Last checked at 3 Nov 2011 13:08
REGULATORY ANNOUNCEMENT
Blue Planet Financials Growth & Income Investment Trusts No 1-10 plc
Half Yearly Report and AccountsFor the six months ended 30 September 2011Blue PlanetFinancials Growth and Income Investment Trusts plc
Blue Planet Financials Growth and Income Investment Trust No 1 plc (Registered Number 162796)
Blue Planet Financials Growth and Income Investment Trust No 2 plc (Registered Number 162797)
Blue Planet Financials Growth and Income Investment Trust No 3 plc (Registered Number 162798)
Blue Planet Financials Growth and Income Investment Trust No 4 plc (Registered Number 162799)
Blue Planet Financials Growth and Income Investment Trust No 5 plc (Registered Number 162800)
Blue Planet Financials Growth and Income Investment Trust No 6 plc (Registered Number 162801)
Blue Planet Financials Growth and Income Investment Trust No 7 plc (Registered Number 162802)
Blue Planet Financials Growth and Income Investment Trust No 8 plc (Registered Number 162803)
Blue Planet Financials Growth and Income Investment Trust No 9 plc (Registered Number 162804)
Blue Planet Financials Growth and Income Investment Trust No 10 plc (Registered Number 162805)
Each of the above named investment trusts is a separate limited company registered in Scotland, but otherwise they are to all intents and purposes identical. The information contained in this Half Yearly Report and Accounts, including the financial statements, applies equally to each of the ten Blue Planet Financials Growth and Income Investment Trusts (the "Trusts"), and reference to the "Company" shall be deemed to be a reference to each of them.
Trading in the shares of the Trusts
The Trusts' shares can be traded in share units on the London Stock Exchange,under code "BPFU". Each unit comprises 10 shares, 1 in each of the 10 trusts.It is generally cheaper for investors to trade in the units rather than the
underlying shares.Officers and AdvisorsDirectors Investment Manager
Victoria W Killay (Non-Executive Blue Planet Investment Management Ltd Chairman)
Dean Bucknell (Non-Executive) 18A Locker Street Glenn Cooper (Non-Executive) - Sliema resigned on 24 July 2011 Malta SLM 3124
The Rt Hon Lord Steel of Aikwood Telephone No: +356 2131 4309 (Non-Executive) - appointed on 6
September 2011 Facsimile No: + 356 2131 5219 Local call rate from UK: 0845 527 7588 e-mail: info@blueplanet.eu www.blueplanet.eu Administrator, Secretary and Registrars Registered Office
Blue Planet Investment Advisers Ltd Capita Registrars Greenside House The Registry 25 Greenside Place 34 Beckenham Road Edinburgh EH1 3AA Beckenham Telephone No: +44 131 466 6666 Kent BR3 4TU Facsimile No: + 44 131 466 6677 Shareholder Helpline No: 0871 664
0300 (calls cost 10p per minute plus e-mail: info@bpia.eu network extras, lines are open 8:30am - 5:30pm Mon - Fri) www.bpia.eu From overseas: +44 208 639 3399 e-mail: ssd@capitaregistrars.com www.capitaregistrars.com
Chartered Accountants and Statutory Bankers
Auditor Deloitte LLP Lloyds TSB Bank Plc Saltire Court 1st Floor 20 Castle Terrace 48 Chiswell Street Edinburgh EH1 2DB London EC1Y 4XX Stockbroker Custodians Fairfax Plc RBC Dexia Investor Services Trust 46 Berkeley Square, Mayfair 71 Queen Victoria Street London WIJ 5AT London EC4V 4DE
Blue Planet Investment Management Ltd is authorised and regulated by the Malta Financial Services Authority.
Blue Planet Investment Advisers Ltd is authorised and regulated by the Financial Services Authority
Blue Planet Financials Growth & Income Investment Trusts No.1-10 plc are members of the Association of Investment Companies.
Investment Policy and Objectives
The investment policy of the Company is to invest in securities (as defined bythe Financial Services & Markets Act 2000) including equities and debt issuedby quoted financial companies located anywhere in the world with the objectiveof providing investors with a total return greater than the Bloomberg WorldFinancial Index. Not more than 15% of the Company's portfolio may be investedin any one entity at the time the investment is made. The maximum gearing thatwill be employed is set by the Directors from time to time and is currently 50%of shareholders funds (the Company's Articles permit a maximum gearing of 50%).The Company's benchmark index is the Bloomberg World Financial Index and thereis no restriction on the amount that may be invested in any one country. Theactual number of investment holdings and sub-sector allocations, the level ofgearing and country allocations will depend on market conditions and thejudgement of the Board of what is in the best interest of shareholders.Financial Record Six months Six months Year ended ended ended 31 March 30 September 30 September 2011 2011 2010 (audited) (unaudited) (unaudited) Shareholders' funds (£'000) 754 1,179
1,070
Net asset value per share (p) 5.52 8.62 7.83 Share price (p) (Bid) 2.80 6.20 4.80 Discount (%) 49.3 28.1 38.7 Gearing (%)* - 48.4 47.2 Return available for shareholders (20) (4) (37)(£'000) Revenue return per share (p) (0.14) (0.03) (0.27) Total return per share (p) (2.17) (3.98) (5.21) Dividend per share (p) - - -
Dividend yield on our shares (%) - - - Dividend yield on Benchmark Index 3.31 2.44
2.35
(%)
* Net debt as a percentage of shareholders' funds
Dividend
No interim dividend has been declared.
The Investment Manager
Blue Planet Investment Management Ltd (BPIM) is a Malta based investment management company. It is a totally independent and specialises in managing investments in financial companies.
BPIM as the Investment Manager of the Company receives an annual fee of 1.50%per annum of the total assets of the Company which is paid monthly. Mr DeanBucknell is a Director of BPIM which is owned by an Employee Trust for thebenefit of its employees. Blue Planet Investment Advisers Ltd providesadministration and secretarial services to the Company at an annual fee of £10,000 per annum. Blue Planet Investment Advisers Ltd also provides aninvestment advisory service to BPIM. The investment management, administrationand secretarial services agreements may only be terminated on receipt of twoyears' notice.In addition to Blue Planet Financials Growth & Income Investment Trusts No 1-10plc, BPIM also manages the Blue Planet International Financials InvestmentTrust plc (formerly Blue Planet European Financials Investment Trust plc) andthe Blue Planet Worldwide Financials Investment Trust plc. Details of the BluePlanet Saving Scheme, investment trusts and other products can be obtained fromthe fund administrator and company secretary Blue Planet Investment AdvisersLtd, Greenside House, 25 Greenside Place, Edinburgh, EH1 3AA (Tel no: +44 131466 6666), email: info@bpia.eu, website: http://www.bpia.eu.
Website Information
Please take the time to visit our website:
www.blueplanet.eu
If you wish to receive a monthly fact sheet on the trusts please visit:
http://www.blueplanet.eu/blueplanet_downloads.136.html
To download historical Annual and Interim reports and past monthly fund fact sheets:
http://www.blueplanet.eu/blueplanet_downloads.124.html
To view stock market RNS announcements:
http://www.blueplanet.eu/blueplanet_news.8.html
Interim Management Report
Performance
Over the last few years since the onset of the global financial crisis,successful investment timing in markets has been a difficult task. Volatilityhas been extreme, as a lack of sustained confidence pervades the market. Beingthe wrong side of a sudden market plunge, or missing out on a short rally,which is often snuffed out within days, has a huge impact on performance. Anindex can experience movements in excess of 2% in a day, and individual stockscan amplify that many times over with 10% rises or falls not uncommon. Theperipheral European countries' debt crisis has been the main and continuingcause of volatility both in 2010 and 2011 and has impacted worldwide markets.When added to that there have been natural disasters in New Zealand and Japan,extraordinary political unrest in the Middle East and North Africa, andfluctuating views on the pace of economic recovery in the US and China,, it isnot surprising that the past six months has been a bumpy ride.The net asset value ("NAV") of your Fund has regrettably fallen 29.5% in thelast half year, more than the Fund's benchmark index, which has fallen 23.1% inthe same period. The Trust's share price has fallen 41.7% since the year endand the discount to NAV has widened significantly to 49.3%.The recent past performance of the Trust has been acutely affected by theproblems that have beset global financial shares. It has also been adverselyaffected by its high Total Expense Ratio, which arises because of the smallsize of the Fund, and by the high costs of a £7.5m fixed rate, fixed term loan.If these two costs are added together, by the end of the interim period, theyaccounted for over 13% of the Fund's total assets. Without these prohibitivelyhigh costs, it can clearly be seen that the Fund would have outperformed,rather than underperformed its benchmark. The fixed term loan period is due toend in January 2012. The Directors are addressing the issue of the high TotalExpense Ratio as a top priority.The details of the current portfolio are outlined below. Its content denotes acautious stance. European stock indices have been on a downward trend sincemid-February with the Euro debt crisis. In the last two months these fears havespread to global stock markets, as, despite continued profit growth in UScorporates and within many emerging markets, fears of a new global recessionhave multiplied. Standard & Poors downgrading of the USA's AAA credit ratingafter the protracted political wrangling over the US debt ceiling to save itfrom a default, precipitated sharp falls. We intend to remain cautious, as themarkets remain very nervous until clarity is achieved on the future of theEuro-area and its most indebted countries.
Portfolio
At the end of the interim period a year ago the portfolio held short-dated,higher-yielding corporate bonds. These were redeemed or sold before the end of2010 and equity investments were increased, as this asset class enjoyed astrong end to 2010. Thus, at the last year end the portfolio was primarilyinvested in equities. During 2011, as we turned more cautious on the outlookfor equity markets, gearing in the fund was reduced to zero, and an emphasiswas placed on increasing the yield in the portfolio, as bonds werere-introduced and the level of investments in equities was substantially cut.Equity investments have been retained in a number of well-capitalised andprofitable financial companies in stronger economies and short-term hedgingpositions in reverse index trackers were in place. The bonds in the portfolioare either sterling or US dollar denominated. Cash is held both on deposit andin liquidity funds, this is mostly in sterling, apart from a Norwegian kronerterm deposit.
Figure 1: Portfolio movements - by security type
Security Type Sep-11 Mar-11 Cash & Liquidity 58.5% 13.2%Funds Equities 18.7% 86.8% Bonds 22.8% - Total 100.0% 100.0%
Figure 2: Portfolio movements - geographic locations of holdings
Country Sep-11 Mar-11 UK 54.4% 19.6% Euro-area 12.4% 0.8% USA 12.3% 34.9% Norway 10.4% 0.0% Russia 5.7% 7.2% Australia 2.8% 0.0% Switzerland 1.1% 0.0% Czech Republic 0.9% 0.0% Rep of Ireland 0.0% 16.4% India 0.0% 14.5% Indonesia 0.0% 4.5% Thailand 0.0% 2.1% Total 100.0% 100.0%The largest geographic location for investments at the end of the interimperiod was the UK. This is largely due to cash holdings in sterling. Whilstremaining wary of all the problems facing the UK economy, the Fund held sharesprimarily in insurers and asset-managers since the second half of 2010. Theseequity holdings were subsequently sold to take profits and the proceeds wereused to purchase bonds, or held as cash. The Fund ended the interim period withUK investments in a Lloyds TSB and Close Brother Group bonds and smallcross-holdings in the Blue Planet Worldwide Financials Investment Trust and theBlue Planet International Financials Investment Trust, both of whose NAV valueswere at significant premium to their share prices. Immediately following thehalf-year end a position in a long-dated corporate bond fund has been added.Exposure to the Euro-area is currently low, with the nearly half of itcomprising a position in a sterling denominated liquidity fund located inLuxembourg, and most of the rest comprising short-term positions in reverseindex trackers that were being used as generic market hedges and have sincebeen removed from the portfolio. We expect to retain a limited exposure to theEuro-area whilst fiscal concerns persist and depress European financials shareprices. Despite the recent strength of the German economy, full year 2011 GDPgrowth will be modest for the EU as a whole, and concerns are rising of adouble dip recession. No holdings remain in Ireland, as the BP GlobalFinancials hedge fund domiciled in Ireland was redeemed in July 2011.Outside the Euro-area there is an equity investment in the Czech Republic, aholding in Komercni Banka owned by Societe Generale. This is a well-runprofitable bank, in one of Eastern Europe's best-managed economies, that alsoprovides a very good yield. There is also a sterling-denominated bond issued bythe Swiss-based insurer Swiss Life, which has no exposure to the peripheralEuro-area countries suffering from debt-problems.Over the last six months equity investments in the US have been concentrated onthe card servicers and asset managers, as card services companies have beenseeing charge-offs falling sharply, and the asset managers have increasedassets under management and grown fee income. These investments have been cutsharply as the equity component of the portfolio has been reduced. USinvestments at the end of the interim period were equity investments in JPMorgan Chase & Co, Discover Financial Services, KKR & Co and Morgan Stanley.There is also a holding in a preferred stock exchange-traded-fund andsterling-denominated bonds issued by AIG and J. P. Morgan. As the third quarterresults are reported, some changes are expected to these holdings.The outlook for the Nordic economies is far stronger than for most mainlandEuropean economies, especially Norway, whose prudent public finances are theenvy of most economies worldwide. The Fund has some of its cash placed in aterm deposit in Norwegian kroner, which attracts a far better rate of interestthan deposits in sterling.Russian banks went through a tough year in 2009, as bad debts soared andprofits were largely eaten up by provisioning. The smaller banks in Russiasuffered the most and this has led to a shake-up in the Russian banking sector,with 100 fewer banks in operation now. The major banks strengthened theirpositions and saw profits picking up in 2010. This recovery has beenaccelerating in 2011, as demand for loans increases, margins stabilise andprovisions for bad loans are lower. High inflation has been a concern. This hasmoderated as the year progresses and the Russian Central Bank has raisedinterest rates and has taken steps to return reserve requirement rates forbanks to pre-crisis levels. However banking penetration in Russia is low and asdisposable income increases, retail lending should see strong growth. The Fundholds equity positions in Russia's largest bank, Sberbank, and a small positionin Bank St Petersburg. It also holds high-yielding, short-dated Eurobondsdenominated in US dollars in three Russian banks - Nomos Bank, Alfa Bank andRussian Agricultural Bank.As equity holdings have been reduced during 2011 Indian, Indonesian and Thaiholdings have been sold. All have under-penetrated banking markets. Thevaluations of Indian banks are low, and the Indonesian and Thai economiesremain robust through all the turmoil of Western economies. These are countrieswhich the Fund will undoubtedly return to. The only holding in the Fund in AsiaPacific at the half-year end was a National Australia Bank bond, denominated insterling.
Borrowings, Gearing and Liquidity
Gearing stood at 47.2% at the March 2011 year end, but the level of equity investments were gradually reduced, with the Fund ending the interim period ungeared, net of cash.
The Fund has access to an unsecured, sterling, fixed loan of £750k per trust (£7.5m across all ten trusts) in place until 23 January 2012. This loan, which isa fixed loan and would incur breakage charges if repaid, was drawn down at
theend of the interim period.DividendNo interim dividend has been declared for the first half of the year.Investment income is considerably down from the level in the interim period ayear ago and despite administrative and interest expenses being lower therevenue return per share is sharply negative. The outlook for income for theremainder of the year is modest, despite the yield from the bonds. Thus it isunlikely that sufficient income will be available to resume paying a dividendin 2012. However, once the fixed loan period expires in January 2012, costsagainst income will reduce. The Directors appreciate the importance ofdividends to many shareholders and plan to resume dividend payouts as soon
asit is possible to do so.RiskYour Company is, and will continue to be, exposed to a number of risks whichare detailed in full in the Investment Managers Report in the Annual Report.The key market risk arises from the uncertainty regarding the future priceperformance of the equities held by your Company. If gearing is employed thisrisk is magnified. The Company is invested in a single industry sector. Beinginvested in a single sector exposes the Fund to the risk that the FinancialSector will underperform relative to other sectors of the market.Nevertheless, the financials sector remains a large part of the market andconstitutes nearly 19% of the Bloomberg World Index. Banks play a crucial andcentral role in free market economies, as the response of governments andcentral banks to the recent crisis has shown. The prices of the individualsecurities in the portfolio are monitored on a daily basis and the Board, whichmeets quarterly, imposes borrowing limits to ensure gearing levels areappropriate to market conditions. When gearing is employed the potential impactof changes to interest rates is taken into consideration. The securities we buyand sell are all listed on recognised exchanges and are readily realisable.The Fund is exposed to currency risk, due to the range of currencies in whichinvestments are held. A significant proportion of the Company's assets are heldin securities denominated in foreign currencies and movements in thesecurrencies can significantly affect the total return and net assets. The fundmanager tracks currency movements on a regular basis and hedging is consideredon a case-by-case basis.
Where investments are made in emerging markets there is a risk of higher volatility in the price performance of these equities and their associated currencies. Political risk and adverse economic circumstances are more likely to arise, putting the value of the investment at a higher risk. The registration and settlement arrangements in emerging markets may be less developed than in more mature markets so operational risks of investing are higher.
Going Concern
The Company's business activities, together with the risk factors likely toaffect its future position are set out in this report. The Directors considerthat the Company has adequate financial resources in the form of readilyrealisable listed securities, including cash and loan facilities to continue inoperational existence for the foreseeable future. For this reason they continueto use the going concern basis in preparing the accounts.
Blue Planet Services and Price Information Sources
Shareholders can view the Company's share price and additional informationabout the Fund on the website of Blue Planet Investment Management Ltd(www.blueplanet.eu) and the London Stock Exchange (www.londonstockexchange.com). To find the Company's share unit price on the London Stock Exchange websitego to the Home page and type "BPFU" in the "Price Search" field.
Blue Planet Investment Advisers Ltd offers a Blue Planet Investment Trust Savings Scheme via Equiniti Financial Services Limited (on behalf of Lloyds TSB) to enable lump sum investments or regular savings.
Board Changes
In July 2011 Glen Cooper retired from the Board and I would like to thank himfor his diligent service. In his stead I am very pleased to announce that inSeptember the Rt Hon Lord Steel of Aikwood was appointed to the Board.
Outlook
Despite the problems the market has faced, company balance sheets have beenstrengthened over the past couple of years, as companies learned hard lessonsfrom the financial crisis that unfolded in 2007 and 2008, and profits, in atleast the first half of the year, have remained strong. European banks alonehave added over €270bn of core Tier 1 capital since 2008, which is an increaseof almost 50%. A large number of announced mergers and acquisitions havehighlighted an increased willingness for corporates to buy. Amongst financials,Santander followed its purchase of a 70% stake in Bank Zachodni in Poland in2010, with an offer for the remainder of the bank in 2011. Capital One, inwhich the Fund is invested, has made two acquisitions this year and WarrenBuffet has recently bought into Bank of America. Financial company'sprofitability has been increasing, but valuations are very low. Many insurersand banks in both the US and Europe have seen their valuations fall to below 1xtangible book value in August 2011 - the same as they did in the first fewmonths of 2009. In Europe, bank multiples imply that either earnings in 2012will be over 50% below current forecasts, if earnings multiples are to approachaverage levels, or that there is a great deal of upside for European bank shareprices.These valuations provide good opportunities for long-term investment, however,with the current volatility, the Fund will continue to focus on a core ofequities in the better managed economies, as well as high dividend yieldingstocks and fixed income. Ultimately we expect financial markets to recover oncea resolution is found to the Euro-area crisis. Until that time we intend tomaintain a cautious stance.
I would like to thank all shareholders for your continuing support.
Victoria W KillayChairman03 November 2011Income Statement For the six months ended 30 For the six months ended 30 For the year ended 31 March September 2011 September 2010 2011 (unaudited) (unaudited) (audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ £ £ £ Capital (losses) / gains on investment Net realised losses - (396,101) (396,101) - (299,833)
(299,833) - (356,630) (356,630)
Unrealised gains / - 148,979 148,979 - (110,205) (110,205) - (77,874) (77,874)(losses) Exchange losses - (30,639) (30,639) - (165,422)
(165,422) - (198,533) (198,533)
Net capital losses on - (277,761) (277,761) - (575,460) (575,460) - (633,037) (633,037)investment Realised gain on lapsed - - - - 59,713 59,713 - - -warrants Income from investments 12,970 - 12,970 32,659 - 32,659 37,533 - 37,533 Bank interest 661 - 661 811 - 811 1,224 - 1,224receivable
Gross revenue and 13,631 (277,761) (264,130) 33,470 (515,747) (482,277) 38,757 (633,037) (594,280) capital losses
Administrative expenses (22,456) (6,612) (29,068) (24,870) (10,617) (35,487) (51,466) (17,763) (69,229)
Net return before (8,825) (284,373) (293,198) 8,600 (526,364) (517,764) (12,709) (650,800) (663,509)interest payable and taxation
Interest payable (11,115) (11,115) (22,230) (13,015) (13,015) (26,030) (24,385) (24,385) (48,770)
Return on ordinary (19,940) (295,488) (315,428) (4,415) (539,379) (543,794) (37,094) (675,185) (712,279)activities before taxation Taxation on ordinary 407 (415) (8) 853 - 853 579 - 579activities (note 3) Return on ordinary (19,533) (295,903) (315,436) (3,562) (539,379) (542,941) (36,515) (675,185) (711,700)activities after taxation Return per ordinary (0.14)p (2.17)p (2.31)p (0.03)p (3.95)p (3.98)p (0.27)p (4.94)p (5.21)pshare (note 4)
The Total column of the income statement represents the profit & loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
There were no recognised gains and losses other than those disclosed above.Accordingly a statement of total recognised gains and losses is not required.Balance Sheet At 30 At 30 At 31 March September September 2011 2011 2010 £ £ £ (audited) (unaudited) (unaudited) Fixed assets Listed equity investments 385,934 1,241,303 1,618,188
Listed non - equity investments 373,067 459,951
- Current assets 759,001 1,701,254 1,618,188 Debtors 77,199 165,854 35,251 Cash at Bank and in hand 876,285 228,889 245,084 Creditors: amounts falling due within (958,387) (117,417) (828,989)one year (note 7)
Net current (liabilities) / assets (4,903) 277,326 (548,654)
Total assets less current liabilities 754,098 1,978,580 1,069,534
Creditors: amounts falling due - (800,000)
- after more than one year Net assets 754,098 1,178,580 1,069,534 Capital and reserves Called-up share capital 136,677 136,677 136,677 Share premium account 1,180,248 1,180,248 1,180,248 Other reserves Capital reserve - realised (421,772) 125,082
17,164
Capital reserve - investment holding (103,997) (278,855) (247,030)losses Capital redemption reserve 8,450 8,450 8,450 Revenue reserve (45,508) 6,978 (25,975) Shareholders' funds 754,098 1,178,580 1,069,534 Net asset value per ordinary share 5.52p 8.62p
7.83p
(note 4)
Statement of Directors' responsibilities
The Directors confirm that this set of condensed financial statements has beenprepared in accordance with the ASB's Statement " Half Yearly FinancialReports" and that the interim management report herein includes a fair reviewof the information required by DTR 4.2.7 and DTR 4.2.8.On behalf of the BoardVictoria W KillayChairman03 November 2011Cash Flow Statement For the six For the six For the year months months ended ended ended 30 September 31 March 30 September 2010 2011 2011 £ £ £ (unaudited) (audited) (unaudited) Operating activities Investment income received 10,099 20,706 32,627 Interest received 161 810 1,224 Investment management and (18,450) (26,986)
(46,580)
administration fees paid Cash paid to and on behalf of (1,920) (2,071) (4,465)directors Other cash payments (14,950) (13,741) (20,092) Exchange differences on foreign (23,695) (165,422) (198,533)currency cash balances Net cash outflow from operating (48,755) (186,704) (235,819)activities (note 6) Servicing of finance Interest paid (22,044) (25,837) (48,640) Taxation Taxation recovered 1,187 2,723 3,793
Capital expenditure and financial
investment Purchase of investments (3,535,522) (7,576,097) (10,507,374) Sale of investments 4,243,279 6,628,986 9,647,305 Cash inflow / (outflow) before financ 638,145 (1,156,929) (1,140,735)ing
Management of liquid resources
Cash placed on deposit (177,605) - - Financing Proceeds from share issue - 560 560 Increase / (decrease) in cash 460,540 (1,156,369)
(1,140,175)
Reconciliation of Movements in Shareholders' Funds
Capital reserve- Capital Capital investment Total Share Share redemption reserve- holding
Warrant Revenue shareholders'
capital premium reserve realised losses
reserve reserve funds
£ £ £ £ £ £ £ £ For the six months ended 30 September 2011 (unaudited)
Shareholders' funds at 136,677 1,180,248 8,450 17,164 (247,030) - (25,975) 1,069,5341 April 2011 Return on ordinary - - - (438,936) 143,033 - (19,533) (315,436)activities after taxation Shareholders' funds at 136,677 1,180,248 8,450 (421,772) (103,997)
- (45,508) 754,09830 September 2011 For the six months ended 30 September 2010 (unaudited) Shareholders' funds at 136,621 1,179,611 8,450 552,835 (167,229) 59,846 10,540 1,780,6741 April 2010 Proceeds of share issue 56 504 - - - - - 560 Transfer from warrant - 133 - - - (133) - -reserve Realised gain on lapsed - - - 59,713 - (59,713) - -warrants Return on ordinary - - - (487,466) (111,626) - (3,562) (602,654)activities after taxation Shareholders' funds at 136,677 1,180,248 8,450 125,082 (278,855)
- 6,978 1,178,58030 September 2010 For the year ended 31 March 2011 (audited) Shareholders' funds at 136,621 1,179,611 8,450 552,835 (167,229) 59,846 10,540 1,780,6741 April 2010 Proceeds of share issue 56 504 - - - - - 560 Transfer from warrant - 133 - 59,713 - (59,846) - -reserve Return on ordinary - - - (595,384) (79,801) - (36,515) (711,700)activities after taxation Shareholders' funds at 136,677 1,180,248 8,450 17,164 (247,030)
- (25,975) 1,069,53431 March 2011 Notes
1. The financial statements for the six months to 30 September 2011 have been
prepared on the basis of the accounting policies set out in the Company's
Annual Reports and Accounts as at 31 March 2011 and in accordance with the
statement on half year financial reports issued by the ASB and applicable
UK law and accounting standards.
2. All expenses are charged to the revenue account with the exception of
management fees and interest charges on borrowings, one half of which less
the appropriate tax relief is charged to capital.
3. The taxation charge arises from overseas withholding tax on investment
income and overseas capital gains tax on sale of investments.
4. The return per ordinary share is based upon the following figures:
30 Sept 2011 30 Sept 2010 31 Mar 2011 (unaudited) (unaudited) (audited) Revenue return (£) (19,533) (3,562) (36,515) Capital return (£) (295,903) (539,379) (675,185)
Weighted average number of ordinary shares 13,667,700 13,663,977 13,667,700 in issue during the period
The net asset value per ordinary share is calculated on 13,667,700 ordinary shares in issue at the end of the period.
5. No interim dividend is proposed.
6. Cash Flow Statement
Reconciliation of net revenue return to net 30 Sept 30 Sept 31 Mar cash outflow from operating activities
2011 2010 2011 £ £ £ (unaudited) (unaudited) (audited) Net return before interest payable and (8,825) 8,600 (12,709)taxation Administrative expenses charged to capital (6,612) (10,617) (17,763) Increase in other debtors (7,155) (13,925) (1,730) Decrease in other creditors (1,334) (2,439) (1,899) Tax suffered on investment income (1,134) (2,901)
(3,185)
Exchange differences on foreign currency (23,695) (165,422) (198,533)cash balances
Net cash outflow from operating activities (48,755) (186,704) (235,819)
Reconciliation of net cash flow to movement 30 Sept 30 Sept 31 Marin net funds / (debt) 2011 2010 2011 £ £ £ (unaudited) (unaudited) (audited) Increase / (decrease) in cash balances 460,540 (1,156,369) (1,140,175) Increase in cash on deposit 177,605 - - Changes in net funds / (debt) resulting from 638,145 (1,156,369) (1,140,175)cash flows Exchange differences (6,944) - -
Movement in net funds / (debt) in the period 631,201 (1,156,369) (1,140,175)
7. Creditors falling due within one year include bank loans which are subject to a covenant which sets a maximum gearing threshold. Details of the loans outstanding at 30 September 2011 were as follows:
Amount (£) Interest Rate Repayment Date (%) Sterling loan 750,000 5.99 23 January 2012
8. At 30 September 2011 the Company had authority to buy back 2,049,000 of itsown shares in accordance with the authority granted at the Annual GeneralMeeting on 4 August 2011. No shares were bought back during the period underreview9. The figures and financial information for the year ended 31 March 2011 areextracted from the latest published accounts of the Company and do notconstitute statutory accounts for the period as defined in section 434 of theCompanies Act 2006. Those accounts have been delivered to the Registrar ofCompanies and include the report of the auditors which was unqualified and didnot contain a statement either under section 498(2) or 498(3) of the CompaniesAct 2006. The half yearly Report and Accounts have not been audited or reviewedby the Company's Auditors.Portfolio InformationAs at 30 September 2011 Country Valuation % of Name Portfolio (£) Equities 80,000 JPM Sterling Liquidity Luxembourg 80,000 4.9 Institutional Distribution Fund 34,037 Henderson UK & Europe Long Dated United 50,850 3.1 Credit Fund Kingdom 832 Lyxor ETF XBear CAC 40 France 38,761 2.4 908 Lyxor ETF XBear FTSE/MIB Italy 38,473 2.4 99,050 Blue Planet Worldwide Financials United 28,725 1.8 Investment Trust plc Kingdom 18,144 Sberbank Russia 25,401 1.6 1,137 JP Morgan Chase & Co United 21,893 1.3 States 1,444 Discover Financial Services United 21,178 1.3 States 931 iShares S&P U.S. Preferred Stock United 20,949 1.3 Index States 120 Komercni Banka A.S. Czech 14,237 0.9 Republic 1,102 Lyxor ETF STOXX Europe 600 France 11,954 0.7 Insurance 43,893 Blue Planet International United 10,534 0.6 Financials Investment Trust plc Kingdom 5,215 Bank St. Petersburg Russia 8,612 0.5 1,095 KKR & Co. L.P. United 7,278 0.4 States 781 Morgan Stanley United 6,738 0.4 States 90 Bank of America Corp United 351 0.0 States 385,934 23.6 Debt
Securities
87,800 Lloyds TSB Bank plc 6.625% 03/15 United 83,044 5.1 Kingdom 71,000 ASIF III Jersey Ltd 5.375% 10/16 Jersey 70,152 4.3 50,000 Close Brothers Group plc 6.5% 02/ United 50,309 3.1 17 Kingdom 46,000 JP Morgan Chase & Co 4.25% 01/17 United 46,478 2.8 States 46,000 National Australia Bank 3.625% 11 Australia 44,991 2.8 /17 49,400 Nomos Bank 6.5% 10/13 Russia 30,167 1.8 25,000 Swiss Re Co Ltd 6.3024% 03/49 Switzerland 18,047 1.1 26,500 ABH Financial Ltd 8.2% 06/12 Russia 16,941 1.0 19,800 RSHB Capital S.A. 7.175% 05/13 Russia 12,938 0.8 373,067 22.8 Listed 759,001 46.4
Investments
Cash 876,285 53.6 Total 1,635,286 100.0