Half-yearly Report
BlackRock Frontiers Investment Trust plc
Half Yearly Financial Report for the six months ended 31 March 2014
Investment Objective
The Company's investment objective is to achieve long term capital growth from
investment in companies listed or operating in Frontier Markets (defined as any
country which is not in either the MSCI Emerging Markets Index or the MSCI
Developed Markets Index).
Summary Investment Policy
The Company will seek to maximise total return by investing in the securities
of companies domiciled or listed in, or exercising the predominant part of
their economic activity in, Frontier Markets.
Performance record
Financial Highlights
31 March 30 September
2014 2013
US Dollar
Net assets (US$'000) 283,216 255,233
Net asset value per share (US cents) 188.03c 169.45c
Share price* (US cents) 196.73c 178.13c
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Sterling
Net assets (£'000)* 169,875 157,610
Net asset value per share (pence)* 112.78p 104.64p
Share price (pence) 118.00p 110.00p
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Premium 4.6% 5.1%
======= =======
Performance (with Six months ended Year ended
income reinvested) 31 March 30 September Since
2014 2013 inception
% % ***
US Dollar
Net asset value per
share +11.0 +31.6 +33.8
MSCI Frontiers Index
(net return**) +14.4 +21.8 +21.7
MSCI Emerging Markets
Index (net return**) +1.4 +1.0 -3.1
Ordinary share price +10.4 +43.6 +37.6
----- ----- -----
Sterling
Net asset value per +7.8 +31.2 +25.0
share
MSCI Frontiers Index +11.2 +21.4 +13.8
(net return**)
MSCI Emerging Markets -1.5 +0.7 -9.4
Index (net return**)
Ordinary share price +7.3 +43.2 +28.4
===== ===== =====
* Based on an exchange rate of 1.6672 at 31 March 2014 and 1.6194 at 30
September 2013.
** Net return indices calculate the reinvestment of dividends net of
withholding taxes using the tax rates applicable to non-resident institutional
investors.
*** The Company was incorporated on 15 October 2010 and its shares were
admitted to trading on the London Stock Exchange on 17 December 2010.
Sources: BlackRock and Datastream.
Chairman's statement
for the six months to 31 March 2014
Frontier Markets continued to perform strongly throughout the six months to 31
March 2014, with the MSCI Frontier Markets Index increasing by 14.4%, in
contrast to the MSCI Emerging Markets Index, which rose by 1.4%. Against this
backdrop your Company's NAV returned 11.0%, underperforming the MSCI Frontier
Markets Index by 3.4%. The share price increased by 10.4% (all calculations are
in US Dollar terms with income reinvested).
Overview
Since inception, Frontier Markets have performed well, returning 21.7%. This
represents a significant outperformance of mainstream Emerging Markets which
have endured a torrid time with negative returns of 3.1% over the same period.
We think that this is a salient reminder that Emerging and Frontier Markets
should be regarded as quite separate asset classes, both with their own
challenges and dynamics. We are pleased that the Company has outperformed the
Frontier Markets Index over that time, returning 33.8%, an outperformance of
12.1%.
For the period under review, the largest positive contribution to relative
performance came from Bangladesh, where the health care company Square
Pharmaceuticals saw a 33% increase in profits on the back of revenue growth and
higher operating efficiency. Argentina also performed well, with investors
optimistic about a new increasingly pragmatic approach to economics and
financial markets.
The Company's exposure to northern Iraq was the largest detractor from
performance, with the announcement of unexpectedly poor oil reserve figures
from Gulf Keystone negatively impacting performance. The portfolio's
underweight exposure relative to the benchmark in the United Arab Emirates
("UAE"), which performed strongly in this period also detracted from relative
performance. The underweight position reflects the Investment Manager's view
that the UAE market is overheated, in anticipation of the forthcoming migration
of UAE from the MSCI Frontier Markets Index to the MSCI Emerging Market Index
in May 2014, with valuations up by approximately 50% during the period under
review.
Since the period end, the Company's NAV per share has increased by
4.7% and the share price has risen by 2.4% (both on a US Dollar basis
with net income reinvested).
Revenue return and dividends
The Company's revenue return per share for the six months to 31 March 2014
amounted to 3.02 US cents (31 March 2013: 2.41 US cents). Dividend receipts
from portfolio investments have been strong in the period, up by approximately
23%, and in recognition of this the Directors are recommending an interim
dividend of 2.25 cents per share payable on 4 July 2014 to shareholders on the
Company's register on 6 June 2014. This represents an increase of 12.5% over the
ordinary interim dividend of 2.00 US cents per share paid in the previous year.
In addition, a special interim dividend of 3.40 US cents per share was paid in
July 2013 prior to the completion of the Company's 2013 C Share issue to ensure
that this transaction did not dilute the revenues attributable to existing
shareholders. This special dividend was in place of the Company's final
dividend, and represented the additional revenue generated between 1 April 2013
and the C Share conversion date (29 September 2013).
Share rating and share issues and buy backs
The Directors recognise the importance to investors that the Company's share
price should not trade at a significant discount or premium to NAV.
Accordingly, the Directors monitor the share rating closely and will consider
share repurchases or share issues in the market if the discount or premium
widens significantly. For the period under review, the Company's shares traded
at an average premium of 4.7%, and as at the date of this report stood at a
premium of 2.3%.
The Directors have the authority to buy back up to 14.99% of the Company's
issued share capital (excluding any shares held in treasury). This authority,
which has not so far been utilised, expires on the conclusion of the AGM in
2015, when a resolution will be put to shareholders to renew it. At 31 March
2014, the Company had 150,621,621 shares in issue. There were no share
allotments or share buybacks in the period.
Periodic opportunities for return of capital
At the Company's fifth AGM in 2016, the Board will provide shareholders with an
opportunity to elect to realise the value of their ordinary shares at the
applicable net asset value per ordinary share less applicable costs. The route
which will be used to provide shareholders with an exit will depend on the
level of uptake anticipated at the time and will be established following
shareholder consultation. This is likely to be achieved through a tender offer
or a reorganisation of the Company. In all circumstances, the Board will seek
to safeguard the interests of both continuing shareholders and those electing
to realise their investment. If this initial return of capital is not
undertaken in conjunction with a liquidation of the Company, the Directors
intend to offer shareholders further opportunities to realise the value of
their ordinary shares, at the applicable net asset value per ordinary share
less costs, at five yearly intervals.
Alternative Investment Fund Managers' Directive
The Alternative Investment Fund Managers' Directive ("the Directive") is a
European directive which seeks to reduce systemic risk by regulating
alternative investment fund managers ("AIFMs"). AIFMs are responsible for
managing investment products that fall within the category of Alternative
Investment Funds ("AIFs") and investment trusts are included in this. The
Directive was implemented on 22 July 2013 although the Financial Conduct
Authority ("FCA") permits a transitional period of one year after that, during
which UK AIFMs must seek authorisation. The Board has taken, and will continue
to take, independent advice on the consequences for the Company and has decided
in principle that BlackRock Fund Managers Limited will be appointed as its AIFM
before the end of the transitional period on 22 July 2014.
Facilitating Retail Investments
The Company currently conducts its affairs so that its securities can be
recommended by independent financial advisers to ordinary retail investors in
accordance with the FCA rules in relation to non-mainstream investment products
and intends to continue to do so for the foreseeable future. The securities are
excluded from the FCA's restrictions which apply to non-mainstream investment
products because they are shares in an investment trust.
Outlook
Frontier Markets have continued to significantly outperform Emerging Markets
into the first quarter of 2014 and we believe that many countries in the
Frontier universe offer significant growth, value and yield. However, much of
the significant demand for Frontier Markets over the last year, with a surge in
inflows from both Frontier funds and higher allocations from Emerging Market
funds, has been deployed in sub-Saharan Africa, where the budget and current
account deficits are a cause for concern. We anticipate that there will be
significant differentiation within the asset class in the future and are
confident that the Company is well positioned to benefit from selective
investment in those stocks and regions with good growth prospects and
attractive valuations.
Audley Twiston-Davies
Chairman
20 May 2014
Interim management report and responsibility statement
The Chairman's Statement and the Investment Manager's Report give details of
the important events which have occurred during the period and their impact on
the financial statements.
Principal risks and uncertainties
A detailed explanation of the risks relating to the Company can be divided into
various areas as follows:
- Performance;
- Income/Dividend;
- Regulatory;
- Operational;
- Market;
- Political; and
- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 30
September 2013. A detailed explanation can be found in the Strategic Report on
pages 16 and 17 and in note 16 on pages 50 to 59 of the Annual Report and
Financial Statements which are available on the website maintained by the
Investment Manager, BlackRock Investment Management (UK) Limited, at
www.blackrock.co.uk/brfi.
In the view of the Board, there have not been any changes to the fundamental
nature of these risks since the previous report and these principal risks and
uncertainties, as summarised, are equally applicable to the remaining six
months of the financial year as they were to the six months under review.
Going concern
The Directors are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future and is financially sound.
For this reason, they continue to adopt the going concern basis in preparing
the financial statements. The Company has a portfolio of investments which are
considered to be readily realisable and is able to meet all of its liabilities
from its assets and income generated from these assets.
Transactions with Investment Manager and related party disclosure
The Investment Manager is regarded as a related party under the Listing Rules
and details of the fees payable are set out in note 4 and note 10. The related
party transactions with the Directors are set out in note 9.
Directors' responsibility statement
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority
require the Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and Financial
Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with the International
Accounting Standard 34 "Interim Financial Reporting"; and
- the interim management report, together with the Chairman's Statement and
Investment Manager's Report, includes a fair review of the information required
by 4.2.7R and 4.2.8R of the Financial Conduct Authority ("FCA") Disclosure and
Transparency Rules.
The half yearly financial report has been reviewed by the Company's Auditor.
The half yearly financial report was approved by the Board on 20 May 2014 and
the above responsibility statement was signed on its behalf by the Chairman.
Audley Twiston-Davies
For and on behalf of the Board
20 May 2014
Investment manager's report
Market overview
Over the six months to 31 March 2014, the MSCI Frontier Market Index returned
14.4% (in US Dollar terms with income reinvested).
A year ago, we highlighted that the United Arab Emirates ("UAE") had rallied by
40% as the equity market finally caught up with the buoyant economy and
improving real estate market. In the subsequent 12 months, the market continued
that strong performance. The improved sentiment was in turn driven by strong
corporate earnings, high domestic liquidity, the lead up to the migration to
the Emerging Market Index and, finally, what we believe to be excessive
speculation. In the period under review, the market has risen by a further 50%.
Argentina performed well in the period. Investors are cautiously optimistic
about an increasingly pragmatic approach to economics and financial markets.
Argentina reached an agreement with Repsol, a Spanish oil group, over the
expropriation of assets in 2010. Repsol accepted a US$5 billion settlement in
relation to the loss of its subsidiary in Argentina, YPF. This was perceived as
a benign outcome by the market.
The Company's positions in Bangladesh were strong performers during the period,
including the holdings in the consumer sector which reported good results.
Nigeria was the weakest performer of the larger markets. Volatility in the
market was prompted by the removal of central bank governor Lamido Sanusi who
had been largely credited with restoring credibility to the Nigerian financial
system following the financial crisis. The change, which was undertaken for
political reasons, placed downward pressure on the Naira and the uncertainty
surrounding future monetary policy weighed on financial markets.
Kazakhstan also underperformed. Despite ample foreign reserves, the central
bank devalued the tenge by almost 20% for competitive reasons. The central bank
released a statement explaining the decision saying "The need to restore the
external competitiveness of the tenge exchange rate, the balance of trade of
the economy, and maintain the competitiveness of domestic producers has
necessitated changes to the national bank's monetary policy". We see limited
impact on Halyk Savings Bank's balance sheet from the devaluation, considering
the bank's high level of capitalisation and small long foreign exchange
position.
At the end of the period, events in Ukraine took centre stage as political
turmoil saw the removal of President Yanukovych and Russia mobilise troops to
defend strategic assets in Crimea. The military moves have so far had limited
direct impact on companies, but the market is clearly intensely worried about
the rising geopolitical tensions. Ukraine has received IMF support and may well
further devalue its currency as part of that process. Most Ukrainian corporates
are involved in agriculture and mining and hence would ultimately benefit from
a cheaper currency, but this is of secondary consideration to the impact of
risk on valuations.
Portfolio overview
During the period ended 31 March 2014 the Company's NAV returned 11.0% (in US
Dollar terms with income reinvested), underperforming the MSCI Frontier Markets
Index by 3.4%.
Bangladesh was the largest contributor to relative performance, with health
care company Square Pharmaceuticals a notable performer. Results have been
consistently strong; growth in revenues, lower costs and higher operating
efficiency contributed to a 33% increase in profit compared to the previous
year for the most recent quarter. This is particularly impressive given the
logistical challenges in a country where major cities have been impacted by
industrial disputes.
The Company's exposure to northern Iraq was the largest detractor from
performance during the period. Specifically, Gulf Keystone, which is one of the
portfolios long term exposures to Iraqi oil stocks, announced relatively bad
reserve figures during the period that sent the stock sharply lower. We believe
that the pessimism is overdone and note that the company's recent bond issue
secures financing for the next 18 months.
The underweight position in the UAE also detracted from relative performance.
As we have noted above, we believe that much of the recent activity is
reminiscent of the stock bubble which burst spectacularly in 2005.
Eighteen months ago, the stock markets in Abu Dhabi and Dubai were regularly
trading a combined US$30-US$40 million per day, and occasionally considerably
less. In recent weeks it has not been uncommon to see over US$1 billion traded
daily. This increase in volume has not principally been driven by institutional
investors, but rather by retail investors who had been highly active in 2004/5
and 2007/8, returning to the market. While history does not always repeat
itself, we cannot ignore the fact that a surge in daily volumes in 2005 and
2008, marked market peaks. We are not yet close to the volumes, or valuations
we saw in 2008 and we do not anticipate a sharp fall in UAE property values,
which triggered the 2008 sell-off, however we see it as appropriate to reduce
exposure.
Outlook
We continue to see significant upside in many Frontier markets. There is a wide
variety of stocks in countries as diverse as Bangladesh, Estonia, Iraq,
Romania, Pakistan, Saudi Arabia and Sri Lanka that offer significant growth,
value and yield. While the economic and indeed political situations in many of
these countries are not without risk, we believe that valuations in these
countries more than reflect the challenges of doing business.
We note that there has been a surge in inflows into Frontier markets from both
Frontier funds and higher allocations from Emerging Market funds. While
Frontier markets as a whole remain underinvested as an asset class, we are
concerned about the rate at which global portfolio money has been deployed in
selective markets, particularly in Sub-Saharan Africa. We have become
increasingly concerned about the budget and current account deficits of several
sub-Saharan economies such as Ghana, Kenya, Mauritius, Tanzania and Uganda. It
is therefore likely that there will be significant differentiation within the
asset class going forward. We are more positive on markets such as Saudi Arabia
and Bangladesh which offer considerably better growth and valuation prospects
amidst improving economic fundamentals and still low levels of foreign
ownership.
Sam Vecht and Emily Fletcher
BlackRock Investment Management (UK) Limited
20 May 2014
Ten largest investments(1)
31 March 2014
Qatar National Bank (Qatar, Financials, 4.2% (2013: 3.0%) www.qnb.com.qa) has
steadily grown to be among the largest banks in the Middle East and North
Africa Region with US$104.4 billion of assets. The bank is the leading
financial institution in Qatar with a market share approaching 45% of banking
sector assets.
Zenith Bank (2) (Nigeria, Financials, 4.1% (2013: 4.6%) www.zenithbank.com) is
Nigeria's second largest bank with 350 branches in Nigeria accounting for over
10% of the country's banking assets. Zenith offers a full range of retail and
corporate banking services and has subsidiaries in Ghana, The Gambia and Sierra
Leone.
Kuwaiti Foods (Americana) (Kuwait, Consumer Discretionary, 4.0% (2013: 2.2%)
www.americana-group.net) also known as 'Americana', operates fast food
franchises across North Africa, Central Asia and the Middle East.
Emaar Properties (United Arab Emirates, Financials, 3.4% (2013: 4.0%)
www.emaar.com) is currently the Persian Gulf region's largest land and real
estate developer. Emaar's activities include property investment and
development, property management services, education, health care, retail and
hospitality sectors, as well as investing in financial service providers.
Mobile Telecommunications (2) (Kuwait, Telecommunications, 3.4% (2013: 2.8%)
www.zain.com) also known as 'Zain', is a mobile telecom operating in Bahrain,
Jordan, Kuwait, Iraq, Saudi Arabia, Sudan and South Sudan.
Kazmunaigas Exploration Production (Kazakhstan, Energy, 3.1% (2013: 2.4%)
www.kmgep.kz) is the second largest Kazakh oil producing company with a proven
oil reserve of 1,707 million barrels which gives the company an estimated
reserve life of 26 years.
Qatar Gas Transportation (Qatar, Energy, 3.1% (2013: 3.0%) www.qatargas.com) is
a shipping company which owns, operates and manages LNG vessels and provides
shipping and marine-related services to a range of participants within the
Qatari hydrocarbon sector. The company is an integral component of the supply
chain of some of the largest, most advanced energy projects in the world.
Dragon Oil (Turkmenistan, Energy, 3.0% (2013: 3.0%) www.dragonoil.com) is a
leading independent international oil and gas exploration, development and
production company. Its principal asset is the Cheleken Contract Area, in the
eastern section of the Caspian Sea, offshore Turkmenistan. Dragon Oil had oil
and gas reserves and resources as at 31 December 2012 of 677 million barrels of
2P oil and condensate reserves, 1.5 trillion cubic feet of gas reserves, 59
million barrels of oil and condensate contingent resources and 1.4 trillion
cubic feet of gas resources.
Square Pharmaceuticals (3) (Bangladesh, Health Care, 2.8% (2013: 3.0%)
www.squarepharma.com.bd) is the largest pharmaceutical company in Bangladesh.
The company generates revenue of US$163 million with a market share of 16%.
Ooredoo (Qatar, Telecommunications, 2.8% (2013: 1.3%) www.ooredoo.qa) formerly
Qater Telecom, is a leading fixed line and mobile telecom operator. With 92
million customers, the company's footprint covers Qatar, Indonesia, Kuwait,
Iraq, Algeria, Tunisia and Oman.
1. Gross market exposure as a % of net assets. Percentages in brackets
represent the portfolio holding at 30 September 2013.
2. Includes exposure gained via both contracts for difference and equity
holdings.
3. Denotes exposure gained via a contract for difference.
Country and sector allocation
31 March 2014
COUNTRY ALLOCATION %
Relative to MSCI Frontier Markets Index
Saudi Arabia 10.1
Bangladesh 6.3
Sri Lanka 4.0
Iraq 3.6
Kazakhstan 3.5
Ukraine 3.3
Turkmenistan 3.0
Pakistan 1.8
Kygryzstan 1.6
Panama 1.4
Romania 1.2
Estonia 1.0
Oman 0.9
Slovenia 0.6
Other 0.1
Croatia -0.1
Lithuania -0.1
Bulgaria -0.1
Serbia -0.2
Vietnam -0.5
Tunisia -0.5
Jordan -0.6
Bahrain -0.6
Mauritius -1.0
Lebanon -1.7
Argentina -2.2
Nigeria -3.1
Kenya -3.1
Qatar -3.4
Morocco -4.6
United Arab
Emirates -9.4
Kuwait -11.3
Net liabilities -3.6
Cash 3.7
Absolute weights
Qatar 12.5
Saudi Arabia 10.1
United Arab
Emirates 8.5
Nigeria 8.1
Bangladesh 7.6
Kuwait 7.4
Kazakhstan 5.9
Pakistan 5.8
Sri Lanka 5.2
Oman 3.7
Iraq 3.6
Ukraine 3.4
Turkmenistan 3.0
Argentina 2.5
Romania 2.5
Slovenia 2.3
Vietnam 2.0
Kygryzstan 1.6
Panama 1.4
Estonia 1.3
Croatia 1.2
Kenya 0.2
Other 0.1
Lithuania 0.0
Bulgaria 0.0
Serbia 0.0
Tunisia 0.0
Jordan 0.0
Bahrain 0.0
Mauritius 0.0
Lebanon 0.0
Morocco 0.0
Net liabilities -3.6
Cash 3.7
Source: BlackRock.
* Based on portfolio gross market exposure as a % of net assets, compared to
the MSCI Frontier Market Index - net return. Net return indices calculate the
reinvestment of dividends net of withholding taxes using the the tax rates
applicable to non-resident institutional investors.
SECTOR ALLOCATION (%)*
Relative to MSCI Frontier Markets Index
Energy 10.6
Health Care 7.8
Consumer
Discretionary 6.2
Consumer Staples 4.4
Materials 3.7
Utilities 1.1
Telecommunications -0.1
Industrials -3.6
Financials -30.2
Net liabilities -3.6
Cash 3.7
Absolute weights
Financials 24.9
Energy 18.1
Telecommunications 13.4
Consumer Staples 11.6
Health Care 9.9
Materials 7.2
Consumer
Discretionary 6.3
Industrials 6.2
Utilities 2.3
Net liabilities -3.6
Cash 3.7
Source: BlackRock.
* Based on portfolio gross market exposure as a % of net assets, compared to
the MSCI Frontier Market Index - net return. Net return indices calculate the
reinvestment of dividends net of withholding taxes using the the tax rates
applicable to non-resident institutional investors.
Investments
31 March 2014
Gross
Fair market
value and exposure
Principal market as a %
country of exposure(1) of net
Company operation Sector US$'000 assets(3)
Equity portfolio
Afren Nigeria Energy 4,943 1.7
Air Arabia United Arab Industrials 2,960 1.0
Emirates
Aldar Properties United Arab Financials 4,575 1.6
Emirates
Avangardco Ukraine Consumer Staples 2,867 1.0
Banco Macro Argentina Financials 3,707 1.3
BankMuscat Oman Financials 4,162 1.5
Base Resources Kenya Materials 686 0.2
Cable & Wireless Panama Telecommunications 3,943 1.4
Centerra Gold Kyrgyzstan Materials 4,500 1.6
Chevron Lubricants Sri Lanka Energy 4,569 1.6
Dallah Health Saudi Arabia Health Care 6,533 2.3
Distilleries Co Sri Lanka Consumer Staples 2,170 0.8
of Sri Lanka
Doha Bank Qatar Financials 6,989 2.5
Dragon Oil Turkmenistan Energy 8,583 3.0
Emaar Properties United Arab Financials 9,711 3.4
Emirates
Engro Pakistan Materials 2,066 0.7
Genel Energy Iraq Energy 5,252 1.9
Grameenphone Bangladesh Telecommunications 3,338 1.2
Gulf Keystone Iraq Energy 865 0.3
Petroleum
Halyk Savings Bank Kazakhstan Financials 7,818 2.8
Hatton National Bank Sri Lanka Financials 2,378 0.8
Hrvatski Croatia Telecommunications 3,349 1.2
Telekomunikacije
Hub Power Pakistan Utilities 1,823 0.6
Kazmunaigas Kazakhstan Energy 8,695 3.1
Exploration Production
KRKA Slovenia Health Care 6,437 2.3
Kuwaiti Foods Kuwait Consumer 11,327 4.0
(Americana) Discretionary
MHP Ukraine Consumer Staples 6,696 2.4
Millat Tractors Pakistan Industrials 1,742 0.6
Mobile Kuwait Telecommunications 5,690 2.0
Telecommunications
NMC Health United Arab Health Care 6,977 2.5
Emirates
Omantel Oman Telecommunications 6,251 2.2
Ooredoo Qatar Telecommunications 7,901 2.8
Qatar Gas Qatar Energy 8,665 3.1
Transportation
Qatar National Bank Qatar Financials 11,848 4.2
Romgaz Romania Energy 5,624 2.0
Société Générale Romania Financials 1,455 0.5
Tallink Estonia Industrials 3,779 1.3
Telecom Argentina Argentina Telecommunications 3,493 1.2
Unilever Nigeria Nigeria Consumer Staples 1,169 0.4
Zenith Bank Nigeria Financials 4,208 1.5
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Equity Investments 199,744 70.5
------- --------
BlackRock
Institutional Cash
Fund 27,981 9.9
------- --------
Total Equity
Investments 227,725 80.4
======= ========
P-Notes
Herfy Food Services Saudi Arabia Consumer 6,619 2.4
P-Note 10/08/14 Discretionary
Saudi Arabian Amiantit Saudi Arabia Industrials 3,419 1.2
P-Note 11/05/15
Saudi Basic Industries Saudi Arabia Materials 6,042 2.1
P-Note 23/02/15
United International Saudi Arabia Industrials 5,747 2.0
Transportation P-Note
23/02/15
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Total P-Notes 21,827 7.7
------- --------
Options
Crude oil put option USA Energy 208 0.1
10/06/14
------- --------
Total options 208 0.1
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Total investments
excluding CFDs 249,760 88.2
======= ========
Gross
market
Gross exposure
Principal market as a %
country of Fair value(1) exposure(2) of net
Company operation Sector US$'000 US$'000 assets(3)
CFD portfolio
Long positions:
Access Bank Nigeria Financials 1,167 0.4
British American Bangladesh Consumer Staples 7,195 2.5
Tobacco
Distilleries Co of Sri Lanka Consumer Staples 1,910 0.7
Sri Lanka
Engro Pakistan Materials 3,856 1.4
FBN Holdings Nigeria Financials 648 0.2
Gulf Keystone Iraq Energy 3,979 1.4
Petroleum
Hatton National Bank Sri Lanka Financials 3,649 1.3
Hub Power Pakistan Utilities 4,650 1.6
Kinh Do Vietnam Consumer Staples 6,999 2.5
MCB Bank Pakistan Financials 2,584 0.9
Mobile Kuwait Telecommunications 3,929 1.4
Telecommunications
Petrovietnam Vietnam Materials 3,335 1.2
Fertilizer &
Chemicals
Square Bangladesh Health Care 7,968 2.8
Pharmaceuticals
Unilever Nigeria Nigeria Consumer Staples 3,798 1.3
United Commercial Bangladesh Financials 2,936 1.0
Bank
Zenith Bank Nigeria Financials 7,238 2.6
------- ------- -----
Total long CFD
positions 4,372 65,841 23.2
------- ------- -----
Total short CFD
positions (450) (4,697) (1.6)
------- ------- -----
Total CFD portfolio 3,922 61,144 21.6
------- ------- -----
Equity investments
(excluding
BlackRock's
Institutional Cash
Fund), P-Notes
and options 221,779 221,779 78.3
------- ------- -----
BlackRock's
Institutional Cash
Fund (4) 27,981 8,809 3.1
------- ------- -----
Total investments 253,682 291,732 103.0
------- ------- -----
Cash and cash
equivalents (4) 38,050 0.0
------- ------- -----
Net current
liabilities (8,516) (8,516) (3.0)
------- ------- -----
Net assets 283,216 283,216 100.0
======= ======= =====
1.Fair value is determined as follows:
- Listed and AIM quoted investments are valued at bid prices where available,
otherwise at published price quotations.
- The sum of the fair value column for the CFD contracts totalling US$3,922,000
represents the fair valuation of all the CFD contracts, which is determined
based on the difference between purchase price and value of the underlying
shares in the contract (in effect the unrealised gains/(losses) on the exposed
positions). The cost of purchasing the securities held through long CFD
positions directly in the market would have amounted to US$61,469,000 at the
time of purchase, and subsequent market rises in prices have resulted in
unrealised gains on the CFD contracts of US$4,372,000, resulting in the value
of the total market exposure to the underlying securities rising to
US$65,841,000 as at 31 March 2014. The cost of acquiring the securities to
which exposure was gained via the short CFD positions would have been
US$4,247,000 at the time of entering into the contract, and subsequent price
rises have resulted in unrealised losses on the short CFD positions of
US$450,000 and the value of the market exposure of these investments increasing
to US$4,697,000 at 31 March 2014. If the short position had been closed on
31 March 2014 this would have resulted in a loss of US$450,000 for the Company.
- P-Notes are valued based on the quoted bid price of the underlying security
to which they relate.
2.Market exposure in the case of equity and P-Note investments is the same as
fair value. In the case of CFDs it is the market value of the underlying shares
to which the portfolio is exposed via the contract.
3.% based on the total market exposure.
4.The gross market exposure column for Cash and Cash Fund investments has been
adjusted to assume the Company purchased direct holdings rather than exposure
being gained through CFDs.
Statement of comprehensive income
for the six months ended 31 March 2014
Revenue US$'000 Capital US$'000 Total US$'000
Six Six Six Six Six Six
months months Year months months Year months months Year
ended ended ended ended ended ended ended ended ended
Notes 31.03.14 31.03.13 30.09.13 31.03.14 31.03.13 30.09.13 31.03.14 31.03.13 30.09.13
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
Profits on
investments
held at
fair value
through
profit or
loss - - - 21,095 5,061 18,174 21,095 5,061 18,174
Losses on
foreign
exchange - - - (53) (25) (76) (53) (25) (76)
Net profits
from
contracts
for
difference 3 1,438 714 2,131 3,516 13,159 18,618 4,954 13,873 20,749
Income from
investments
held
at
fair
value
through
or
loss 3 4,176 2,115 5,564 - - - 4,176 2,115 5,564
Other
income 3 24 28 55 - - - 24 28 55
----- ----- ----- ------ ------ ------ ------ ------ ------
Total
revenue 5,638 2,857 7,750 24,558 18,195 36,716 30,196 21,052 44,466
----- ----- ----- ------ ------ ------ ------ ------ ------
Expenses
Investment
management
and
performance
fees 4 (300) (150) (355) (1,199) (1,224) (3,049) (1,499) (1,374) (3,404)
Other
expenses 5 (470) (220) (762) (81) (23) (57) (551) (243) (819)
----- ----- ----- ------ ------ ------ ------ ------ ------
Total
operating
expenses (770) (370) (1,117) (1,280) (1,247) (3,106) (2,050) (1,617) (4,223)
----- ----- ----- ------ ------ ------ ------ ------ ------
Profit on
ordinary
activities
before
finance
costs
and
taxation 4,868 2,487 6,633 23,278 16,948 33,610 28,146 19,435 40,243
Finance
costs - (1) (2) - (3) (8) - (4) (10)
----- ----- ----- ------ ------ ------ ------ ------ ------
Profit on
ordinary
activities
before
taxation 4,868 2,486 6,631 23,278 16,945 33,602 28,146 19,431 40,233
Taxation (317) (203) (763) 154 154 400 (163) (49) (363)
----- ----- ----- ------ ------ ------ ------ ------ ------
Profit for
the period 4,551 2,283 5,868 23,432 17,099 34,002 27,983 19,382 39,870
----- ----- ----- ------ ------ ------ ------ ------ ------
Earnings
per
ordinary
share
(US cents) 8 3.02 2.41 6.13 15.56 18.04 35.54 18.58 20.45 41.67
===== ===== ===== ===== ===== ===== ===== ===== =====
The total column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union. The
supplementary revenue and capital columns are both prepared under guidance
published by the Association of Investment Companies ("AIC"). All items in the
above statement derive from continuing operations. All income is attributable
to the equity holders of BlackRock Frontiers Investment Trust plc.
The Company does not have any other recognised gains or losses. The net profit
for the period disclosed above represents the Company's total comprehensive
income.
Statement of changes in equity
for the six months ended 31 March 2014
Called up Share Capital
share premium redemption Special Capital Revenue
capital account reserve reserve reserves reserve Total
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
For the six months
ended 31 March 2014
(unaudited)
At 30 September 2013 1,506 88,326 5,798 142,704 15,350 1,549 255,233
Total comprehensive
income:
Net profit for the
period - - - - 23,432 4,551 27,983
Transactions with
owners, recorded
directly to equity:
Cancellation of
share premium - (88,326) - 88,326 - - -
Dividend paid 6 - - - - - - -
----- ------ ----- ------- ------ ----- -------
At 31 March 2014 1,506 - 5,798 231,030 38,782 6,100 283,216
----- ------ ----- ------- ------ ----- -------
For the six months
ended 31 March 2013
(unaudited)
At 30 September 2012 948 - - 142,704 (18,652) 3,262 128,262
2012
Total comprehensive
income:
Net profit for the
period - - - - 17,099 2,283 19,382
Transactions with
owners, recorded
directly to equity:
Dividend paid(a) 6 - - - - - (2,464) (2,464)
----- ------ ----- ------- ------ ----- -------
At 31 March 2013 948 - - 142,704 (1,553) 3,081 145,180
----- ------ ----- ------- ------ ----- -------
For the year ended
30 September 2013
(audited)
At 30 September 2012 948 - - 142,704 (18,652) 3,262 128,262
Total comprehensive
income:
Net profit for the
year - - - - 34,002 5,868 39,870
Transactions with
owners, recorded
directly to equity:
Share issues - C
share 6,356 90,013 - - - - 96,369
Share issue costs - (1,687) - - - - (1,687)
Share conversion-C
share to ordinary
shares (5,798) - 5,798 - - - -
Dividend paid(b) 6 - - - - - (7,581) (7,581)
----- ------ ----- ------- ------ ----- -------
At 30 September 2013 1,506 88,326 5,798 142,704 15,350 1,549 255,233
===== ====== ===== ======= ====== ===== =======
(a) Final dividend of 2.60 US cents per share for the year ended 30 September
2012, declared on 30 November 2012 and paid on 8 March 2013.
(b) Final dividend of 2.60 US cents per share for the year ended 30 September
2012, declared on 30 November 2012 and paid on 8 March 2013 and the interim
dividend of 2.00 US cents per share for the six months ended 31 March 2013,
declared on 30 May 2013 and paid on 5 July 2013. A special dividend, in lieu of
the final dividend of 3.40 US cents per share was declared on 30 May 2013 and
paid on 5 July 2013.
During the period the Company incurred purchase transaction costs of US$383,000
(for the six months ended 31 March 2013: US$129,000; for the year ended
30 September 2013: US$384,000), and sales transaction costs of US$187,000 (for the
six months ended 31 March 2013: US$79,000; for the year ended 30 September
2013: US$238,000). All transaction costs have been included within the capital
reserves.
Statement of financial position
as at 31 March 2014
31 March 31 March 30 September
2014 2013 2013
US$'000 US$'000 US$'000
Notes (unaudited) (unaudited) (audited)
Non current assets
Investments designated as held at
fair value through profit or loss 249,760 108,135 179,094
------- ------- -------
Current assets
Other receivables 4,804 3,777 1,207
Derivative financial assets held
at fair value through profit or
loss 11,689 10,218 4,234
Cash held on margin deposit with
brokers 1,085 - 1,205
Cash and cash equivalents 42,644 39,046 89,920
------- ------- -------
60,222 53,041 96,566
Current liabilities
Other payables (13,301) (3,646) (15,054)
Net collateral held in respect of
contracts for difference (5,679) (11,419) (2,720)
Derivative financial liabilities
held at fair value through profit
or loss (7,767) (912) (2,634)
------- ------- -------
(26,747) (15,977) (20,408)
------- ------- -------
Net current assets 33,475 37,064 76,158
======= ======= =======
Total assets less current
liabilities 283,235 145,199 255,252
Creditors: amounts falling due
after more than one year
Management shares of £1.00 each
(one quarter paid) (19) (19) (19)
------- ------- -------
Net assets 283,216 145,180 255,233
======= ======= =======
Capital and reserves
Called up share capital 7 1,506 948 1,506
Share premium account - - 88,326
Capital redemption reserve 5,798 - 5,798
Special reserve 231,030 142,704 142,704
Capital reserves 38,782 (1,553) 15,350
Revenue reserve 6,100 3,081 1,549
------- ------- -------
Total equity 283,216 145,180 255,233
======= ======= =======
Net asset value per share
(US cents) 8 188.03 153.20 169.45
======= ======= =======
Cash flow statement
for the six months ended 31 March 2014
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2014 2013 2013
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Net cash (outflow)/inflow from operating
activities before financing activities (50,302) 126 (28,350)
------ ------ ------
Financing activities
Share issue costs paid - - (260)
Proceeds from issue of C shares - - 94,682
Equity dividend paid - (2,464) (7,581)
------ ------ ------
Net cash (outflow)/inflow from financing
activities - (2,464) 86,841
------ ------ ------
(Decrease)/increase in cash and cash
equivalents (50,302) (2,338) 58,491
Effect of foreign exchange rate changes (53) (25) (76)
------ ------ ------
Change in cash and cash equivalents (50,355) (2,363) 58,415
Cash and cash equivalents at start of
period 88,405 29,990 29,990
------ ------ ------
Cash and cash equivalents at end of
period 38,050 27,627 88,405
------ ------ ------
Comprised of:
Cash and cash equivalents 42,644 39,046 89,920
Add: Cash held on margin deposit with
brokers 1,085 - 1,205
Less: Collateral received in respect of
contracts for difference (5,679) (11,419) (2,720)
------ ------ ------
38,050 27,627 88,405
====== ====== ======
Reconciliation of net income before taxation to net cash flow from operating
activities
Six months Six months
ended ended Year ended
31 March 31 March 30 September
2014 2013 2013
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Profit before taxation 28,146 19,431 40,233
Profits on investments and CFDs held at
fair value through profit or loss
(including transaction costs) (23,416) (18,476) (37,319)
Net movement on foreign exchange 53 25 76
Realised losses on closure of CFD
contracts (2,532) (635) (1,478)
Gains on realisation of CFDs 2,106 7,563 21,842
Increase in other receivables (3,761) (2,538) (686)
Increase in other payables 3,118 757 1,797
Increase/(decrease) in amounts due from
brokers 137 (698) 6
(Decrease)/increase in amounts due to
brokers (4,843) 53 10,757
Sales of investments held at fair value
through profit or loss 100,583 69,733 170,194
Purchases of investments held at fair
value through profit or loss (149,730) (75,040) (233,347)
Taxation on investment income included
within gross income (163) (49) (425)
------- ------- -------
Net cash (outflow)/inflow from operating
activities (50,302) 126 (28,350)
======= ======= =======
Notes to the financial statements
for the six months ended 31 March 2014
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of section 1158 of the Corporation Tax Act 2010.
2. Basis of preparation
The half yearly financial statements have been prepared using the same
accounting policies as set out in the Company's annual report and financial
statements for the year ended 30 September 2013 (which were prepared in
accordance with IFRS as adopted by the EU and as applied in accordance with the
provisions of the Companies Act 2006) and in accordance with International
Accounting Standard 34. Insofar as the Statement of Recommended Practice
("SORP") for the investment trust companies and venture capital trusts issued
by the Association of Investment Companies ("AIC"), revised in January 2009 is
compatible with IFRS, the Financial Statements have been prepared in accordance
with guidance set out in the SORP.
3. Income
Six months Six months
ended ended Year ended
31 March 31 March 30 September
2014 2013 2013
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Investment income:
UK listed dividends 117 - 195
Overseas listed dividends 4,059 2,115 5,369
Income from contracts for difference 1,438 714 2,131
----- ----- -----
5,614 2,829 7,695
Other income:
Deposit interest 24 28 55
----- ----- -----
Total income 5,638 2,857 7,750
===== ===== =====
4. Investment management and performance fees
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Investment management
fee 300 1,199 1,499 150 601 751 355 1,425 1,780
Performance fee - - - - 623 623 - 1,624 1,624
--- ----- ----- --- ----- ----- --- ----- -----
Total 300 1,199 1,499 150 1,224 1,374 355 3,049 3,404
=== ===== ===== === ===== ===== === ===== =====
An investment management fee equivalent to 1.10% per annum of the Company's
gross assets is payable to the Investment Manager. In addition, the Investment
Manager is also entitled to receive a performance fee at a rate of 10% of any
increase in the NAV at the end of a performance period over and above what
would have been achieved had the cumulative NAV since launch increased in line
with the MSCI Frontiers Markets Index ("the Reference Index"). The performance
fee payable in any year is capped at an amount equal to 2.5% or 1% of the gross
assets if there is any increase or decrease in the NAV per share at the end of
the relevant performance period respectively. Any capped excess outperformance
for a period may be carried forward to the next two performance periods,
subject to the then applicable annual cap. The performance fee is also subject
to a high watermark such that any performance fee is only payable to the extent
that the cumulative relative outperformance of the NAV is greater than what
would have been achieved had the NAV increased in line with the Reference Index
since the last date in relation to which a performance fee had been paid.
For the six months ended 31 March 2014, the Company's NAV had not outperformed
the Reference Index and therefore no performance fee had been
accrued.
5. Operating expenses
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2014 2013 2013
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Custody fee 112 45 176
Directors' fees 105 78 174
Other administration costs 253 97 412
--- --- ---
470 220 762
=== === ===
For the six months ended 31 March 2014, expenses of US$81,000 charged to the
capital column of the Statement of Comprehensive Income related to transaction
costs. For the six months ended 31 March 2013, expenses of US$23,000 charged to
the capital column of the Statement of Comprehensive Income related to
transaction costs. For the year ended 30 September 2013, expenses of US$57,000
were charged to the capital column of the Statement of Comprehensive Income, of
which US$33,000 related to transaction costs and US$24,000 related to fees in
relation to investing in new markets.
6. Dividend
The Board has declared an interim dividend of 2.25 US cents per share payable on
4 July 2014 to shareholders on the register at 6 June 2014 (six months ended
31 March 2013, interim dividend of 2.00 US cents per share and a special dividend
of 3.40 US cents per share were paid on 5 July 2013 to shareholders on the
register at 7 June 2013). This dividend has not been accrued in the financial
statements for the six months ended 31 March 2014, as under IFRS, interim
dividends are not recognised until paid. Dividends are debited directly
to reserves.
7. Called up share capital
Number of Total Nominal
shares in shares value
issue in issue US$'000
Allotted, called up and fully paid
share capital comprised:
Ordinary shares of 1 cent each:
At 30 September 2013 150,621,621 150,621,621 1,506
----------- ----------- -----
At 31 March 2014 150,621,621 150,621,621 1,506
=========== =========== =====
8. Earnings and net asset value per ordinary share
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2014 2013 2013
(unaudited) (unaudited) (audited)
Net revenue profit attributable to
ordinary shareholders (US$'000) 4,551 2,283 5,868
Net capital profit attributable to
ordinary shareholders (US$'000) 23,432 17,099 34,002
------ ------ ------
Total profit attributable to ordinary
shareholders (US$'000) 27,983 19,382 39,870
------ ------ ------
Revenue earnings per share - (US cents) 3.02 2.41 6.13
Capital earnings per share - (US cents) 15.56 18.04 35.54
------ ------ ------
Total earnings per share - (US cents) 18.58 20.45 41.67
====== ====== ======
Six months Six months Year
ended ended ended
31 March 31 March 30 September 2014 2013 2013
(unaudited) (unaudited) (audited)
Total equity attributable to ordinary
shareholders (US$'000) 283,216 145,180 255,233
------- ------- -------
Net asset value per share basic and
diluted - (US cents) 188.03 153.20 169.45
------- ------- -------
Share price* (US cents) 196.72 158.68 178.13
------- ------- -------
The weighted average number of ordinary
shares in issue during the period on
which the return per ordinary share was
calculated was: 150,621,621 94,766,267 95,684,437
----------- ---------- -----------
The actual number of ordinary shares in
issue at the end of each period on which
the net asset value was calculated was: 150,621,621 94,766,267 150,621,621
----------- ---------- -----------
* The Company's share price is quoted in sterling and the above represents the US
dollar equivalent.
Basic and diluted earnings per share and net asset value per share are the same
as the Company did not have any dilutive securities at the period end.
9. Related party disclosure
The Board consists of five non-executive Directors, all of whom are considered
to be independent by the Board. None of the Directors has a service contract
with the Company. The Chairman receives an annual fee of £33,000, the Chairman
of the Audit and Management Engagement Committee receives an annual fee of £
27,000 and each other Director receives an annual fee of £23,000.
All five members of the Board hold ordinary shares in the Company. Audley
Twiston-Davies holds 128,935 ordinary shares, Lynn Ruddick holds 47,967
ordinary shares, John Murray holds 121,967 ordinary shares, Nick Pitts-Tucker
holds 110,148 ordinary shares and Sarmad Zok holds 38,787 ordinary shares.
10. Transactions with the Investment Manager
The Investment Manager, BlackRock Investment Management (UK) Limited, is also
considered to be a related party under the Listing Rules. The investment
management and performance fees expensed during the period ended 31 March 2014
are set out in note 4. As at 31 March 2014 an amount of US$1,377,000 (31 March
2013: US$1,423,000; 30 September 2013: US$2,240,000) was outstanding in respect
of management fees. There was no performance fee outstanding for the six months
ended 31 March 2014. Any performance fee earned for the full year to 30 September
2014 will not crystallise and fall due until the calculation date of 30 September
2014.
In addition to the above services, with effect from 1 November 2013, BlackRock
has provided the Company with marketing services. The total fees paid or
payable for these services for the period ended 31 March 2014 amounted to
US$33,000 including VAT (six months ended 31 March 2013: Nil; year ended 30
September 2013: Nil), of which US$33,000 (31 March 2013: Nil; 30 September
2013: Nil) was outstanding at 31 March 2014.
The Company has an investment in BlackRock's Institutional Cash Fund of
US$27,981,000 at the period end (31 March 2013: US$12,913,000; 30 September
2013: US$2,642,000).
11. Publication of non statutory accounts
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the six months ended 31 March 2014 and
31 March 2013 has not been audited.
The information for the year ended 30 September 2013 has been extracted from
the latest published audited financial statements, which has been filed with
the Registrar of Companies. The report of the auditor on those accounts
contained no qualifications or statement under sections 498(2) or 498(3) of the
Companies Act 2006.
12. Contingent liabilities
There were no contingent liabilities at 31 March 2014 (31 March 2013 and
30 September 2013: Nil).
13. Annual results
The Board expects to announce the annual results for the year ended
30 September 2014 in early December 2014.
Copies of the annual results announcement can be obtained from the Secretary on
020 7743 3000. The annual report should be available by late December with the
Annual General Meeting being held in February 2015.
20 May 2014
12 Throgmorton Avenue
London EC2N 2DL
Independent review report
BlackRock Frontiers Investment Trust plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half yearly financial report for the six months ended 31
March 2014 which comprises the Statement of Comprehensive Income, Statement of
Changes in Equity, Statement of Financial Position, Cash Flow Statement,
Reconciliation of Net Income before Taxation to Net Cash Flow from Operating
Activities and the related notes. We have read the other information contained
in the half yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained
in International Standard on Review Engagements 2410 (UK and Ireland) "Review
of Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with IFRS's as adopted by the European Union. The
condensed set of financial statements included in this half yearly financial
report has 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 condensed
set of financial statements in the half yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making 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 condensed set of financial statements in the half yearly
financial report for the six months ended 31 March 2014 is not prepared, in all
material respects, 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 Conduct Authority.
Ernst & Young LLP
London
20 May 2014
For further information, please contact:
Simon White, Managing Director, Investment Companies, BlackRock Investment
Management (UK) Limited
Tel: 020 7743 5284
Emma Phillips, Media & Communication, BlackRock Investment Management (UK)
Limited
Tel: 020 7743 2922
20 May 2014
12 Throgmorton Avenue,
London EC2N 2DL
END
The Half Yearly Financial Report will also be available on the BlackRock
Investment Management website at
http://www.blackrock.co.uk/literature/interim-report/blackrock-frontiers-investment-trust-plc-interim-report-2014.pdf.
Neither the contents of the Manager's website nor the contents of any website
accessible from hyperlinks on the Manager's website (or any other website) is
incorporated into, or forms part of, this announcement.
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