Half-year Report

WEISS KOREA OPPORTUNITY FUND LTD.

LEI 213800GXKGJVWN3BF511

HALF-YEARLY FINANCIAL REPORT

FOR THE PERIOD ENDED 30 JUNE 2017

Weiss Korea Opportunity Fund Ltd. (the “Company”) has today, released its Half-Yearly Financial Report for the period ended 30 June 2017. The Report will shortly be available for inspection via the Company's website www.weisskoreaopportunityfund.com.

For further information, please contact:

N+1 Singer James Maxwell – Nominated Adviser James Waterlow – Sales	[phone]
Northern Trust International Fund Administration Services (Guernsey) Limited Samuel Walden Cara De La Mare	[phone] [phone]

Summary Information

The Company

Weiss Korea Opportunity Fund Ltd. (“WKOF” or the “Company”) was incorporated with limited liability in Guernsey, as a closed-ended investment company on 12 April 2013. The Company’s Shares were admitted to trading on the Alternative Investment Market (“AIM”) of the London Stock Exchange (the “LSE”) on 14 May 2013.

The Company is managed by Weiss Asset Management LP (the “Investment Manager”), a Boston-based investment management company registered with the Securities and Exchange Commission in the United States of America.

Investment Objective and Dividend Policy

The Company's investment objective is to provide Shareholders with an attractive return on their investment, predominantly through long-term capital appreciation. The Company is geographically focused on South Korean companies. Specifically, the Company invests primarily in listed preferred shares issued by companies incorporated in South Korea, which in many cases are currently trading at a discount to the corresponding common shares of the same companies. Since the Company's Admission to AIM, the Investment Manager has assembled a portfolio of South Korean preferred shares that it believes are undervalued and could appreciate based on the criteria that it selects. The Company may, in accordance with its investment policy, also invest some portion of its assets in other securities, including exchange-traded funds, futures contracts and other types of options, swaps and derivatives related to South Korean equities, as well as cash and cash equivalents.

The Company intends to return to Shareholders all dividends received, net of withholding tax, on an annual basis.

Investment Policy

The Company is geographically focused on South Korean companies. Specifically, the Company invests primarily in listed preferred shares issued by companies incorporated in South Korea, which in many cases are currently trading at a discount to the corresponding common shares of the same companies. The Investment Manager has assembled a portfolio of South Korean preferred shares that it believes are undervalued and could appreciate based on criteria it selects. Some of the considerations that affect the Investment Manager’s choice of securities to buy and sell may include the discount at which a preferred share is trading relative to its respective common share, its dividend yield, its liquidity and the weighting of its common share (if any) in the MSCI Korea 25/50 Net Total Return Index (the “Korea Index”), among other factors. Not all of these factors will necessarily be satisfied for particular investments. The Investment Manager will not generally make decisions based on corporate fundamentals or its view of the commercial prospects of the issuer. Preferred shares are selected by the Investment Manager at its sole discretion, subject to the overall control of the board of directors of the Company (the “Board”).

The Company invests primarily in South Korean preferred shares, but it may invest some portion of its assets in other securities, including exchange-traded funds, futures contracts and other types of options, swaps and derivatives related to South Korean equities, as well as cash and cash equivalents. The Company does not have any concentration limits.

The Company has not hedged its exposure to foreign currency during the period ended 30 June 2017 (31 December 2016: Nil).

Share Buy-backs

At the Annual General Meeting (the “AGM”) held on 19 July 2017, Shareholders granted the Company a general buy-back authority of up to 40% of the Company's issued Ordinary Share capital. In addition, on 24 March 2017, the Company appointed N+1 Singer Advisory LLP to manage an irrevocable programme during the closed period leading up to the publication of the Company’s full year results (the “Closed Period Buy-Back Programme”) to buy back Ordinary Shares within certain pre-set parameters. No shares were bought back under this programme.

On 4 August 2017, the Company reappointed N+1 Singer Advisory LLP to manage the Closed Period Buy-Back Programme to buy back Ordinary Shares within certain pre-set parameters during the closed period leading up to the date of publication of these Unaudited Half-Yearly results. Any Ordinary Shares purchased in the Closed Period Buy-Back Programme will count towards the Company's Ordinary Share buy-back authority of 40% of the Company's issued Ordinary Share capital, as approved at the Company's AGM.

For additional information on share buy-backs refer to Note 5.

Shareholder Information

Northern Trust International Fund Administration Services (Guernsey) Limited (the “Administrator”) is responsible for calculating the Net Asset Value (“NAV”) per Share of the Company. The unaudited NAV per Ordinary Share is calculated on a weekly basis and at the month end by the Administrator, is announced by a Regulatory News Service and is available through the Company’s website, www.weisskoreaopportunityfund.com.

Realisation Opportunity

In accordance with the Company’s Articles of Incorporation and Admission Document, the Company offered all Shareholders the right to elect to realise some or all of the value of their Ordinary Shares (the “Realisation Opportunity”), less applicable costs and expenses.

On 20 March 2017, the Company announced that pursuant to the Realisation Opportunity, Shareholders who were on the register as at the record date may elect, during the election period, to redesignate all or part (provided that such part be rounded up to the nearest whole Ordinary Share) of their Ordinary Shares as Realisation Shares, subject to the aggregate NAV of the continuing Ordinary Shares as at the close of business on the last business day before the Realisation Date being not less than £50 million. The Ordinary Shares held by the Shareholders who elected to participate in the Realisation Opportunity were redesignated as Realisation Shares and the Portfolio was split into two separate and distinct Pools, namely the Continuation Pool (comprising the assets attributable to the continuing Ordinary Shares) and the Realisation Pool (comprising the assets attributable to the Realisation Shares).

On 15 May 2017, in respect of Shareholders who had elected to participate in the Realisation Opportunity, 8,044,769 Ordinary Shares were redesignated as Realisation Shares. The Realisation Shares were not listed or admitted to AIM.

On 7 July 2017, the Board approved the first compulsory redemption of Realisation Shares representing approximately 95 per cent of Realisation Shares in issue. The redemption was effected pro-rata to holdings of Realisation Shares on the register at the close of business on 30 June 2017.

On 9 August 2017, the Board approved the second and final compulsory redemption of the remaining 402,266 Realisation Shares.

For additional information on the Realisation Opportunity refer to Note 5.

Company financial highlights and performance summary for the period ended 30 June 2017         

							As at
					As at 30 June 2017		31 December 2016
					(Unaudited)		(Audited)
					£		£
Total Net Assets					171,340,353		146,374,699
NAV per share - Continuation Pool					1.8266		1.5027
NAV per share - Realisation Pool					1.8025		-
Basic and diluted earnings per share - Continuation Pool					0.3458		0.1800
Basic and diluted earnings per share - Realisation Pool					0.1358		-
Mid-Market share price - Continuation Pool					1.7800		1.4200
Discount to NAV - Continuation Pool					(2.6%)		(5.5%)

As at close of business on 4 September 2017, the latest published NAV per share of the Continuation Pool had decreased to £1.7928 (as at 31 August 2017) and the share price stood at £1.6800.

Total expense ratio

The annualised total expense ratio of the Continuation Pool and the Realisation Pool for the six months ended 30 June 2017 were 1.90% and 1.17%, respectively (as at 31 December 2016: 1.80% and Nil, respectively).

Chairman’s Review

We are pleased to provide the 2017 Semi-annual Financial Report on the Company. During the period from 31 December 2016 to 30 June 2017 (the “Period”), the Company’s NAV increased by 21.55%,[1] outperforming the reference MSCI Korea 25/50 Capped Index, which returned 20.94% in pounds sterling.[2] Since the Admission of the Company to AIM in May 2013 the NAV has increased by 86.39% compared to Index returns of 48.70%. A report from the Investment Manager follows.

In accordance with the commitment in the Company’s Admission Document, during the Period the Company offered Shareholders the opportunity to elect to realise all or a part of their shareholding in the Company (the “Realisation Opportunity”). A circular with full details of the Realisation Opportunity was published on 20 March 2017. Approximately 8.6% of Ordinary Shares were submitted for realisation. On 15 May 2017, the Company’s Portfolio was divided into two pools: a Continuation Pool and a Realisation Pool. Since then, the Company has carried out an orderly wind up of the Realisation Pool, and fully returned the capital in the Realisation Pool through two redemptions in mid-July and mid-August 2017.

Prior to the Realisation, the Directors also declared a final dividend of 3.3262 pence per share (period ended 30 June 2016: 2.2416 pence per share) to distribute the income received by the Company in respect of the year ended 31 December 2016. This dividend was paid to all Shareholders regardless of any election they made under the Realisation Opportunity.

Since its inception, the Company has not engaged in hedging activities or made use of leverage to fund investments. However, as stated in the Admission Document, the Company reserves the right to do so in the future.

The Company has continued its active share repurchase program as part of its discount management strategy. During the Period, the Company repurchased 3,500,000 shares. Since Admission, and as at the date of this document, the Company has repurchased 11,090,250 shares of the original 105,000,000 Ordinary Shares issued at Admission. The Board is authorised to repurchase up to 40% of the Company's outstanding Ordinary Shares in issue as at 19 July 2017 (on which date the Company had 84,364,981 Ordinary Shares after an additional share repurchase of 1,500,000 Ordinary Shares on 12 July 2017). The Board also has in place standing instructions with the Company’s broker, N+1 Singer Advisory LLP, for the repurchase of the Company’s shares during closed periods when the Board is not permitted to give individual instructions, typically around the preparation of the Annual and Half-Yearly Financial Reports. The Board believes that the share repurchase program is an excellent discount control mechanism and that it is mutually beneficial for continuing and exiting Shareholders. We will continue to keep Shareholders informed of any share repurchases through public announcements.

If you would like to speak with the Investment Manager or learn about potential opportunities to meet with them, please contact the Company’s broker, N+1 Singer.

I would like to thank Shareholders for their support, and look forward to the continued success of the Company in the future. I would also like to thank Weiss Asset Management LP, as well as the other service providers, all of whom have contributed greatly to the Company.

Sincerely,

Norman Crighton

Chairman

4 September 2017

[1] This return includes all dividends paid to the Company’s Shareholders, but does not assume such dividends are reinvested.

[2] MSCI total return indices are calculated as if any dividends paid by constituents are reinvested at their respective closing prices on the ex-date of the distribution.

Investment Manager’s Report

For the six month period ended 30 June 2017

Introduction

The Company invests primarily in South Korean preferred shares. In general, South Korean preferred shares do not have fixed dividends or maturity dates. Instead, the typical contractual terms of preferred shares state that their dividends will be incrementally higher than the dividends of their corresponding common shares. Hence, such preferred shares fully participate in dividend growth of the issuer and are essentially non-voting equity shares. Despite this, many South Korean preferred shares trade at significant discounts to their corresponding common shares. Because of this pricing anomaly, South Korean preferred shares’ price-to-earnings ratios are typically substantially lower, and their dividend yields are higher, than those of their corresponding common shares.

Performance

We are pleased to report that the NAV of the Company increased by 21.55%[1] during the Period, outperforming the reference MSCI Korea 25/50 Index, which returned 20.94%. Although we report the Company’s NAV weekly, we caution readers against using past performance (and particularly short-term returns) to predict long-term performance.

Portfolio

The weighted average discount of preferred shares held by the Company was 37.5% on 30 June 2017, compared with 38.4% on 31 December 2016.[2]

Our two largest positions are in Samsung Electronics and Hyundai Motors preferred shares. Samsung was up significantly during the Period: the ordinary shares were up 30%, and the preferred shares were up 32%.[3]

We also have major positions in Hyundai Motors preferred shares. Hyundai sales in China appear to have been hurt by the Chinese reaction to the deployment of Terminal High Altitude Area Defense system (the “THAAD”) in South Korea. It is also vulnerable to possible actions by the U.S. that could force Korea to drop non-tariff barriers to imports of autos. On the other hand, as leases eventually stabilise as a fraction of sales, cash flow should increase, enabling Hyundai to increase its dividend, which we believe would be bullish for the share price of Hyundai.

Realisation Opportunity

An important event for the Company in the first half of 2017 was the Realisation Opportunity offered to all Shareholders. In accordance with the Admission Document, and as described in the Circular to Shareholders published on 20 March 2017, the Company gave Shareholders the opportunity to elect to realise all or a part of their shareholding on the fourth anniversary of the Company’s Admission to AIM. 8.6% of Ordinary Shares were elected by Shareholders to be realised. 

Corporate Governance

Since inception, the Board has had a policy of buying back the Company’s Ordinary Shares at a discount to NAV. Since inception, these purchases have totaled 11,090,250 shares, which is 10.6% of the total number of shares admitted to trading on AIM on the Company’s admission in 2013. 

Share repurchases at a discount to NAV are accretive. When the Company repurchases shares at a discount to NAV, continuing Shareholders are getting a double discount – a discount on a portfolio of preferred shares that are themselves trading at a discount to their respective ordinary shares.

We are very pleased with the support that the Board has provided toward our efforts in providing an example of good corporate governance for the investment trust industry. By standing ready to repurchase at a discount, other market participants will be likely to buy the shares when the discounts widen (they are getting asymmetric exposure – their risk from the discount widening is limited while they have the potential benefit of the discount narrowing or the Company’s shares trading at a premium).

One argument for why investment trusts often trade at a discount is that investors have added volatility from fluctuations in the discount, a risk that is not present for mutual funds or most ETFs. Because the Company has been repurchasing its own Ordinary Shares when they trade at significant discounts, the volatility of the Company’s discount has been relatively low.

At 30 June 2017, the Company was trading at a 2.6% discount to its NAV, and it has rarely traded at much more than a 7% discount to its NAV. We continue to believe that the much larger weighted average discount on the Company’s underlying preferred shares held (which was 37.5% on 30 June 2017) dwarfs the Company’s much smaller discount in terms of potential long-term returns.

Geo-Political Risks

We don’t pretend to be able to explain the short run response of markets to geo-political developments. During the first half of the year, as well as the past twelve months, periods in which global stock markets have done exceptionally well, the South Korean stock market has been one of the best performing of the major stock markets. This was a period during which South Korea’s President was forced to resign and both the former president and the senior management of Samsung were indicted over corruption charges; the U.S. elected a president who ran on a protectionist platform (South Korea’s economy is heavily dependent on exports), and who, upon taking office, immediately pulled the U.S. out of the Transpacific trade agreement; and China, which is one of South Korea’s major trading partners, discouraged cultural and trading ties with South Korea in response to the deployment of an extended range missile defense system, THAAD, in South Korea. More recently, the South Korean minimum wage was increased by 16%.

The threat to South Korea from North Korea remains troublesome. North Korea has been successfully testing solid fuel missiles which could potentially enable it to launch nuclear missiles on short notice from mobile launch pads. North Korea is accumulating a small arsenal of nuclear weapons. Although they might not be suitable as warheads on intercontinental ballistic missiles, they could potentially be used against South Korea. Once North Korea gains the ability to attack the U.S. it may become emboldened to take more aggressive actions against South Korea.

China has taken a very aggressive position against the deployment of THAAD in South Korea. The radar that is part of the THAAD system reaches far into China. As noted above, the Chinese government has retaliated by creating obstacles for South Korean businesses and entertainment groups, and have reduced tourism from China to South Korea. However, the threat from North Korea is likely to induce Japan to deploy a more sophisticated missile defense system. If Japan were to deploy THAAD, that might defuse Chinese sentiment against South Korea. But for now there is a substantial risk of South Korean companies suffering from Chinese retaliation against THAAD. 

The South Korean public seems remarkably unflappable, but sentiment could easily change. By most measures the South Korean stock market remains cheap and seems likely to benefit from its strong technology sector and highly educated work force. However, while retained earnings continue to accumulate, so too do the geo-political risks.

Developments at Weiss Asset Management

I am pleased to announce that Paul Sherman has agreed to become the President of Weiss Asset Management LP, while I’ve assumed the title of CEO. This is the culmination of a process that has been going on for several years. I have increasingly been focused on mentoring and strategic decisions while Paul has assumed more and more of the day to day managerial responsibilities for the firm. I believe that Paul is a better manager than I am, so these roles reflect our relative abilities. We both remain on the Investment Committee alongside Eitan Milgram.

Paul, Eitan, and the rest of our team are as committed as I am to high ethical standards, which I believe is also in the long run economic interest of our investors. That commitment enables us to compete for talent. The employees we want to work for us would not want to work for an unethical firm. Thus our culture of high ethical standards gives us an edge in recruiting and retaining talent.

Conclusion

We are fortunate to have sophisticated investors who understand the merits of our strategy. While we are pleased with performance since inception, the short-term whims of the market are hard to predict and we therefore expect periods of turbulence. We remain enthusiastic about the original investment thesis, namely that owning securities at deep discounts to their fundamental value is a good long-term investing strategy and South Korean preferred shares remain such an opportunity.

Andrew Weiss, CEO

Weiss Asset Management LP

4 September 2017

[1] This is the return for the Continuation Pool, and includes dividends.

[2] Weighted average discount of preferred shares held is the average discount of the last traded price of the preferred shares held by WKOF to the last traded price of the respective common shares of the same issuer, weighted by the market value of each investment.

[3] Return in South Korean won, including dividends.

Directors

The Company has three non-executive Directors, all of whom are considered independent of the Investment Manager and details are set out below.

Norman Crighton (aged 51)

Mr Crighton is Chairman of the Company. He is also a non-executive director of Global Fixed Income Realisation Limited and RM Secured Direct Lending plc. Norman was, until May 2011, an investment manager at Metage Capital Limited where he was responsible for the management of a portfolio of closed-ended funds and has more than 25 years’ experience in closed-ended funds having worked at Olliff and Partners, LCF Edmond de Rothschild, Merrill Lynch, Jefferies International Limited and latterly Metage Capital Limited. His experience covers analysis and research as well as sales and corporate finance. Norman is British and resident in the United Kingdom. Mr Crighton was appointed to the Board in 2013.

Stephen Charles Coe (aged 51)

Stephen is currently Chairman of European Real Estate Investment Trust Limited and TOC Property Backed Lending Trust plc. He is also director (and Chairman of the Audit Committee) of Raven Russia Limited, Leaf Clean Energy Company and Trinity Capital PLC. He has been involved with offshore investment funds and managers since 1990 with significant exposure to property, debt, emerging markets and private equity investments.

He qualified as a Chartered Accountant with Price Waterhouse Bristol in 1990 and remained in audit practice, specialising in financial services, until 1997. From 1997 to 2003 he was a director of the Bachmann Group of fiduciary companies and Managing Director of Bachmann Fund Administration Limited, a specialist third party fund administration company. From 2003 to 2006 Stephen was a director with Investec in Guernsey and Managing Director of Investec Trust (Guernsey) Limited and Investec Administration Services Limited. He became self employed in August 2006 providing services to financial services clients.

Robert Paul King (aged 54)

Mr King is a non-executive director for a number of open and closed-ended investment funds. He was a director of Cannon Asset Management Limited and their associated companies, from 2007 to 2011. Prior to this, he was a director of Northern Trust International Fund Administration Services (Guernsey) Limited (formerly Guernsey International Fund Managers Limited) where he had worked from 1990 to 2007. He has been in the offshore finance industry since 1986 specialising in administration and structuring offshore open and closed-ended investment funds. Robert is British and resident in Guernsey. Mr King was appointed to the Board in 2013.

Directors’ Responsibility Statement

The Directors are responsible for preparing the Unaudited Half-Yearly Financial Report (the “Condensed Financial Statements”), which have not been audited by an independent auditor, and confirm that to the best of their knowledge:

• these Condensed Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and in accordance with International Accounting Standard 34 “Interim Financial Reporting” issued by the European Union and the AIM Rules of the LSE;
• these Condensed Financial Statements include a fair review of important events that have occurred during the period and their impact on the Condensed Financial Statements, together with a description of the principal risks and uncertainties of the Company for the remaining six months of the financial period as detailed in the Investment Manager’s Report; and
• these Condensed Financial Statements include a fair review of related party transactions that have taken place during the six month period which have had a material effect on the financial position or performance of the Company, together with disclosure of any changes in related party transactions in the last Annual Report and Audited Financial Statements which have had a material effect on the financial position of the Company in the current period.

The Directors confirm that the Condensed Financial Statements comply with the above requirements.

On behalf of the Board,

Norman Crighton

Chairman

Stephen Coe

Director

4 September 2017

Condensed Statement of Financial Position

						As at		As at
						30 June		31 December
						2017		2016
						(Unaudited)		(Audited)
					Notes	£		£
Assets
Financial assets at fair value through profit or loss						151,887,731		141,956,597
Cash and cash equivalents						19,294,383		2,240,481
Due from broker						120,447		-
Other receivables						488,300		3,536,330
Total assets						171,790,861		147,733,408
Liabilities
Current liabilities
Due to broker						-		151,910
Other payables						450,508		1,206,799
Total liabilities						450,508		1,358,709
Net assets						171,340,353		146,374,699
Represented by:
Shareholders' equity and reserves
Share capital
Continuation Pool					5	74,626,956		93,626,149
Realisation Pool					5	13,408,317		-
Other reserves
Continuation Pool						82,212,745		52,748,550
Realisation Pool						1,092,335		-
Total shareholders' equity						171,340,353		146,374,699
Net assets per share:
Continuation Pool					8	1.8266		1.5027
Realisation Pool					8	1.8025		-

The notes form an integral part of these Condensed Financial Statements.

The Condensed Financial Statements were approved and signed by the Board of Directors on 4 September 2017.

Norman Crighton

Chairman

Stephen Coe

Director

Condensed Statement of Comprehensive Income

								For the period ended		For the period ended
								30 June 2017		30 June 2016
								(Unaudited)		(Unaudited)
							Note	£		£
Income
Net changes in fair value of financial assets at fair value through profit or loss								34,860,943		13,569,107
Income								687,034		392,915
Total income								35,547,977		13,962,022
Expenses
Operating expenses								(1,716,716)		(1,337,720)
Total operating expenses								(1,716,716)		(1,337,720)
Profit for the period before tax								33,831,261		12,624,302
Withholding tax							2(r)	(151,105)		(86,441)
Profit for the period after tax								33,680,156		12,537,861
Profit and comprehensive income for the period								33,680,156		12,537,861
Basic and diluted earnings per share:
Continuation Pool								0.3458		0.1287
Realisation Pool								0.1358		-

All items derive from continuing activities.

The notes form an integral part of these Condensed Financial Statements.

Condensed Statement of Changes in Equity

For the period ended 30 June 2017 (Unaudited)
				Continuation Pool		Realisation Pool
				Share	Other	Share	Other
				capital	reserves	capital	reserves	Total
			Notes	£	£	£	£	£
Balance at 1 January 2017				93,626,149	52,748,550	-	-	146,374,699
Profit and comprehensive income for the period				-	32,587,821	-	1,092,335	33,680,156
Transactions with Shareholders, recorded directly in equity
Repurchase of Ordinary Shares and cancelled on purchase			5	(5,590,876)	-	-	-	(5,590,876)
Redesignation of Realisation Shares			5	(13,408,317)	-	13,408,317	-	-
Distributions paid			3	-	(3,123,626)	-	-	(3,123,626)
Balance at 30 June 2017				74,626,956	82,212,745	13,408,317	1,092,335	171,340,353
For the period ended 30 June 2016 (Unaudited)
				Continuation Pool		Realisation Pool
				Share	Other	Share	Other
				capital	reserves	capital	reserves	Total
			Note	£	£	£	£	£
Balance at 1 January 2016				93,746,629	37,396,149	-	-	131,142,778
Profit and comprehensive income for the period				-	12,537,861	-	-	12,537,861
Transactions with Shareholders, recorded directly in equity
Repurchase of ordinary shares and cancelled on purchase				(120,480)	-	-	-	(120,480)
Distributions paid			3	-	(2,183,537)	-	-	(2,183,537)
Balance at 30 June 2016				93,626,149	47,750,473	-	-	141,376,622

The notes form an integral part of these Condensed Financial Statements.

Condensed Statement of Cash Flows

		For the period ended		For the period ended
		30 June 2017		30 June 2016
		(Unaudited)		(Unaudited)
	Note	£		£
Cash flows from operating activities
Profit for the period		33,680,156		12,537,861
Adjustments for:
Net change in fair value of financial assets held at fair value profit or loss		(34,860,943)		(13,569,107)
Effect of foreign exchange rate fluctuations		(39,011)		885,334
Decrease in debtors		3,048,030		1,980,666
Decrease in creditors		(756,291)		(481,915)
Net cash generated from operating activities		1,071,941		1,352,839
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		(9,909,082)		(33,225,181)
Proceeds from the sale of financial assets at fair value through profit or loss		34,605,545		32,283,978
Net cash generated from/(used in) investing activities		24,696,463		(941,203)
Cash flows from financing activities
Repurchase of Ordinary Shares and cancelled on purchase		(5,590,876)		(120,480)
Distributions paid	3	(3,123,626)		(2,183,537)
Net cash used in financing activities		(8,714,502)		(2,304,017)
Net increase/(decrease) in cash and cash equivalents		17,053,902		(1,892,381)
Cash and cash equivalents at the beginning of the period		2,240,481		6,360,135
Cash and cash equivalents at the end of the period		19,294,383		4,467,754

The notes form an integral part of these Condensed Financial Statements.

Notes to the Unaudited Condensed Financial Statements

1. General information

The Company was incorporated with limited liability in Guernsey, as a closed-ended investment company on 12 April 2013. The Company’s Shares were admitted to trading on the AIM of the LSE on 14 May 2013.

The Company’s investment objective and policy is set out in the Summary Information.

The Investment Manager of the Company is Weiss Asset Management LP.

2. Significant accounting policies

1. Statement of compliance

The Condensed Financial Statements of the Company for the period ended 30 June 2017, have been prepared in accordance with IFRS issued by the European Union and the AIM Rules of the London Stock Exchange. They give a true and fair view and are in compliance with the Companies (Guernsey) Law, 2008.

1. Basis of preparation

The Condensed Financial Statements are prepared in pounds sterling (£), which is the Company’s functional and presentational currency. They are prepared on a historical cost basis modified to include financial assets at fair value through profit or loss.

The Condensed Financial Statements, covering the period from 1 January to 30 June 2017, are not audited.

The same accounting policies and methods of computation have been applied to the Condensed Financial Statements as in the Annual Report and Audited Financial Statements at 31 December 2016. The presentation of the Condensed Financial Statements is consistent with the Annual Report and Audited Financial Statements.

The Condensed Financial Statements do not include all the information and disclosures required in the Annual Report and Audited Financial Statements and should be read in conjunction with the Annual Report and Audited Financial Statements at 31 December 2016. The Auditor’s Report contained within the Annual Report and Audited Financial Statements provided an unmodified opinion.

The preparation of the Condensed Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the date of these Condensed Financial Statements. If in the future such estimates and assumptions, which are based on management’s best judgement at the date of the Condensed Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.

1. Going concern

Given that the Company has continued in existence following the Realisation Opportunity and will unless it has already been determined that the Company be wound up, every two years after the Realisation Date, the Directors will propose further realisation opportunities for Shareholders who have not previously elected to realise their Ordinary Shares using a similar mechanism used in the previously announced Realisation Opportunity.

Based on the fact that the assets currently held by the Company consist mainly of securities that are readily realisable, whilst the Directors acknowledge that the liquidity of these assets needs to be managed, the Directors believe that the Company has adequate financial resources to meet its liabilities as they fall due for at least twelve months from the date of this report, and that it is appropriate for the Condensed Financial Statements to be prepared on a going concern basis.

1. Standards, amendments and interpretations not yet effective

At the date of approval of these Condensed Financial Statements, the following standards and interpretations, which have not been applied in these Condensed Financial Statements, were in issue but not yet effective:

IFRS 9 ‘Financial Instruments’ is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted and amends IAS 39 ‘Financial Instruments – Recognition and measurement’. IFRS 9 specifies how an entity should classify and measure financial assets, including some hybrid contracts. They require all financial assets to be classified on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset; this classification includes financial assets initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, particular transaction costs; subsequently measured at amortised costs or fair value. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of IAS 39. They apply a consistent approach to classifying financial assets and replace the numerous categories of financial assets in IAS 39, each of which had its own classification criteria.

They also result in one impairment method, replacing the numerous impairment methods in IAS 39 that arise from the different classification.

IFRS 15 ‘Revenue from Contracts with Customers’ is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 ‘Revenue’.

The Company currently recognises dividend income under IAS 18 ‘Revenue’. The Company does not anticipate any impact on its recognition of dividend income under IFRS 15 ‘Revenue from Contracts with Customers’ as the standard only outlines the treatment of revenue from customer contracts. Dividend income will continue to be recognised under IAS 18 ‘Revenue’, when the Company’s right to receive payments is established.

The Board anticipates that the adoption of these standards and interpretations in a future period will not have a material impact on the Condensed Financial Statements of the Company, other than IFRS 9. The Company is currently evaluating the potential effect of this standard.

1. Financial instruments

i.     Classification

Financial assets are classified into the following categories: financial assets at fair value through profit or loss and loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

ii.      Recognition

Financial assets at fair value through profit or loss (“investments”)

Financial assets and derivatives are recognised in the Company’s Condensed Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.

Purchases and sales of investments are recognised on the trade date (the date on which the Company commits to purchase or sell the investment). Investments purchased are initially recorded at fair value, being the consideration given and excluding transaction or other dealing costs associated with the investment.

Subsequent to initial recognition, investments are measured at fair value. Gains and losses arising from changes in the fair value of investments and gains and losses on investments that are sold are recognised through profit or loss in the Condensed Statement of Comprehensive Income within net changes in fair value of financial assets at fair value through profit or loss.

Other financial instruments

For other financial instruments, including other receivables and other payables, the carrying amounts as shown in the Condensed Statement of Financial Position approximate the fair values due to the short term nature of these financial instruments.

iii.   Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments traded in active markets are valued at the latest available bid prices ruling at midnight, Greenwich Mean Time (“GMT”), on the reporting date. The Directors are of the opinion that the bid-market prices are the best estimate of fair value. Gains and losses arising from changes in the fair value of financial assets and financial liabilities are shown as net gains or losses on financial assets through profit or loss in the Condensed Statement of Comprehensive Income in the period in which they arise.

iv.   Derecognition of financial instruments

A financial asset is derecognised when: (a) the rights to receive cash flows from the asset have expired; (b) the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass through arrangement;” or (c) the Company has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset using the average cost method and the consideration received (including any new asset obtained, less any new liability assumed) is recognised in profit or loss.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.

1. Net changes in fair value of financial assets at fair value through profit or loss

Net changes in fair value of financial assets at fair value through profit or loss includes all realised and unrealised fair value changes and foreign exchange differences, but excludes dividend income.

1. Income

Dividend income from equity investments is recognised through profit or loss in the Condensed Statement of Comprehensive Income when the relevant investment is quoted ex-dividend.

1. Expenses

All expenses are accounted for on an accruals basis. Expenses incurred on the acquisition of financial assets at fair value through profit or loss and management fees are charged to the Condensed Statement of Comprehensive Income.

1. Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalents, which can include bank overdrafts, are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant changes in value. Cash, deposits with banks and bank overdrafts are stated at their principal amount.

1. Share capital

Ordinary Shares and Realisation Shares are classified as equity. Incremental costs directly attributable to the issue of these Shares are shown in equity as a deduction, net of tax, from the proceeds and disclosed in the Condensed Statement of Changes in Equity.

For further information on Realisation Shares, see Note 5.

1. Treasury shares

Where the Company purchases its own share capital, the consideration paid, which includes any directly attributable costs, is deducted through share capital. The difference between the total consideration and the total nominal value of all shares purchased is recognised through other reserves, which is a distributable reserve.

When such Shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is recognised as an increase in equity and the resulting surplus or deficit on the transaction is transferred to or from other reserves.

Where the Company cancels treasury shares, no further adjustment is required to the share capital account at the time of cancellation. Shares held in treasury are excluded from calculations when determining NAV per share and earnings per share.

• Foreign currency translations

Functional and presentational currency

The Condensed Financial Statements of the Company are presented in the currency of the primary economic environment in which the Company operates (its “functional currency”). The Directors have considered the currency in which the original capital was raised, distributions will be made and ultimately the currency in which capital would be returned in a liquidation.

On the Condensed Statement of Financial Position date, the Directors believe that pounds sterling best represents the functional currency of the Company. For the purpose of the Condensed Financial Statements, the results and financial position of the Company are expressed in pounds sterling, which is the presentational currency of the Company. Monetary assets and liabilities denominated in foreign currencies are translated into pounds sterling at the exchange rate at the reporting date. Non-monetary assets denominated in foreign currencies that are measured at fair value are translated into pounds sterling at the exchange rate at the date on which the fair value was determined. Realised and unrealised gains or losses on currency translation are recognised in the Condensed Statement of Comprehensive Income. Foreign currency differences relating to investments at fair value through profit or loss are included within net changes in fair value of financial assets at fair value through profit or loss.

1. Operating segments

The Board has considered the requirements of IFRS 8 ‘Operating Segments’, and is of the view that the Company is engaged in a single segment of business, being an investment strategy tied to listed preferred shares issued by companies incorporated in South Korea. The Board, as a whole, has been determined as constituting the chief operating decision maker of the Company.

The key measure of performance used by the Board to assess the Company’s performance and to allocate resources is the total return on the Company’s NAV, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in this Unaudited Half-Yearly Financial Report.

The Board of Directors is charged with setting the Company’s investment strategy in accordance with the investment policy. They have delegated the day to day implementation of this strategy to the Company’s Investment Manager but retain responsibility to ensure that adequate resources of the Company are directed in accordance with their decisions. The investment decisions of the Investment Manager are reviewed on a regular basis to ensure compliance with the policies and legal responsibilities of the Board. The Investment Manager has been given full authority to act on behalf of the Company, including the authority to purchase and sell securities and other investments on behalf of the Company and to carry out other actions as appropriate to give effect thereto. Whilst the Investment Manager may make the investment decisions on a day to day basis regarding the allocation of funds to different investments, any changes to the investment strategy or major allocation decisions have to be approved by the Board, even though they may be proposed by the Investment Manager.

The Board therefore retains full responsibility as to the major decisions made on an on-going basis. The Investment Manager will always act under the terms of the Admission Document which cannot be significantly changed without the approval of the Board of Directors and where necessary, Shareholders.

• Other receivables

Other receivables are amounts due in the ordinary course of business. Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

• Other payables

Other payables are obligations to pay for services that have been acquired in the ordinary course of business. Other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1. Due from and due to brokers

Amounts due from and due to brokers represent receivables for securities sold and payables for securities purchased that have been contracted for but not yet settled or delivered on the Condensed Statement of Financial Position date, respectively.

1. Dividend distribution

Dividend distribution to the Company’s Shareholders is recognised as a liability in the Company’s Unaudited Half-Yearly Financial Report and disclosed in the Condensed Statement of Changes in Equity in the period in which the dividends are proposed and approved by the Board.

1. Taxation

The Company has been granted Exempt Status under the terms of The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 to income tax in Guernsey. Its liability is an annual fee of £1,200 (2016: £1,200). 

The amounts disclosed as taxation in the Condensed Statement of Comprehensive Income relates solely to withholding tax levied in South Korea on distributions from South Korean companies at an offshore rate of 22%.

1. Other reserves

Total comprehensive income for the period is transferred to Other Reserves.

3. Dividends to Shareholders

Dividends, if any, will be paid annually each year. An annual dividend of 3.3262 pence per share (£3,123,626) was approved on 4 May 2017 and paid on 2 June 2017, in respect of the year ended 31 December 2016. 

For the period ended 30 June 2016, an annual dividend of 2.2416 pence per share (£2,183,537) was approved on 2 June 2016 and paid on 28 June 2016, in respect of the year ended 31 December 2015.

4. Significant accounting judgements, estimates and assumptions

The preparation of the Condensed Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

Judgements

As disclosed in Note 2(l), the Company’s functional currency is pounds sterling. Pounds sterling is the currency in which the original capital was raised, distributions will be made and ultimately the currency in which capital would be returned in a liquidation.

5. Share capital

Ordinary Shares

							As at	As at
							30 June	31 December
							2017	2016
							(Unaudited)	(Audited)
Ordinary Shares							£	£
Authorised
Unlimited Ordinary Shares at no par value							-	-
Issued at no par value
85,864,981 (2016: 97,409,750) unlimited Ordinary Shares at no par value							-	-
Reconciliation of number of Ordinary Shares
							As at	As at
							30 June	31 December
							2017	2016
							(Unaudited)	(Audited)
Continuation Shares							No. of Shares	No. of Shares
Ordinary Shares at the beginning of the period/year							97,409,750	97,509,750
Purchase of own Ordinary Shares for cancellation							(3,500,000)	(100,000)
Redesignation of Realisation Shares							(8,044,769)	-
Total Ordinary Shares in issue at the end of the period/year							85,864,981	97,409,750
							As at	As at
							30 June	31 December
							2017	2016
							Share Capital	Share Capital
							(Unaudited)	(Audited)
							£	£
Ordinary Share Capital at the beginning of the period/year							93,626,149	93,746,629
Purchase cost of own Ordinary Shares for cancellation							(5,590,876)	(120,480)
Redesignation of Realisation Shares							(13,408,317)	-
Total Ordinary Share Capital at the end of the period/year							74,626,956	93,626,149

The Company has a single class of Ordinary Shares, of no par value, which were issued by means of an initial public offering on 14 May 2013, at 100 pence per Share.

The rights attaching to the Ordinary Shares are as follows:

1. The holders of Ordinary Shares shall confer the right to all dividends in accordance with the Articles of Incorporation of the Company.
2. The capital and surplus assets of the Company remaining after payment of all creditors shall, on winding up or on a return (other than by way of purchase or redemption of own Ordinary Shares) be divided amongst the Shareholders on the basis of the capital attributable to the Ordinary Shares at the date of winding up or other return of capital.
3. The Shareholders present in person or by proxy or (being a corporation) present by a duly authorised representative at a general meeting have, on a show of hands, one vote and, on a poll, one vote for every Share.
4. On 20 March 2017, being 56 days before the Realisation Date, the Shareholders were entitled to serve a written notice (a “Realisation Election”) requesting that all or a part of the Ordinary Shares held by them be redesignated to Realisation Shares, subject to the aggregate NAV of the continuing Ordinary Shares on the last business day before the Realisation Date being not less than £50 million. The Realisation Notice, once given, was irrevocable unless the Board agreed otherwise. If one or more Realisation Elections were duly made and the aggregate NAV of the continuing Ordinary Shares on the last business day before the Realisation Date was less than £50 million, the Directors may propose an ordinary resolution for winding up of the Company and may pursue a liquidation of the Company instead of splitting the Portfolio into the Continuation Pool and the Realisation Pool.
5. On 15 May 2017, 8,044,769 Ordinary Shares, which represented approximately 8.6 per cent of the Company’s issued Ordinary Share capital were redesignated as Realisation Shares. See further details on Realisation Shares below.

Share buy-back and cancellation

During the period ended 30 June 2017, the Company purchased 3,500,000 (period ended 30 June 2016: 100,000) of its own Ordinary Shares at a consideration of £5,590,876 (period ended 30 June 2016: £120,480) under the share buy-back authority granted to the Company. These Ordinary Shares have been subsequently cancelled.

Following the share buy-back and redesignation of Realisation Shares, the Company has 85,864,981 Ordinary Shares in issue as of 30 June 2017 (as at 31 December 2016: 97,409,750).

At the AGM held on 19 July 2017, Shareholders granted the Company a general buy-back authority of up to 40% of the Company's issued share capital. In addition, on 24 March 2017, the Company appointed N+1 Singer Advisory LLP to manage an irrevocable programme during the closed period leading up to the publication of the Company’s full year results (the “Closed Period Buy-Back Programme”) to buy back Ordinary Shares within certain pre-set parameters. No shares were bought back under this programme.

On 4 August 2017, the Company reappointed N+1 Singer Advisory LLP to manage the Closed Period Buy-Back Programme to buy back Ordinary Shares within certain pre-set parameters during the closed period leading up to the date of publication of these Unaudited Half-Yearly results. Any Ordinary Shares purchased in the Closed Period Buy-Back Programme will count towards the Company's Ordinary Share buy-back authority of 40% of the Company's issued Ordinary Share capital, as approved at the Company's AGM.

Realisation Shares

							As at	As at
							30 June	31 December
							2017	2016
							(Unaudited)	(Audited)
Realisation Shares							£	£
Redesignated at no par value
8,044,769 (2016: Nil) Realisation Shares at no par value							-	-
							As at	As at
							30 June	31 December
							2017	2016
							(Unaudited)	(Audited)
							No. of Shares	No. of Shares
Redesignation of Realisation Shares							8,044,769	-
Total Realisation Shares at the end of the period/year							8,044,769	-
							As at	As at
							30 June	31 December
							2017	2016
							Share Capital	Share Capital
							(Unaudited)	(Audited)
							£	£
Redesignation of Realisation Shares							13,408,317	-
Realisation Shares at the end of the period/year							13,408,317	-

With effect from the Realisation Date, the assets in the Realisation Pool have been managed in accordance with an orderly realisation programme with the aim of making progressive returns of cash, as soon as practicable, to those Shareholders who have elected to redesignate their Ordinary Shares as Realisation Shares. Ordinary Shares held by Shareholders who did not submit a valid and complete election in accordance with the Articles during the Election Period have remained Ordinary Shares.

The Portfolio was split into two separate and distinct Pools, namely the Continuation Pool (comprising the assets attributable to the continuing Ordinary Shares) and the Realisation Pool (comprising the assets attributable to the Realisation Shares).

Unless it has already been determined that the Company will be wound up, every two years after the Realisation Date, the Directors will propose further realisation opportunities for Shareholders who have not previously elected to realise their Ordinary Shares using a similar mechanism used in the previously announced Realisation Opportunity.

On 2 June 2017, the Board determined that the return of cash will be made to Realisation Shareholders by periodic compulsory redemption of Realisation Shares (to be redeemed at the prevailing NAV per Realisation Share). See Note 9 for further details on subsequent events.

6. Related party transactions and material agreements

Related party transactions

1. Directors’ remuneration and expenses

The Directors of the Company are remunerated for their services at such a rate as the Directors determine provided that the aggregate amount of such fees does not exceed £150,000 per annum.

The annual Directors’ fees comprise £26,000 (period ended 30 June 2016: £26,000) payable to Mr Crighton, the Chairman, £22,000 (period ended 30 June 2016: £22,000) to Mr Coe as Chairman of the Audit Committee and £20,000 (period ended 30 June 2016: £20,000) to Mr King. Effective 1 July 2017, Mr Crighton is entitled to a fee of £30,000 per annum, whilst Mr Coe and Mr King are entitled to fees of £27,500 and £24,000 per annum, respectively.

During the period ended 30 June 2017, Directors’ fees of £35,000 (period ended 30 June 2016: £34,000) were charged to the Company and £18,000 (as at 30 June 2016: £17,000) remained payable at the period end. Mr Crighton and Mr Coe charged the Company £3,500 and £4,000, respectively, for the additional work undertaken during the period in relation to the Realisation Opportunity. These amounts remained payable at the period end.

1. Shares held by related parties

The Directors who held office at 30 June 2017 and up to the date of this Report held the following number of Ordinary Shares beneficially:

					As at 30 June 2017 (Unaudited)		As at 31 December 2016 (Audited)
					Ordinary	% of issued	Ordinary	% of issued
					Shares	share capital	Shares	share capital
Norman Crighton					20,000	0.02%	20,000	0.02%
Stephen Coe					10,000	0.01%	10,000	0.01%
Robert King					15,000	0.02%	15,000	0.02%

The Investment Manager is principally owned by Dr. Andrew Weiss and certain members of the Investment Manager’s senior management team.

As at 30 June 2017, Dr. Andrew Weiss and his immediate family members held an interest in 7,010,888 Ordinary Shares (as at 31 December 2016: 6,510,888) representing 8.17 per cent (as at 31 December 2016: 6.68 per cent) of the issued Ordinary Shares of the Company.

As at 30 June 2017, employees of the Investment Manager, their respective immediate family members or entities controlled by them or their immediate family members held an interest in 2,718,733 (as at 31 December 2016: 2,718,733) Ordinary Shares representing 3.17 per cent (as at 31 December 2016: 2.79 per cent) of the issued Ordinary Share capital of the Company.

Material agreements

1. Investment management fee

The Company’s Investment Manager is Weiss Asset Management LP. In consideration for the services provided by the Investment Manager under the Investment Management Agreement dated 8 May 2013, the Investment Manager is entitled to an annual management fee of 1.5% of the Company’s NAV accrued daily and payable within 14 days after each month end. The Investment Manager is also entitled to reimbursement of certain expenses incurred by it in connection with its duties.

The Investment Management Agreement will continue in force until terminated by the Investment Manager or the Company giving to the other party thereto not less than 12 months’ notice in writing, such notice not to expire prior to the fourth anniversary of Admission other than in limited circumstances.

During the period ended 30 June 2017, investment management fees and charges of £1,182,170 (period ended 30 June 2016: £963,790) were charged to the Company and £215,977 (as at 31 December 2016: £337,375) remained payable at the period end.

7. Fair value measurement

IFRS 13 ‘Fair Value Measurement’ requires the Company to establish a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy under IFRS 13 ‘Fair Value Measurement’ are set as follows:

• Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); and
• Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety.

If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following table presents the Company's financial assets and liabilities by level within the valuation hierarchy as of 30 June 2017:

								Total
								30 June
					Level 1	Level 2	Level 3	2017
								(Unaudited)
Assets					£	£	£	£
Cash and cash equivalents					19,294,383	-	-	19,294,383
Financial assets at fair value through profit or loss:
Korean preferred shares					151,887,731	-	-	151,887,731
Due from broker					-	120,447	-	120,447
Other receivables					464,656	23,644	-	488,300
					171,646,770	144,091	-	171,790,861
Liabilities
Other payables					102,224	348,284	-	450,508
					102,224	348,284	-	450,508

								Total
								31 December
					Level 1	Level 2	Level 3	2016
								(Audited)
Assets					£	£	£	£
Cash and cash equivalents					2,240,481	-	-	2,240,481
Financial assets at fair value through
profit or loss:
Korean preferred shares					136,175,733	-	-	136,175,733
Korean exchange-traded fund					5,780,864	-	-	5,780,864
Other receivables					3,533,674	2,656	-	3,536,330
Total assets					147,730,752	2,656	-	147,733,408
Liabilities
Due to broker					-	151,910	-	151,910
Other payables					777,408	429,391	-	1,206,799
					777,408	581,301	-	1,358,709

The Company recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between levels during the period end (for the period ended 30 June 2016: Nil).

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include South Korean preferred shares (for the year ended 31 December 2016, exchange-traded funds were also classified within Level 1).

The Company held no Level 2 or 3 investments as at or during the period ended 30 June 2017 (year ended 31 December 2016: Nil).

8. NAV reconciliation

The Company announces its NAV, based on bid value, to the LSE after each weekly and month end valuation point. The following is a reconciliation of the NAV per share attributable to redeemable participating preference Shareholders as presented in these Condensed Financial Statements, using IFRS to the NAV per share reported to the LSE:

					As at 30 June 2017 (Unaudited)		As at 31 December 2016 (Audited)
						NAV per		NAV per
						Participating		Participating
					NAV	Share	NAV	Share
					£	£	£	£
Continuation Pool
Net Asset Value reported to the LSE					156,478,069	1.8224	143,618,433	1.4744
Adjustment for dividend income					361,632	0.0042	2,756,266	0.0283
Net Assets Attributable to Shareholders per Financial Statements					156,839,701	1.8266	146,374,699	1.5027
Realisation Pool
Net Asset Value reported to the LSE					14,499,852	1.8024	-	-
Adjustment for dividend income					800	0.0001	-	-
Net Assets Attributable to Shareholders per Financial Statements					14,500,652	1.8025	-	-

The Continuation Pool’s published NAV per Share of £1.8224 (31 December 2016: £1.4744) is different from the accounting NAV per Share of £1.8266 (31 December 2016: £1.5027) due to the adjustment noted in the table above. The Realisation Pool’s published NAV per Share of £1.8024 (31 December 2016: Nil) is different from the accounting NAV per Share of £1.8025 (31 December 2016: Nil) due to the adjustment noted in the table above.

9. Subsequent events

These Condensed Financial Statements were approved for issuance by the Board on 4 September 2017. Subsequent events have been evaluated until this date.

On 7 July 2017, the Board approved the first compulsory redemption of Realisation Shares representing approximately 95 per cent of Realisation Shares in issue. The Redemption was effected pro-rata to holdings of Realisation Shares on the register at the close of business on 30 June 2017. Fractions of Realisation Shares were not redeemed and the number of Realisation Shares redeemed for each Realisation Shareholder was rounded down to the nearest whole number of Realisation Shares. Accordingly, 7,642,503 Realisation Shares were compulsorily redeemed at a redemption price of 180.24 pence per share. The redemption proceeds due in respect of the Redemption were paid by cheque sent to Realisation Shareholders on, or shortly after, 14 July 2017 (the “Redemption Date”). At the same time, Realisation Shareholders were advised of the balance of their Realisation Shares which had not been compulsorily redeemed. All Realisation Shares that were redeemed were cancelled with effect from the Redemption Date. Once redeemed, Realisation Shares were incapable of transfer. On 9 August 2017, the Board approved the second and final compulsory redemption of the remaining 402,266 Realisation Shares at a redemption price of 173.63 pence per share.

On 12 July 2017, the Company purchased 1,500,000 Ordinary Shares (£2,542,500) of the Company at a price of £1.6950 per share. These purchased shares were subsequently cancelled by the Company. Following this purchase and cancellation, the Company has 84,364,981 Ordinary Shares in issue. There are no shares held in treasury.

At the AGM held on 19 July 2017, Shareholders approved the authority of the Company to buy back up to 40% of the issued Ordinary Shares to facilitate the Company’s discount management. Any Ordinary Shares bought back may be cancelled or held in treasury.