Half Yearly Report

RNS Number : 1225P

Martin Currie Global Portfolio Tst

28 September 2011

 



Martin Currie Global Portfolio Trust plc

Half-yearly financial report

Six months to 31 July 2011

A copy of the Half Year report for the six months ended 31 July 2011 has been submitted to the National Storage Mechanism.  This will be available for viewing at http://www.hemscott.com/nsm.do

A copy of this half year report can be downloaded at www.martincurrieportfolio.com.

Financial Summary

Key data

	As at 31 July 2011	As at 31 January 2011
Net asset value per share*	137.7p	135.5p
FTSE World index	347.4	356.8
FTSE All-Share index	3,026.0	3,044.3
Share price	126.0p	125.0p
Discount*	8.5%	7.7%

Total returns+

	Six months ended 31 July 2011	Six months ended 31 July 2010
Net asset value per share*	2.5%	1.5%
Benchmark**	0.8%	4.0%
Share price	2.6%	2.4%

Income

	Six months ended 31 July 2011	Six months ended 31 July 2010
Revenue per share~	2.52p	1.48p
Dividend per share	1.00p	1.00p

Total expenses***

(as a percentage of shareholders' funds)

	Six months ended 31 July 2011	Six months ended 31 July 2010
Excluding performance fees	0.9%	1.0%
Performance Fees	-	-
Total	0.9%	1.0%

*Figures shown are inclusive of income as per AIC guidance.  The discount calculated, exclusive of income, was 6.8% (31 January 2011: 6.8%).

+The combined effect of any dividend paid, together with the rise or fall in the share price, net asset value or benchmark**.

** Prior to 31 May 2011, the company's benchmark was the FTSE All-Share index and the FTSE World index thereafter.

~ For details of the calculation, refer to note 2.

***Total expenses (as a percentage of shareholders' funds) are calculated using average net assets over the period.

Chairman's Statement

Welcome to the latest half-yearly report, covering the six months to 31 July 2011. As you will know, August has seen renewed turbulence in global bond and equity markets. In his manager's review Tom Walker reflects on the period and comments on the recent volatility in markets.

Strategy and name change

At the company's AGM on 23 May shareholders passed the resolution to complete the evolution of the company to a truly global equity investment trust, with 97% of votes cast in favour.  On behalf of the board, I would like to thank all shareholders who voted to endorse this move; we believe it will provide two principal benefits:

1.   Focusing on the best global investment opportunities - wherever they are based - should provide higher investment returns for shareholders;

2.   The new strategy will better diversify risk at a regional, country, sector and stock level.

Tom Walker, who has successfully managed the portfolio for the past 11 years, continues as investment manager. He comments on the transition to the new portfolio, which took place on 1 June. He also reviews the past six months and gives his outlook for global equity markets.

The company's benchmark has also changed from the FTSE All Share Index to the FTSE World Index. This index better reflects the true range of opportunities from which Tom is able to select the most attractive investments.

To reflect the new mandate we have renamed the company Martin Currie Global Portfolio Trust. Your board believes the new name more clearly reflects the company's investment remit.

This should help attract new investors, thereby creating more demand for the shares and benefitting existing shareholders.

5 year returns with dividends reinvested

Martin Currie Global Portfolio Share Price +33.8%

Martin Currie Global Portfolio NAV per share +29.3%

Benchmark +19.7%

Performance

The six month period to 31 July includes the transition to the new strategy and benchmark. Below we summarise the total return performance of the company against both the old and new benchmarks, together with a blended index reflecting the change of strategy on 1 June.

Martin Currie Global Portfolio

Share price total return 2.6%

Net asset value total return 2.5%

Benchmarks

FTSE All-Share Index 1.2%

FTSE World Index (1.1%)

Blended index 0.8%

These figures show modest outperformance of the old, new and blended indices in the period under review.

Dividends

The company will pay an interim dividend of 1.0p (2010: 1.0p) on 28 October 2011 to shareholders on the register as at 7 October 2011.

Looking ahead

The reporting period predates the market correction in August, which Tom Walker discusses in his review. Bond and equity markets are exceptionally volatile at present, and are likely to remain so for some time. Amid so much concern about sovereign debt, the relative financial strength of companies is in direct contrast to 2008. This gives us some comfort that, despite the difficult macroeconomic environment, company valuations will ultimately be supported by their strong balance sheets and positive cashflow. We believe that our strategy gives shareholders the best opportunity to benefit from the global leaders of tomorrow - wherever they are based.

Peter Berry

Chairman

28 September 2011

Manager's Review

In the first half of our financial year global stockmarket sentiment has been dominated by concerns about sovereign debt, slowing economic growth and inflation. The terrible events in Japan in March also created unease around supply chains in industries reliant on Japanese components. In this environment the continued earnings growth and strong cash flow of many global companies have been overshadowed by the nervousness created by the macroeconomic uncertainty. The fact that many global companies now have considerably stronger balance sheets than the countries in which they are listed has clearly been no comfort to equity investors, and as a result equity markets have made little progress.

As the Chairman explains in his statement, the company's benchmark index changed from the FTSE All Share index to the FTSE World index on 1 June. The composite benchmark reflects this change and our net asset value per share outperformed that index, rising by 2.5% in the six months to 31 July on a total return basis. It has been a far more volatile ride than these modest figures would suggest.

While our sector positioning has helped, our outperformance has stemmed largely from good stock selection, which is where we aim to add the most value for shareholders. PT Astra International and Apple were the stand-out performers and both remain among our largest investment positions.

PT Astra International is a large Indonesian conglomerate with strong positions in the automobile manufacturing and the construction sectors in Indonesia. That country's growing middle class population and rapid economic development create a strong growth environment for Astra's earnings.

Apple continues to capture dominant market share from its consumer products, most recently the iPad. We increased our holding in Apple in the period as we continue to see enormous growth potential, even though it is now the largest capitalised company in the world.

Also worthy of mention is F&C Private Equity Trust, where we have reduced our holding during the period. Although private equity investments suffered badly in the 2008-2009 recession, they have recovered strongly this year and we benefitted from this recovery. At 31 July F&C Private Equity represented just 2% of our assets, down from 10% six months ago.

At the sector level, we have benefitted from our limited exposure to banks, the weakest sector in the period under review, while we were overweight in healthcare, the strongest sector.

Inevitably, there have been negatives, notably our investment in Nintendo, the manufacturer of gaming hardware and software.  Their new Wii game console has been delayed and earnings expectations for 2011 have fallen to what we believe are trough levels.

Reflecting the change to a fully global mandate, I made some significant changes to the portfolio at the end of May. Notably I reduced our exposure to the UK from 56% at the end of January to 20% at the end of July. This enabled us to increase our international holdings, notably in the USA and in Asia ex-Japan and led to a reduction in our exposure to the energy, materials and financials sectors. These are sectors in which the FTSE All Share index has a significantly larger weight than global markets.

OUTLOOK

Markets fell sharply in early August as US politicians managed to extend their government's debt ceiling only at the eleventh hour. In Europe contagion from the so called PIIGS countries of Portugal, Italy, Ireland Greece and Spain reached further into the Eurozone club of 17. Adequate solutions to sovereign debt problems continue to evade Europe's leaders.

Our view for some time has been that there is no quick fix for the Eurozone's sovereign debt and America's fiscal deficit, ensuring we will have to live with economic uncertainty for some time. We expect interest rates to remain low in developed economies for several years and they may soon start falling in developing countries, once speculation and inflation slow down there. The economic recovery will be a long drawn out affair.

However, this backdrop is somewhat better than in 2008, because the banking system is better capitalised now. We also expect further monetary stimulus from the US Federal Reserve, should economic data indicate that we are dipping back into recession.

We see attractive valuations in many global companies. They have strong balance sheets and robust cash flow which leaves them well-placed to weather slower economic conditions. The outlook is not rosy and investors should expect modest investment returns from all asset classes for some time, although equities seem better placed than cash or bonds on a longer term investment view.

Tom Walker

28 September 2011

Risk and mitigation

The board closely monitors the risks of the company. The board carries out a risk workshop as part of its annual strategy meeting and has identified the following as key risks to the company. The board has also implemented specific mitigating measures to reduce the probability and impact of each risk to the greatest extent possible.

 

Loss of s1158-1159 status - In order to qualify as an investment trust, the company must comply with Sections 1158-1159 of the Corporation Taxes Act 2010.  Section 1158-1159 qualification criteria are continually monitored by Martin Currie and the results reported to the board.

Operational disruption at the manager's premises - Martin Currie has in place a full disaster recovery and business continuity plan which facilitates continued operation of the business should their premises be subject to operational disruption. The plan was last tested in December 2010 with successful results. The manager maintains a fully operational off-site disaster recovery centre for use by key staff during any disruption.

Regulatory, accounting/internal control breach - The company must comply with the Companies Act 2006 and the UKLA Rules. The board relies on the services of its company secretary and its professional advisers to ensure compliance. 

Loss of investment team or portfolio manager - Martin Currie takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel.

Failure to manage the discount - The board regularly discusses discount policy and has set parameters for the manager and the company's broker to follow.

Investment underperformance - The board manages the risk of investment underperformance by diversification of investments and through a set of investment restrictions and guidelines that are monitored and reported on by Martin Currie.  The board monitors the implementation and results of the investment process with the portfolio manager, who attends all board meetings, and reviews data that show statistical measures of the company's risk profile.

Gearing/Interest rate risk - From time to time the company finances its operations through bank borrowings. However, the board monitors such borrowings (gearing) closely and takes a prudent approach.  At the period end bank borrowings were nil. In accordance with the investment policy the limit on gearing is 20% of total assets.

Foreign exchange risk - A portion of the company's portfolio is held in currencies other than sterling and a high proportion of major UK listed companies receive a substantial percentage of their revenues from international operations, so in principle the board charges the manager to consider exchange risk in the normal course of market and stock analysis. From time to time the manager may, however, hedge overall exposure to a particular currency (for example the US dollar or Japanese yen) sometimes by borrowing in these currencies against portfolio exposure to them.

Counterparty risk - Martin Currie monitors counterparty relationships on behalf of the company. This process includes identifying major counterparties, mapping exposure and analysing the risks through the manager's risk, compliance, dealing, operations and middle office teams. The aim is to enable the board of the company to determine an appropriate level of counterparty risk exposure, and to diversify or mitigate this, as required. This process is subject to continual monitoring and review with any recommendations made to the board.

Major regulatory change - In response to the 2007/2008 financial crisis, the European Commission produced a draft Alternative Investment Fund Managers Directive. The directive was mainly aimed at hedge funds and private equity funds but investment trusts fall within its scope. Following intense lobbying, the worst outcomes suggested by the initial proposals have been avoided.  The board continues to monitor developments in the legislation to ensure the company can comply with any new requirements.

Liquidity test failure - In order to retain its place in the FTSE All-Share, the company must satisfy the liquidity test criteria set by the FTSE at each annual review. The liquidity of the company is monitored by the manager and the company's broker with a report being reviewed by the board regularly.

Directors' Responsibilities

In accordance with Chapter 4 of the Disclosure and Transparency Rules, and to the best of their knowledge, each director of Martin Currie Global Portfolio, confirms that the financial statements have been prepared in accordance with the UK accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in January 2009 and give a true and fair view of the assets, liabilities, financial position and net return of the company. Furthermore, each director certifies that the interim management report includes an indication of important events that have occurred during the first six months of the financial year, and their impact on the financial statements, together with a description of the principal risks and uncertainties that the company faces. In addition, each director of Martin Currie Global Portfolio confirms that there have been no related party transactions during the first six months of the financial year.

By order of the board

Peter Berry

Chairman

Edinburgh 28 September 2011

 

Portfolio Summary

Portfolio distribution

By Region	31 July 2011	31 January 2011
North America	42.9%	16.4%
United Kingdom	19.6%	56.2%
Global Emerging Markets	12.2%	3.9%
Europe (ex UK)	11.7%	8.2%
Developed Asia	7.3%	1.9%
Japan	4.4%	2.1%
Private Equity	1.9%	9.9%
Middle East	-	1.0%
Forward foreign currency contracts	-	0.4%
	100.0%	100.0%

By Sector (excluding cash and private equity)	31 July 2011 Company	31 July 2011 FTSE World
Industrials	14.8%	12.0%
Oil and gas	12.2%	10.7%
Technology	11.9%	10.0%
Financials	11.6%	20.4%
Consumer services	9.5%	9.3%
Healthcare	9.4%	8.3%
Basic materials	9.2%	8.6%
Consumer goods	8.4%	12.5%
Telecommunications	6.5%	4.4%
Utilities	6.5%	3.8%

By Asset Class (including cash and borrowings)	31 July 2011	31 January 2011
Equities	98.3%	99.0%
Cash	1.7%	0.6%
Forward foreign currency contracts	0.0%	0.4%
	100.0%	100.0%

Largest 10 Holdings	31 July 2011 Market Value £000	31 July 2011 % of total portfolio	31 January 2011 Market Value £000	31 January 2011 % of total portfolio
Apple	5,927	4.1	2,308	1.6
McDonalds	4,798	3.3	1,322	0.9
Royal Dutch Shell	4,711	3.3	5,210	3.6
Phillip Morris International	4,570	3.2	-	-
ConocoPhillips	4,490	3.1	1,946	1.3
P.T. Astra International	4,120	2.9	1,888	1.3
United Technologies	3,619	2.5	-	-
Microsoft	3,339	2.3	-	-
Woolworths	3,062	2.1	-	-
Sempra Energy	2,798	2.0	-	-

Unaudited Income Statement

		Six months to 31 July 2011			Six months to 31 July 2010
	Note	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Net gains/(losses) on investments	5	-	2,505	2,505	-	(416)	(416)
Net currency (losses)/gains	8	-	(320)	(320)	-	82	82
Income	3	3,261	-	3,261	2,177	311	2,488
Investment management fee		(122)	(244)	(366)	(117)	(234)	(351)
Other expenses		(272)	-	(272)	(305)	-	(305)
Net return on ordinary activities before taxation		2,867	1,941	4,808	1,755	(257)	1,498
Taxation on ordinary activities	4	(161)	-	(161)	(70)	-	(70)
Return attributable to shareholders		2,706	1,941	4,647	1,685	(257)	1,428
Returns per ordinary share	2	2.5	1.8	4.3	1.5	(0.2)	1.3

Unaudited income statement cont.

		(Audited) Year to 31 January 2011
	Note	Revenue £000	Capital £000	Total £000
Net gains/(losses) on investments	5	-	15,462	15,462
Net currency (losses)/gains	8	-	72	72
Income	3	3,501	715	4,216
Investment management fee		(238)	(476)	(714)
Other expenses		(525)	-	(525)
Net return on ordinary activities before taxation		2,738	15,773	18,511
Taxation on ordinary activities	4	(104)	-	(104)
Return attributable to shareholders		2,634	15,773	18,407
Returns per ordinary share	2	2.3	14.0	16.4

The total columns of this statement are the profit and loss accounts of the company.

The revenue and capital items are presented in accordance with the Association of Investment Companies (AIC) Statement of Recommended Practice.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the six months.

The notes form part of these financial statements.

A Statement of total recognised gains and losses is not required as all gains and losses of the company have been reflected in the above statement.

Unaudited Balance Sheet

		As at 31 July 2011		As at 31 July 2010		(Audited) as at 31 January 2011
	Note	£000	£000	£000	£000	£000	£000
Fixed assets
Investments at fair value through profit or loss
Listed on the London Stock Exchange			30,864		75,252		96,920
Listed on exchanges abroad			112,523		45,833		49,340
	5		143,387		121,085		146,260
Forward foreign currency contracts			-		-		615
			143,387		121,085		146,875
Current Assets
Debtors and prepayments	6	461		291		243
Cash at bank		2,561		16,832		890
		3,022		17,123		1,133
Creditors
Amounts falling due within one year	7	(349)		(1,834)		(277)
Net current assets			2,673		15,289		856
Total assets less current liabilities			146,060		136,374		147,731
Capital and Reserves
Called-up share capital		5,304		5,636		5,449
Special reserve		118,413		126,566		122,062
Capital redemption reserve		10,713		10,381		10,568
Capital reserve		4,942		(13,029)		3,001
Revenue reserve		6,688		6,820		6,651
Total Shareholders' Funds			146,060		136,374		147,731
Net asset value per ordinary share	2		137.7p		121.0p		135.5p

Unaudited Reconciliation of Movements in Shareholders' Funds

Reconciliation of movements in shareholders' funds for the six months to 31 July 2011	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve £000	Capital reserve £000	Revenue Reserve £000	Total £000
At 31 January 2011	5,449	10,568	122,062	3,001	6,651	147,731
Ordinary shares bought back during the period	(145)	145	(3,649)	-	-	(3,649)
Gains on realisation of investments at fair value	-	-	-	16,565	-	16,565
Gains on realisation of forward foreign exchange contracts	-	-	-	610	-	610
Movement in currency gains	-	-	-	(320)	-	(320)
Movement in fair value losses	-	-	-	(14,670)	-	(14,670)
Capitalised expenses	-	-	-	(244)	-	(244)
Net revenue	-	-	-	-	2,709	2,706
Dividends Paid	-	-	-	-	(2,669)	(2,669)
At 31 July 2011	5,304	10,713	118,413	4,942	6,688	146,060

Reconciliation of movements in shareholders' funds for the six months to 31 July 2010	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve £000	Capital reserve £000	Revenue Reserve £000	Total £000
At 31 January 2010	5,842	10,175	131,494	(12,772)	7,977	142,716
Ordinary shares bought back during the period	(206)	206	(4,928)	-	-	(4,928)
Gains on realisation of investments at fair value	-	-	-	4,663	-	4,663
Movement in currency gains	-	-	-	82	-	82
Movement in fair value losses	-	-	-	(5,079)	-	(5,079)
Capitalised expenses	-	-	-	(234)	-	(234)
Capital dividends received	-	-	-	311	-	311
Net revenue	-	-	-	-	1,685	1,685
Dividends paid	-	-	-	-	(2,842)	(2,842)
At 31 July 2010	5,636	10,381	126,566	(13,029)	6,820	136,374

Reconciliation of movements in shareholders' funds for the year to 31 January 2011	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve £000	Capital reserve £000	Revenue Reserve £000	Total £000
At 31 January 2010	5,842	10,175	131,494	(12,772)	7,977	142,716
Ordinary shares bought back during the year	(393)	393	(9,432)	-	-	(9,432)
Gains on realisation of investments at fair value	-	-	-	6,954	-	6,954
Loss on realisation of forward foreign exchange contracts	-	-	-	(56)	-	(56)
Movement in currency gains	-	-	-	72	-	72
Movement in fair value gains	-	-	-	7,949	-	7,949
Movement in fair value of forward foreign exchange contracts	-	-	-	615	-	615
Capitalised expenses	-	-	-	(476)	-	(476)
Capital dividends received	-	-	-	715	-	715
Net revenue	-	-	-	-	2,634	2,634
Dividends Paid	-	-	-	-	(3,960)	(3,960)
At 31 January 2011	5,449	10,568	122,062	3,001	6,651	147,731

Unaudited Statement of Cash Flow

	Note	Six months to 31 July 2011		Six months to 31 July 2010		(Audited) Year to 31 January 2011
		£000	£000	£000	£000	£000	£000
Net cash inflow from operating activities	8		2,197		1,607		2,839
Capital expenditure and financial investment
Payment to acquire investments		(86,096)		(9,240)		(36,082)
Proceeds from sale of investments		90,939		24,660		40,042
Net gain/(loss) from forward foreign currency exchange contracts		1,225		-		(56)
Net cash inflow from capital expenditure and financial investment			6,068		15,420		3,904
Equity dividends paid			(2,669)		(2,842)		(3,960)
Net cash inflow before financing			5,596		14,185		2,783
Financing
Repurchase of ordinary share capital			(3,605)		(4,902)		(9,432)
Increase/(decrease) in cash			1,991		9,283		(6,649)
Reconciliation of net cash flow to movements in net cash
Increase/(decrease) in cash			1,991		9,283		(6,649)
Foreign exchange movements			(320)		82		72
Movement in net cash in the period			1,671		9,365		(6,577)
Opening net cash			890		7,467		7,467
Closing net cash			2,561		16,832		890

 

Notes to the Financial Statements

1 Accounting policies

a) Basis of preparation - The financial statements have been prepared in accordance with applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in January 2009. They have also been prepared on the assumption that approval as an investment trust will continue to be granted.

The company continues to adopt the going concern basis in the preparation of the financial statements.

b) Income from investments (other than special dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted, when the company's right to receive payment is established.  Franked investment income is stated net of the relevant tax credit. Other income includes any taxes deducted at source. Special dividends are credited to capital or revenue, according to the circumstances. Scrip dividends are treated as unfranked investment income; any excess in value of the shares received over the amount of the cash dividend is recognised as a capital item in the income statement.

c) Interest receivable and payable, management expenses and other expenses are treated on an accruals basis.

d) The management fee and finance costs in relation to debt are recognised two-thirds as a capital item and one-third as a revenue item in the income statement in accordance with the board's expected long-term split of returns in the form of capital gains and income, respectively. The performance fee is recognised 100% as a capital item in the income statement as it relates entirely to the capital performance of the company. All expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case, they are added to the cost of the investment or deducted from the sale proceeds.

e) Investments - Investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured as fair value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices or closing prices for SETS stocks sourced from The London Stock Exchange. SETS is the London Stock Exchange's electronic trading service for UK blue chip securities including all the FTSE 100 constituents and the most liquid FTSE 250 along with some other securities. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the income statement and are ultimately recognised in the unrealised reserve.

The valuation of forward currency contracts are included on the balance sheet. Period changes to these valuations are recognised as unrealised gains and losses in the income statement.

In accordance with FRS29, all investments have been categorised as Level 1 - quoted in an active market.

f) Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the income statements.

g) Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the capital reserve or the revenue account depending on whether the gain or loss is of a capital or revenue nature.

h) All financial assets and liabilities are recognised in the financial statements.

i) Dividend payable - Interim and final dividends are recognised in the period in which they are paid.

j) Capital reserve - Gains or losses on realisation of investments and changes in fair values of investments are transferred to the capital reserve. Any changes in fair values of investments that are not readily convertible to cash are treated as unrealised gains or losses within the capital reserve. The capital element of the management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve.

Special distributable reserve - This reserve was created through the cancellation of the share premium account and is used to fund share buybacks.  This reserve is distributable.

Capital redemption reserve - This reserve is created when the company buys back its own shares which reduces the share capital. This reserve is not distributable but can be used to fund bonus shares issued.

k) Deferred taxation - Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the balance sheet date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying temporary differences can be deducted. Timing differences are differences arising between the company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods.

Due to the company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

2. 

	Six months to 31 July 2011	Six months to 31 July 2010	Year to 31 January 2011
Returns and net asset value
The return and net asset value per ordinary share are calculated with reference to the following figures:
Revenue return
Revenue return attributable to ordinary shareholders	£2,706,000	£1,685,000	£2,634,000
Average number of shares in issue during period	107,462,636	114,152,403	112,515,991
Return per ordinary share	2.52p	1.48p	2.34p
Capital return
Capital return attributable to ordinary shareholders	£1,941,000	(£257,000)	£15,773,000
Average number of shares in issue during period	107,462,636	114,152,403	112,515,991
Return per ordinary share	1.81p	(0.23p)	14.02p
Total return
Total return per ordinary shares	4.33p	1.25p	16.36p
	As at 31 July 2011	As at 31 July 2010	As at 31 January 2011
Net asset value per share
Net assets attributable to ordinary shareholders	£146,060,000	£136,374,000	£147,731,000
Number of shares in issue at the period end	106,082,413	112,715,590	108,989,411
Net asset value per share	137.7p	121.0p	135.5p

During the six months to 31 July 2011 2,906,998 shares were bought back at a cost of £3,649,000.  Note 10 shows shares bought back since 31 July 2011.

3. 

	Six months to 31 July 2011 £000	Six months to 31 July 2010 £000	Year to 31 January 2011 £000
Income from investments
From listed investments
UK equities	1,789	1,641	2,594
International equities	1,468	512	856
Other income
Interest on deposits	4	24	29
Underwriting commission	-	-	22
	3,261	2,177	3,501

During the year ended 31 January 2011, the company received a capital distribution of £311,000 and £404,000 from F&C Private Equity Trust and £41,000 from ABB Limited.  There were no capital distributions received during the six months to 31 July 2011.

4.

	Six months to 31 July 2011			Six months to 31 July 2010			Year to 31 January 2011
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Taxation on ordinary activities
Foreign Withholding Tax	161	-	161	70	-	70	104	-	104

5.

	Six months to 31 July 2011 £000	Six months to 31 July 2010 £000	Year to 31 January 2011 £000
Investments
Opening valuation	146,260	135,502	135,502
Opening unrealised gains	(25,692)	(17,743)	(17,743)
Opening cost	120,568	117,759	117,759
Purchases at cost	86,096	10,659	35,972
Disposal proceeds	(90,864)	(24,660)	(40,117)
Less: net profit on disposal of investments	16,565	4,663	6,954
Disposal at cost	(74,299)	(19,997)	(33,163)
Closing cost	132,365	108,421	120,568
Investment holding gains	11,022	12,664	25,692
Valuation at end of period	143,387	121,085	146,260
	£000	£000	£000
Net profit on disposal of investments	16,565	4,663	6,954
Net (loss)/profit on revaluation of investments	(14,670)	(5,079)	7,949
Net gain/(loss) on realisation of forward foreign exchange contracts	1,225	-	(56)
Net (loss)/gain on revaluation of forward foreign exchange contracts	(615)	-	615
	2,505	(416)	15,462

The transaction costs in acquiring investments during the period were £82,000 (2010: £49,000).  For disposals, transaction costs were £41,000 (2010: £19,000).

During the year to 31 January 2011, there was a write down in the book costs of F&C Private Equity Trust A shares of £687,000 and ABB Limited of £33,000 which were reflected in the realised net profit of £6,954,000.  These were as a result of capital repayments.

6. 

	As at 31 July 2011 £000	As at 31 July 2010 £000	As at 31 January 2011 £000
Debtors: amounts falling due within one year
Dividends receivable	380	184	98
Amount due from brokers	-	-	75
Taxation recoverable	44	39	29
Other debtors	37	68	41
	461	291	243

7.

	As at 31 July 2011 £000	As at 31 July 2010 £000	As at 31 January 2011 £000
Creditors: amounts falling due within one year
Due to brokers	-	1,529	-
Due to brokers for repurchase of ordinary shares	44	26	-
Due to Martin Currie	197	185	200
Other creditors	108	94	77
	349	1,834	277

8. 

	Six months to 31 July 2011 £000	Six months to 31 July 2010 £000	Year to 31 January 2011 £000
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return on ordinary activities before finance costs and taxation	4,808	1,498	18,511
Adjustments for:
(Gains)/losses on investments	(2,505)	416	(15,462)
Effect of foreign exchange rates	320	(82)	(72)
Increase in dividends receivable and other debtors	(278)	(163)	(50)
Increase in other creditors and other accruals	28	11	9
Overseas withholding tax suffered	(176)	(73)	(97)
Net cash inflow from operating activities	2,197	1,607	2,839

9 Interim report

The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in s434 - 436 of the Companies Act 2006. The financial information for the six months ended 31 July 2011 has not been audited.

The information for the year ended 31 January 2011 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under s498 (2), (3) or (4) of the Companies Act 2006.

10 Post balance sheet events

Since the period end a further 167,292 ordinary shares of 5p each have been bought back for a consideration of £191,000.

 

END

 

 

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