Half-year Report

PREMIER ENERGY AND WATER TRUST PLC
2016
Half Year Report
for the six months
to 30 June 2016

Shareholder Information

SHARE PRICE AND PERFORMANCE INFORMATION

The Ordinary shares and Zero Dividend Preference shares are listed on the London Stock Exchange. Information about the Company and that of the other investment company managed by Premier, the Acorn Income Fund Limited, including current share prices can be obtained directly from:

www.premierfunds.co.uk

Contact Premier on 01483 400 400, or by e-mail to [e-mail].

SHARE DEALING

Shares can be purchased through a stockbroker.

Information on the Premier ISA can be obtained by contacting Premier on 01483 400 400.

SHARE REGISTER ENQUIRIES

The register for the Ordinary shares and Zero Dividend Preference shares is maintained by Capita Registrars. In the event of queries regarding your holding, please contact the Registrar on 0871 664 0300 (calls cost 10p per minute plus network extras, lines are open Monday to Friday 9.00 a.m. to 5.30 p.m.); overseas [phone]; or e-mail [e-mail]. Changes of name and/or address must be notified in writing to the Registrar.

STATEMENT REGARDING NON-MAINSTREAM INVESTMENT PRODUCTS

The Company currently conducts its affairs so that both the Ordinary shares issued by the Company and the Zero Dividend Preference shares issued by the Company’s wholly-owned subsidiary PEWT Securities 2020 PLC can be recommended by IFAs to retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future.

The Ordinary shares and the Zero Dividend Preference shares fall outside the restrictions which apply to non-mainstream investment products because they are excluded securities.

A member of the Association of Investment Companies.

Investment Objectives

The Company’s investment objectives are to achieve a high income and to realise long term growth in the capital value of its portfolio. The Company will seek to achieve these objectives by investing principally in the equity and equity-related securities of companies operating primarily in the energy and water sectors, as well as other infrastructure investments.

Contents

Shareholder Information	ifc
Investment Objectives	1
Company Highlights	2-3
Chairmans Statement	4-5
Investment Managers Report	6-8
Investment Portfolio	9
Group Income Statement	10-11
Consolidated and Company Balance Sheets	12
Consolidated Statement of Changes in Equity	13
Consolidated and Company Cashflow Statements	14
Notes to the Half Year Report	15-17
Interim Management Report	18-19
Directors and Advisers	20

Company Highlights

for the six months to 30 June 2016

	Six months to	Year ended
	30 June	31 December
	2016	2015
Total Return Performance
Total Assets Total Return 1	10.1%	(4.3)%
FTSE All-World Utilities Index Total Return (GBP) 2	27.1%	(2.7)%
FTSE All-World Index Total Return (GBP) 2	12.8%	4.0%
FTSE All-Share Index Total Return (GBP) 2	4.3%	0.9%
Ongoing charges 3	1.9%	1.6%

	Six months to	Year ended
	30 June	31 December
	2016	2015	% change
Ordinary Share Returns
Net Asset Value per Ordinary share (cum income) 4	162.39p	145.83p	11.4%
Mid-market price per Ordinary share	138.50p	130.50p	6.1%
Discount	(14.7)%	(10.5)%
Net Asset Value Total Return 5	16.3%	(19.6)%
Share Price Total Return 2	11.8%	(26.5)%

	Six months to	Six months to
	30 June	30 June
	2016	2015	% change
Returns and Dividends
Revenue Return per Ordinary share	7.35p	6.15p	26.0%
Net Dividends declared per Ordinary share	3.80p	3.80p	-%
Additional Dividends declared per Ordinary share	-	1.50p	n/a

	Period from
	1 January
	to 30 June
	2016	% change
Zero Dividend Preference Share Returns
Net Asset Value per Zero Dividend Preference share 4	102.34p	2.3%
Mid-market price per Zero Dividend Preference share	105.38p	5.4%
Premium	3.0%

	As at
	30 June
	2016
Hurdle Rates
Ordinary shares
Hurdle rate to return the share price of 138.50p at 30 June 2016 6	2.0%
Zero Dividend Preference shares
Hurdle rate to return the redemption share price
for the 2020 ZDP’s of 125.6519p at 30 November 2020 7	(12.1)%

	Six months to	Year ended
	30 June	31 December
	2016	2015
Balance Sheet
Gross Assets less Current Liabilities
(excluding Zero Dividend Preference shares)	£54.0m	£76.2m
Zero Dividend Preference shares	(£24.6m)	(£49.8m)
Equity shareholders’ funds	£29.4m	£26.4m
Gearing on Ordinary shares 8	1.84 x	2.89 x
Zero Dividend Preference share cover (non-cumulative) 9	1.64 x	1.45 x

1) Based on opening and closing total assets plus dividends marked “ex-dividend” within the period. Source: Premier Fund Managers Limited (“PFM Ltd”).

2) Source: Bloomberg.

3) Ongoing charges have been based on the Company’s management fees and other operating expenses as a percentage of average gross assets less current liabilities over the period.

4) Articles of Association basis.

5) Based on opening and closing NAVs with dividends marked “ex-dividend” within the period reinvested. Source: PFM Ltd.

6) The Hurdle Rate is the compound rate of growth of the total assets required each year to meet the Ordinary share price at 30 June 2016. Source: JP Morgan Cazenove.

7) The Hurdle Rate is the compound rate that the total assets could decline each year until the predetermined redemption date, for shareholders still to receive the predetermined redemption price. Source: JP Morgan Cazenove.

8) Based on Gross Assets less Current Liabilities divided by Equity Shareholders’ Funds at the end of each year.

9) Non-cumulative cover = Gross assets at period end less estimated wind up costs less management charges to capital divided by final repayment value of the ZDP shares. Source: JP Morgan Cazenove.

Chairman’s Statement
for the six months to 30 June 2016

Performance

The first half of 2016 was very eventful, particularly in the United Kingdom. Given a backdrop of increasingly accommodative monetary policy and political turbulence, coupled with under-performance in 2016, it was no surprise to see the utility sector out-perform wider equity markets.

The Premier Energy & Water Trust PLC (“PEWT” / the “Company”) had an improved six months, however the portfolio under-performed the utilities sector. PEWT’s portfolio recorded a total return including income received of 10.1%. This was below the FTSE All-World Utilities Index which delivered a total return in sterling of 27.1%. The global utilities sector has a high weighting (54% at June 2016) to US utilities, which performed spectacularly in the half, delivering a total return in sterling of 37.1%, benefiting from the “lower for longer” expectation of the future path for US interest rates.

PEWT’s Net Asset Value per ordinary share (“NAV”) gained 11.4%. Including dividends the net asset value total return to an ordinary shareholder including dividends paid and movement in the NAV was 16.3%.

Discount

PEWT’s Ordinary shares were priced at a 10.5% discount to NAV at the start of the year and traded on a narrower discount for most of the period. With the ZDPs trading at a premium to their NAV, taking the two classes of share together the “package” traded close to asset value. However, on 24 June, the day following the EU referendum, PEWT’s Ordinary share NAV rose by 6.5% but the share price fell by 2.6%. PEWT’s NAV continued to rise throughout the week and although the shares began to recover they continued to lag the strong NAV performance ending the period on a 14.7% discount. The widening of discounts following the Brexit vote was a common theme across the investment company sector and exacerbated in PEWT’s case by its exceptionally strong NAV performance and the lag in share price movement that is often displayed following a sharp movement in NAV. PEWT’s Ordinary shares were trading on a discount of 5.0% on 2 August 2016*.

Overview of the period

There have been a great many issues to concern investors over the first half of 2016. From a UK perspective the most significant has been the “Brexit” vote, which caused a sharp slide in sterling, a Prime Ministerial resignation, and a modest correction in the UK stock market (or at least that part of it relating to companies doing business primarily in the UK).

Utilities have been seen as something of a safe haven, and within the sector those companies operating natural monopoly transmission and distribution businesses have performed particularly well.

Expectations of further increases in US interest rates have been continually pushed back, and the ECB has also been pursuing unconventional monetary policy, extending its remit from purchasing government debt to corporate bonds

Politics has been ever-present, particularly in the US, which holds a presidential election in November. The markets do not seem to be overly concerned about the outcome at this stage, although a Trump presidency could generate considerable uncertainty over policy direction.

As I write this, the UK political situation has become rather fluid. We have a new Prime Minister and we may possibly have a new leader of the opposition. The formal negotiations between the UK and the EU will soon begin in earnest, and have the potential to generate significant market volatility.

Brexit has displaced the EU’s internal problems from the front page, but they remain pressing. Southern Europe in particular is showing little sign of progress, and populist fringe parties are gaining ground in Spain and Italy.

China’s stock exchange remains stuck in the doldrums, down 15.1% in local currency in the first half of 2016. However it has shown signs of life more recently and the investments held in the portfolio are performing well in business terms, if not always in share price.

Dividends

On 28 April 2016 the Company announced the first quarterly dividend of 1.90p per ordinary share in respect of 2016, unchanged on the base dividend paid on the equivalent period in 2015, which was paid on 30 June 2016.

On 28 July 2016 the Company declared a second interim dividend for the 2016 financial year of 1.90p again unchanged on the base dividend paid for equivalent period of 2015.

The policy of paying additional dividends of 0.75p per quarter, in order to run down the Company’s historic revenue reserves, ended on 31 December 2015 with a final additional dividend of 0.75p declared on 2 February 2016 and paid at the end of March 2016 alongside the 4.00p 4th interim dividend paid in respect of 2015. In total, additional dividends of 8.25p per Ordinary share have been paid to shareholders since the policy was implemented in the second half of 2013.

In February, in light of the refinancing of the Company’s ZDP shares at the end of 2015, and consequent reduction in gearing, the Board took the opportunity to update the market on its expectation for dividends in 2016. Following a review of both PEWT’s portfolio and also capital structure, it was announced that a dividend of at least 8.00p per Ordinary share was expected to be paid in respect of the 2016 financial year. At the interim stage earnings per share were running ahead of our projections made at the start of the year so we believe that the Company is well placed to meet or exceed the 8.00p per Ordinary share dividend target.

In recent years, PEWT’s revenue earnings have been weighted approximately 65% to 70% to the first half of the year. The post Brexit fall in sterling will have a beneficial effect on the sterling value of foreign currency income received in the second half, but, assuming exchange rates remain at current levels, will have a more significant impact in 2017.

Outlook

Although gains have been made, it is disappointing that share prices of some of the portfolio’s larger holdings have not kept pace with earnings. However over the long term, returns should be driven by underlying business performance and this bodes well for your Company’s future prospects.

Events during the first half of 2016 have demonstrated two things at least; firstly it pays to be globally diversified, and secondly, utilities can be one of the more reliable sectors during times of upheaval.

Geoffrey Burns
Chairman

3 August 2016

* The latest  practicable date prior to the publication of this document.

Investment Manager’s Report

for the six months to 30 June 2016

Market review

Utilities performed well in the first half of 2016, recording gains well ahead of the market. The year started badly though, markets being unsettled by a relatively modest devaluation of the Renminbi. The FTSE All-World Index (GBP adjusted) fell 9.8% by mid-February, before rallying to close the six months with a gain of 11.5%. The FTSE All-World Utilities Index (GBP adjusted) recorded a gain (capital only excluding dividends) of 24.3%, benefitting from a high weighting to US utilities, which gained a staggering 34.7% (again in GBP) in the first half of  2016.

PEWT’s performance in the period can be summarised as follows: US utilities, Latin American utilities, and fixed income holdings all performed very well. Chinese and Indian positions were disappointing, with strong results not translating into increased share prices. European and UK utilities were somewhat mixed.

We have commented before on the link between interest rates and utilities. In most places interest rates are passed through into regulated utility tariffs over time, offsetting the valuation impact on share prices that movements in interest rates would otherwise have. However, US utilities would appear to be more sensitive than most to changes in interest rates, with the relationship between interest rates and allowed returns being somewhat opaque. As such they do tend to exhibit more “bond like” investment returns than utilities in other geographies. Yields on 10 year US treasuries fell from 2.2% to below 1.5% over the first half of 2016, providing a significant tailwind to US utilities.

We are aiming to generate long term returns, and as such, invest where we see the best value. This may not always yield short term strength, but we believe will produce stronger results over the long term. We continue to see US utilities as being, in the main, fully priced. We expect therefore to remain underweight US utilities.

UK utilities performed relatively well in the half. Regulated utilities have benefited from being seen as safe haven assets, while those with supply businesses will be relieved to have the Competition and Markets Authority’s (“CMA”) review of the sector out of the way. The CMA has proposed some changes to the way the retail supply market works, but major structural change will not be forced onto the industry.

Portfolio highlights

Starting with the positive aspects to performance, PEWT’s investment in closed end US pipeline infrastructure fund, First Trust MLP and Energy Income Fund performed well, its shares increasing in value by 18.3% in the half, as the oil price recovered to approaching $50. In reality the profitability of the pipeline companies is not materially correlated to oil prices, but the market sees things differently. We managed to increase this position during the market lows in January, making gains of up to 80% on those purchases by the end of June.

PEWT’s bond holdings performed well and accounted for 9.0% of the portfolio at the end of the half. The largest position, in emerging market renewable energy investor Terraform Global, gained 17.4% in USD, this not including the 9.75% annual coupon. The second largest bond position, in US wind farm company Pattern Energy, was a new investment made in February, on which PEWT was recording a gain on book cost of 29.4% by the end of June.

Latin America was a strong performer in the half, notably in Brazil where President Dilma Rouseff has been removed from office pending an impeachment trial. The Brazilian stock market, which had become perhaps overly pessimistic, rallied strongly. A return to normal levels of rainfall after a severe drought also helped the sector. PEWT’s three largest holdings, Cia Paranaense de Energia (“Copel”), Energias do Brasil, and Cia de Saneamento do Parana (“Sanepar”) gained 20.2%, 14.7%, and 58.2% respectively.

PEWT’s US utilities performed well, mainly for macro rather than stock specific reasons, although companies have maintained reasonable earnings growth typically in the mid to high single digits. The largest position, NextEra Energy gained 25.5%. Other notable performances included Sempra Energy which gained 21.3% and Edison International whose share price rose 31.2%.

OPG Power has now completed its thermal capacity expansion programme, and all assets will be operational for the March 2017 financial year. We anticipate that this will demonstrate underlying profitability, and in a trading update issued in May, OPG confirmed that they would pay a maiden dividend in the March 2017 financial year. They also disclosed that in the year to March 2016, electricity generation had increased by 70% year on year. Despite the positive news flow, OPG’s share price fell by 26.5% in the half.

As we note above, China was a disappointment. The market has become increasingly concerned about how the country manages its transition from low end to higher quality manufacturing and services. Debt levels are also a concern (although look healthy compared to many western economies). We increased the investment in gas distribution company Beijing Enterprises Holdings, whose shares fell by 6.7% in the half despite reporting a 17.3% increase in 2015 net profit. Gas usage continues to increase in China, supplanting more polluting fuels such as coal and oil, and we expect this trend has many years to run.

On a similar note, waste and water treatment company China Everbright International is also benefitting from China’s environmental focus, growing its net profit by 22.4% in 2016. This didn’t stop its shares from falling by 13.7% in the half however.

Although we have substantially reduced exposure to Chinese coal fired power generation, we retained China Power International, which is also a significant hydro power generator. Lower coal prices allowed the company to increase its 2016 net profit by 50.0%, although its share price fell by 57.2%.

European utilities were a mixed bag. Regulated utilities operating natural monopoly businesses continued their winning streak. National Grid, up 16.9%, and Italian gas transmission operator, Snam, whose shares gained 11.0%, are good examples of this.

GEOGRAPHIC ALLOCATION 2016

30 June 2016

	June 2016	December 2015
North America	20.15%	17.01%
China	19.03%	19.16%
Global	11.40%	12.13%
United Kingdom	10.88%	13.26%
Latin America	10.42%	6.47%
India	8.25%	12.69%
Europe (excluding UK)	6.26%	5.91%
Eastern Europe	5.83%	6.26%
Asia (excluding China)	4.88%	4.17%
Middle East	2.90%	2.94%

SECTOR ALLOCATION 2016

30 June 2016

	June 2016	December 2015
Electricity	43.82%	54.90%
Multi Utilities	22.52%	23.06%
Renewable Energy	14.00%	6.76%
Gas	9.99%	7.14%
Water & Waste	9.67%	8.14%

Currency & Brexit

The post Brexit collapse in sterling has had a beneficial effect on PEWT as foreign currency denominated investments are worth more in sterling. We had considered hedging currency over the vote period, but considered that an “out” vote was equally as likely as “in”, while the downside to sterling (upside for PEWT) in the event of an out vote was far greater than the upside to sterling (downside to PEWT) should the UK vote to remain in the EU.

While trying to avoid complacency, we do not at this stage believe that the Brexit vote will have material operational significance for the portfolio.

Outlook

Most investments appear to have performed either very well, or rather poorly, with seemingly few occupying the middle ground. However, many of the companies seeing their share price fall in value are performing well operationally, they just happen to be located in out of favour regions. We believe that the medium to long term future therefore looks encouraging.

James Smith
Claire Long
Premier Fund Managers Limited

3 August 2016

Investment Portfolio
at 30 June 2016

			Value	% total	June	December
Company	Activity	Country	£000	investments	2016	2015
OPG Power Ventures	Electricity	India	4,337	8.2	1	(1)
SSE	Electricity	United Kingdom	3,269	6.2	2	(3)
Beijing Enterprises Holdings	Gas	China	3,252	6.2	3	(7)
TerraForm Global*	Renewable Energy	Global	3,097	5.9	4	(5)
First Trust MLP and Energy Income Fund	Multi Utilities	North America	2,989	5.7	5	(4)
China Power Intl. Develop	Electricity	China	2,721	5.2	6	(2)
Engie	Multi Utilities	Global	2,181	4.1	7	(6)
Cia Paranaense Energia ADR	Electricity	Latin America	2,015	3.8	8	(23)
Pennon Group	Water & Waste	United Kingdom	1,890	3.6	9	(9)
China Everbright Intl.	Water & Waste	China	1,822	3.5	10	(15)
Pattern Energy Group Convertible 4% 07/15/20	Renewable Energy	North America	1,661	3.2	11	-
Qatar Electricity & Water Co.	Multi Utilities	Middle East	1,524	2.9	12	(12)
Transelectrica	Electricity	Eastern Europe	1,496	2.8	13	(13)
Huaneng Renewables	Renewable Energy	China	1,453	2.8	14	(42)
Cia de Saneamento do Parana	Water & Waste	Latin America	1,087	2.1	15	(39)
EDP-Energias do Brasil	Electricity	Latin America	1,082	2.1	16	(11)
Keppel Infrastructure Trust	Multi Utilities	Asia (excluding China)	1,018	1.9	17	(18)
Nextera Energy	Electricity	North America	975	1.9	18	(8)
Sempra Energy	Electricity	North America	895	1.7	19	(38)
Edison International	Electricity	North America	871	1.7	20	(25)
Transgaz	Gas	Eastern Europe	827	1.6	21	(20)
Hafslund	Electricity	Europe (excluding UK)	826	1.6	22	(31)
NRG Yield**	Renewable Energy	North America	805	1.5	23	-
Metro Pacific Investments	Multi Utilities	Asia (excluding China)	774	1.5	24	(35)
CMS Energy	Multi Utilities	North America	754	1.4	25	(29)
Enagas	Gas	Europe (excluding UK)	726	1.4	26	(41)
Sembcorp Industries	Multi Utilities	Asia (excluding China)	683	1.3	27	(22)
Alliant Energy	Electricity	North America	596	1.1	28	(32)
Enersis	Electricity	Latin America	578	1.1	29	(21)
National Grid	Electricity	United Kingdom	559	1.0	30	(19)
Consolidated Edison	Electricity	North America	542	1.0	31	(34)
ACEA	Multi Utilities	Europe (excluding UK)	508	1.0	32	(16)
Kinder Morgan Energy Partners 7½% 11/15/40	Multi Utilities	North America	502	0.9	33	-
Macquarie 1st Trust Glb. Infra. Utility Div & Inc	Multi Utilities	Global	493	0.9	34	(46)
Huaneng Power International	Electricity	China	474	0.9	35	(17)
Energa	Electricity	Eastern Europe	453	0.8	36	(28)
Snam Rete Gas	Gas	Europe (excluding UK)	445	0.8	37	(30)
Enersis Chile	Electricity	Latin America	392	0.7	38	-
EDP-Energias de Portugal	Electricity	Europe (excluding UK)	343	0.7	39	-
AES Tiete Energia	Electricity	Latin America	324	0.6	40	-
Hera	Multi Utilities	Europe (excluding UK)	296	0.5	41	(36)
Enea	Electricity	Eastern Europe	224	0.4	42	(44)
Kangda International	Water & Waste	China	154	0.3	43	(45)
Saeta Yield	Renewable Energy	Europe (excluding UK)	149	0.3	44	-
China Water Affairs Group	Water & Waste	China	129	0.3	45	-
Ecofin Water & Power Ords	Multi Utilities	Global	116	0.2	46	(48)
Abengoa Yield	Renewable Energy	Global	104	0.2	47	-
Mytrah Energy	Renewable Energy	India	90	0.2	48	-
Polenergia	Electricity	Eastern Europe	64	0.1	49	(47)
			52,565	99.8
Investment in subsidiaries			100	0.2
Total investments			52,665	100.0

* Holding in bonds and ordinary shares

** Holding in convertible bonds and ordinary shares

Group Income Statement

for the six months to 30 June 2016

		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)	(Audited)
		Six months to 30 June 2016	Six months to 30 June 2016	Six months to 30 June 2016	Six months to 30 June 2015	Six months to 30 June 2015	Six months to 30 June 2015	Year ended 31 December 2015	Year ended 31 December 2015	Year ended 31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£000	£000	£000	£000	£000	£000	£000	£000	£000
Gains/(losses) on investments held at fair value
through profit or loss		-	3,660	3,660	-	(1,274)	(1,274)	-	(4,360)	(4,360)
Income		1,804	-	1,804	1,636	-	1,636	2,691	-	2,691
Investment management fee		(98)	(147)	(245)	(156)	(235)	(391)	(312)	(468)	(780)
Other expenses		(347)	(79)	(426)	(241)	-	(241)	(487)	-	(487)
Reconstruction costs		-	-	-	-	-	-	-	(470)	(470)
Profit/(loss) before finance costs and taxation		1,359	3,434	4,793	1,239	(1,509)	(270)	1,892	(5,298)	(3,406)
Finance costs		-	(564)	(564)	-	(1,352)	(1,352)	-	(2,904)	(2,904)
Profit/(loss) before taxation		1,359	2,870	4,229	1,239	(2,861)	(1,622)	1,892	(8,202)	(6,310)
Taxation		(30)	-	(30)	(166)	-	(166)	(227)	-	(227)
Profit/(loss) for the period		1,329	2,870	4,199	1,073	(2,861)	(1,788)	1,665	(8,202)	(6,537)
Return per Ordinary share (pence)
- basic	3	7.35	15.87	23.22	6.15	(16.38)	(10.23)	9.38	(46.22)	(36.84)

The total columns of this statement represents the Group’s profit or loss, prepared in accordance

with IFRS.

As the parent of the Group, the Company has taken advantage of the exemption not to publish its

own separate Statement of Comprehensive Income. The Company’s total comprehensive income

for the half year ended 30 June 2016 was £4,199,000.

The supplementary revenue and capital columns are prepared under guidance published by the

Association of Investment Companies (“AIC”).

All items derive from continuing operations; the Group does not have any other recognised gains

or losses.

All income is attributable to the equity holders of the Company. There are no minority interests.

Consolidated and Company Balance Sheets

as at 30 June 2016

		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
		Group	Company	Group	Company	Group	Company
		30 June	30 June	30 June	30 June	31 December	31 December
		2016	2016	2015	2015	2015	2015
	Notes	£000	£000	£000	£000	£000	£000
Non current assets
Investments at fair value through
profit or loss		52,565	52,665	77,512	77,562	48,786	48,886
Current assets
Debtors		813	813	685	685	447	447
Derivative financial instruments		-	-	-	-	507	507
Cash at bank		1,691	1,691	1,075	1,075	27,761	27,761
		2,504	2,504	1,760	1,760	28,715	28,715
Total assets		55,069	55,169	79,272	79,322	77,501	77,601
Current liabilities
Creditors: amounts falling due
within one year		(1,059)	(1,159)	(664)	(714)	(784)	(884)
Zero Dividend Preference shares		-	-	(47,190)	(47,190)	(49,780)	(49,780)
Derivative financial instruments		-	-	-	-	(560)	(560)
		(1,059)	(1,159)	(47,854)	(47,904)	(51,124)	(51,224)
Total assets less current liabilities		54,010	54,010	31,418	31,418	26,377	26,377
Creditors: amounts falling due
after more than one year
Zero Dividend Preference shares		(24,637)	(24,637)	-	-	-	-
Net assets		29,373	29,373	31,418	31,418	26,377	26,377
Equity attributable to
Ordinary Shareholders
Share capital		181	181	177	177	181	181
Share premium		8,699	8,699	8,036	8,036	8,699	8,699
Redemption reserve		88	88	88	88	88	88
Capital reserve		11,644	11,644	14,115	14,115	8,774	8,774
Special reserve		7,472	7,472	7,472	7,472	7,472	7,472
Revenue reserve		1,289	1,289	1,530	1,530	1,163	1,163
Total equity attributable to
Ordinary Shareholders		29,373	29,373	31,418	31,418	26,377	26,377
Net asset value per
Ordinary share (pence)	4	162.39	162.39	177.63	177.63	145.83	145.83

Consolidated Statement of Changes in Equity

For the six months to 30 June 2016 (unaudited)
	Ordinary	Share
	share	premium	Redemption	Capital	Special	Revenue
	capital	reserve	reserve	reserve	reserve	reserve	Total
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2016	181	8,699	88	8,774	7,472	1,163	26,377
Profit for the period	-	-	-	2,870	-	1,329	4,199
Ordinary dividends paid	-	-	-	-	-	(1,203)	(1,203)
Balance at 30 June 2016	181	8,699	88	11,644	7,472	1,289	29,373

For the six months to 30 June 2015 (unaudited)
	Ordinary	Share
	share	premium	Redemption	Capital	Special	Revenue
	capital	reserve	reserve	reserve	reserve	reserve	Total
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2015	174	7,444	88	16,976	7,472	1,873	34,027
Loss for the period	-	-	-	(2,861)	-	1,073	(1,788)
Tap issue of Ordinary shares
during the period	3	592	-	-	-	-	595
Ordinary dividends paid	-	-	-	-	-	(1,416)	(1,416)
Balance at 30 June 2015	177	8,036	88	14,115	7,472	1,530	31,418

For the financial year ended 31 December 2015 (audited)
	Ordinary	Share
	share	premium	Redemption	Capital	Special	Revenue
	capital	reserve	reserve	reserve	reserve	reserve	Total
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2015	174	7,444	88	16,976	7,472	1,873	34,027
Loss for the year	-	-	-	(8,202)	-	1,665	(6,537)
Tap issue of Ordinary shares
during the year	7	1,255	-	-	-	-	1,262
Ordinary dividends paid	-	-	-	-	-	(2,375)	(2,375)
Balance at
31 December 2015	181	8,699	88	8,774	7,472	1,163	26,377

Consolidated and Company Cashflow Statements

for the six months ended 30 June 2016

	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	Group	Company	Group	Company	Group	Company
	Six months	Six months	Six months	Six months	Year	Year
	ended	ended	ended	ended	ended	ended
	30 June	30 June	30 June	30 June	31 December	31 December
	2016	2016	2015	2015	2015	2015
	£000	£000	£000	£000	£000	£000
Profit/(loss) before finance
costs and taxation	4,793	4,793	(270)	(270)	(3,406)	(3,406)
Adjustments for
Movement in investments held at
fair value through profit or loss	(3,434)	(3,434)	1,509	1,509	4,360	4,360
(Increase)/decrease in trade and
other receivables	(286)	(286)	972	972	(672)	(672)
(Decrease)/increase in trade and
other payables	(1,090)	(1,090)	44	44	990	990
Overseas taxation paid	(47)	(47)	(143)	(143)	(226)	(226)
Net cash flows from
operating activities	(64)	(64)	2,112	2,112	1,046	1,046
Investing activities
Purchases of investments	(10,118)	(10,118)	(18,094)	(18,094)	(51,916)	(51,916)
Proceeds from sales of investments	11,023	11,023	17,088	17,088	76,223	76,223
Net cash flows from
investing activities	905	905	(1,006)	(1,006)	24,307	24,307
Financing activities
Payment to ZDP shareholders
with “B” rights	(25,708)	(25,708)	-	-	-	-
Proceeds from issue of shares	-	-	1,117	1,117	4,515	4,515
Dividends paid	(1,203)	(1,203)	(1,416)	(1,416)	(2,375)	(2,375)
Net cash used in
financing activities	(26,911)	(26,911)	(299)	(299)	2,140	2,140
(Decrease)/increase in cash
and cash equivalents	(26,070)	(26,070)	807	807	27,493	27,493
Cash and cash equivalents,
beginning of period	27,761	27,761	268	268	268	268
Cash and cash equivalents
at end of period	1,691	1,691	1,075	1,075	27,761	27,761

Notes to the Half Year Report

ACCOUNTING POLICIES

1.1 Basis of preparation

The Half-year Financial Statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” and in accordance with the Statement of Recommended Practice (“SORP”) for investment trusts issued by the Association of Investment Companies (“AIC”) in November 2014, where the SORP is not inconsistent with IFRS.

The financial information contained in this Half-year Report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the periods ended 30 June, 2016 and 30 June, 2015 have not been audited. The financial information for the year ended 31 December, 2015 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the Independent Auditor’s Report which, in respect of both sets of accounts, was unqualified, did not contain an emphasis of matter reference, and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with IFRS, as adopted by the European Union.

The functional currency of the Company is Sterling as this is the currency of the primary economic environment in which the Company operates. Accordingly, the Financial Statements are presented in Sterling rounded to the nearest thousand pounds.

The same accounting policies, presentation and methods of computation have been followed in these Financial Statements as were applied in the preparation of the Company’s Financial Statements for the previous accounting periods.

IFRS 10 Consolidated Financial Statements

The Financial Statements in these accounts reflect the adoption of IFRS 10 (including the Investment Entities amendment) which requires investment companies to value subsidiaries (except for those providing investment related services) at fair value through profit and loss rather than consolidate them. The Directors, having assessed the criteria, believe that the Group meets the criteria to be an investment entity under IFRS 10 and that this accounting treatment better reflects the Company’s activities as an investment trust.

PEWT Securities 2020 PLC, which is controlled by the Company, holds the ZDP shares and has lent the proceeds to the Company. It is considered to provide investment related services to the Group and is therefore required to be consolidated under the IFRS 10 Investment Entities amendment. PEWT Securities 2020 PLC has been consolidated in these Financial Statements using consistent accounting policies to those applied by the Company.

1.2 Presentation of Statement of Comprehensive Income

In order to better reflect the activities of the Company as an investment trust company, and in accordance with guidance issued by the AIC, supplementary information which analyses the Consolidated Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Consolidated Statement of Comprehensive Income.

1.3 Use of estimates

The preparation of Financial Statements requires the Company to make estimates and assumptions that affect the items reported in the Balance Sheet and Statement of Comprehensive Income and the disclosure of contingent assets and liabilities at the date of the Financial Statements. Although these estimates are based on management’s best knowledge of current facts, circumstances and, to some extent, future events and actions, the Company’s actual results may ultimately differ from those estimates, possibly by a significant amount. The investments in the equity of unquoted companies that the Company holds are not traded and as such the prices are more uncertain than those of more widely traded securities. The unquoted investments are valued by reference to valuation techniques approved by the Directors and in accordance with the International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines and IFRS 13.

1.4 Segmental reporting

The chief operating decision maker has been identified as the Board of the Company. The Board reviews the Company’s internal management accounts in order to analyse performance. The Directors are of the opinion that the Company is engaged in one segment of business, being the investment business. Geographical segmental analysis has not been disclosed because the Directors are of the opinion that as an investment company the geographical sources of revenues received by the Company are incidental to its investment activity. The geographical allocation of the investments from which income is received and to which non-current assets relate is given on page 7.

2. Dividend

On 28 July 2016 the Directors declared a second interim dividend of 1.90p per Ordinary share for the year ending 31 December 2016 to holders of Ordinary shares on the register on 1 September 2016. The Ordinary shares will be marked ex-dividend on 2 September 2016 and the dividend will be paid on 30?September 2016.

3. Total return per Ordinary share

The total return per Ordinary share is based on the profit for the half year after taxation of £4,199,000 (six months ended 30 June 2015: £(1,788,000); year ended 31 December 2015: £(6,537,000)) and on 18,088,480 Ordinary shares in issue during the six months ended 30 June 2016 (six months ended 30 June 2015: weighted average of 17,460,690 Ordinary shares; year ended 31 December 2015: weighted average of 17,746,480 Ordinary shares).

4. Net Asset Value

The net asset value per share and the net assets available to each class of share calculated in accordance with International Financial Reporting Standards, are as follows:

	Net asset value	Net assets	Net asset value	Net assets
	per share	available	per share	available
	30 June	30 June	31 December	31 December
	2016	2016	2015	2015
	Pence	£000	Pence	£000
18,088,480 Ordinary shares of £0.01 each
in issue (2015: 18,088,480)	162.39	29,373	145.83	26,377
PEWT Securities PLC Zero Dividend Preference
shares of £0.01 each in issue* (2015: 22,446,099)	n/a	n/a	221.78	49,780
24,073,337 PEWT Securities 2020 PLC
Zero Dividend Preference shares
of £0.01 each in issue* (2015: n/a)	102.34	24,637	n/a	n/a

* Classified as a liability.

5. Taxation charge

The taxation charge of £30,000 (30 June 2015: £166,000 and 31 December 2015: £227,000) relates to irrecoverable overseas taxation.

6. Investment management fee charged by Premier Fund Managers Limited

	(Unaudited)	(Unaudited)	(Audited)
	Six months to	Six months to	Year ended
	30 June	30 June	31 December
	2016	2015	2015
	£000	£000	£000
Basic fee:
40% charged to revenue	98	156	312
60% charged to capital	147	235	468
	245	391	780

7. Section 1158 of the Income and Corporation Tax Act 2010

It is the intention of the Directors to conduct the affairs of the Company so that they satisfy the conditions for approval as an investment trust company set out in section 1158 of the Income and Corporation Tax Act 2010.

8. Post balance sheet event

On 21 July 2016 at a final meeting of the members of the Company, the liquidator concluded that PEWT Securities PLC will be struck-off by the end of October 2016.

Interim Management Report

Premier Energy and Water Trust PLC is required to make the following disclosures in its half year report:

PRINCIPAL RISKS AND UNCERTAINTIES

The Board believes that the principal risks and uncertainties faced by the Company continue to fall into the following categories:

• Structure of the Company and gearing

• Discount volatility

• Dividend levels

• Operational

• Currency risk

• Accounting, legal and regulatory

• Liquidity risk

• Political and regulatory

• Market price risk

Information on each of these is given in the Strategic Report in the Annual Report for the year ended 31 December 2015.

RELATED PARTY TRANSACTIONS

The Directors are recognised as a related party under the Listing Rules and during the six months to 30 June 2016 fees paid to Directors of the Company totalled £43,000 (six months ended 30 June 2015: £41,000 and year to 31 December 2015: £82,000).

GOING CONCERN

The Directors believe, having considered the Company’s investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and income and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the half year report, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

• The condensed set of Financial Statements within the Half-year Report has been prepared in accordance with IAS 34, “Interim Financial Reporting”, as adopted by the European Union; and

• The Interim Management Report includes a fair review of the information required by 4.2.7R (indication of important events during the first six months of the year) and 4.2.8R (disclosure of related party transactions and changes therein) of the FCA’s Disclosure and Transparency Rules.

For and on behalf of the Board.

Geoffrey Burns
Chairman

3 August 2016

Directors and Advisers

DIRECTORS

Geoffrey Burns (Chairman)
Ian Graham
Gillian Nott (appointed 1 March 2016)
Michael Wigley (retired 19 April 2016)
Charles Wilkinson

ALTERNATIVE INVESTMENT FUND MANAGER (“AIFM”)
Premier Portfolio Managers Limited
Eastgate Court
High Street
Guildford
Surrey GU1 3DE
Telephone: [phone]
www.premierfunds.co.uk

INVESTMENT MANAGER
Premier Fund Managers Limited
Eastgate Court
High Street
Guildford
Surrey GU1 3DE
Telephone: [phone]
www.premierfunds.co.uk

Authorised and regulated by the
Financial Conduct Authority

SECRETARY AND REGISTERED OFFICE
Premier Portfolio Managers Limited
Eastgate Court
High Street
Guildford
Surrey GU1 3DE
Telephone: Martin Salmon 0207 982 2725

COMPANY NUMBER
4897881

WEBSITE
www.premierfunds.co.uk

REGISTRAR
Capita Asset Services

The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: [phone]
Overseas: [phone]
E-mail: [e-mail]

CUSTODIAN AND DEPOSITARY
Northern Trust
50 Bank Street
Canary Wharf
London E14 5NT

AUDITOR
Ernst & Young LLP
25 Churchill Place
Canary Wharf
London E14 5NT

STOCKBROKER
N+1 Singer Advisory LLP
One Bartholomew Lane
London EC2N 2AX
Telephone: [phone]

ORDINARY SHARES

SEDOL	3353790GB
LSE	PEW

ZDP SHARES

SEDOL	BYP98L6
LSE	PEZ

GLOBAL INTERMEDIARY IDENTIFICATION NUMBER

GIIN	W6S9MG.00000.LE.826

PREMIER ENERGY AND WATER TRUST PLC Half Year Report 2016