enterprise value as the exit strategy in respect to these investments would be a one tranche disposal together with the equity component. The fair value of the investment is determined by reference to the attributable enterprise value (this is calculated by a multiple of EBITDA reduced by senior debt and marketability discount) covering the aggregate of the unquoted equity, unquoted preferred shares and debt instruments invested in the underlying company. The increase of the fair value of the aggregate investment is reflected through the unquoted equity component of the investment and a decrease in the fair value is reflected across all financial instruments invested in an underlying company.

(iii) Traded loans

Traded loans including first and second lien term securities are valued by reference to the last indicative bid price from recognised market makers. These investments are classified in the Statement of Financial Position as Investments at fair value through profit or loss.

(iv) Listed investments

Listed investments are valued at the last quoted bid price. These investments are classified in the Statement of Financial Position as Investments at fair value through profit or loss.

Investment Review

* Book cost to JZCP equating to transfer value as at 1 July 2008 upon the liquidation of JZEP and adjusted for subsequent transactions. The book cost excludes the transfer value and subsequent Payment In Kind ("PIK") investments.

**Original book cost incurred by JZEP/JZCP adjusted for subsequent transactions. The book cost represents cash outflows and excludes PIK investments.

*** Legacy Investments. Legacy investments are excluded from the calculation of capital and income incentive fees.

Mezzanine Portfolio includes common stock with a carrying value of US$1,691,000these investments are classified as Investments at fair value through profit or loss.

Unaudited Statement of Comprehensive Income

For the Period from 1 March 2012 to 31 August 2012

All items in the above statement are derived from continuing operations.

The profit for the period is attributable to the Ordinary shareholders of the Company.

The format of the Income Statement follows the recommendations of the AIC Statement of Recommended Practice. There was no comprehensive income other than the profit for the period.

Unaudited Statement of Financial PositionAs at 31 August 2012

These unaudited financial statements were approved by the Board of Directors and authorised for issue on 9 October 2012. They were signed on its behalf by

David Macfarlane Patrick Firth

Chairman Director