Final Results

RNS Number : 4027L

Pacific Horizon Investment Tst PLC

04 September 2012

 



Press Release

Pacific Horizon Investment Trust PLC

Results for the year to 31 July 2012

Chairman's statement

Performance

In the year to 31 July 2012 the Company's net asset value per share declined 3.7% compared to a decline in the comparative index, MSCI All Country Asia ex Japan (in sterling terms), of 10.2% over the same period. The share price declined by 9.4% and the discount widened from 7.6% to 13.1%. The Managers' Review contains a detailed explanation of performance along with thoughts on markets.

Gearing was not used during the year and, at the year end, cash and equivalents were equal to 1.6% of shareholders' funds. Earnings per share were largely unchanged year on year at 1.97p (1.98p for the previous year). The Board is recommending that a dividend of 1.50p should be paid, the same as last year.

The Board reviews portfolio performance at each Board meeting and the Company undertakes an annual strategy review. The Directors are satisfied that the Managers' investment process, philosophy and investment style, with a focus on stock selection rather than top down macro view on sectors and countries, is a sensible strategic approach for investing in the region. Having spoken with our major shareholders last year, the Board believes that this approach is endorsed by the majority of investors.

Share Buy Backs and Discount

During the year the Company bought back a total of 1,880,000 ordinary shares, representing 2.4% of the issued share capital as at 31 July 2011, at a cost of £2,768,000. At the forthcoming AGM we shall be asking shareholders to renew the mandate to repurchase up to 14.99% of the outstanding shares. The Board believes that it would be in the overall best interest of shareholders to commit to buying back shares in an opportunistic fashion rather than to establish and implement a published formula for redemptions.

Management Fee

As of 1 August 2012, the management fee paid by the Company has been amended from 1% of total assets less current liabilities, calculated on a quarterly basis, to 1% of net assets of the Company attributable to its shareholders, calculated on a quarterly basis. This change means that borrowings longer than one year in duration can be drawn without a management fee being levied against them and is therefore of benefit to shareholders.

Annual General Meeting

This year's AGM will take place on 31 October 2012 at the offices of Baillie Gifford & Co in Edinburgh at 10.45am. The Manager will make a presentation and, along with the Board, will answer any questions from shareholders. I hope to see as many of you as possible there.

Chairman's statement (ctd)

Outlook

The slowing growth rate of the Chinese economy has been at the forefront of investors' minds over the last year. The Chinese leadership is well aware of this and has made moves to offset the effects of this economic deceleration. Notwithstanding these interventions, the Chinese stock market has been a poor performer over the period. At current levels, however, stock valuations appear attractive. In China, and elsewhere in the region, the export market has been hurt by the problems in the Eurozone, but there is a gradual shift from export-led growth to taking advantage of domestic expansion supported by increasing per capita wealth. The Asian region has demonstrated its resilience and is in a far better position than many Western economies. There are many attractive investment propositions in Asia, providing opportunities to buy into strongly financed companies, with sound management, at attractive valuations.

Jean Matterson

Chairman

3 September 2012

Past performance is not a guide to future performance.

Managers' review

Investment Environment

We are encouraged that economic performance across the region remains robust. Despite this, stock market performance over the year was disappointing with the MSCI All Country Asia ex Japan Index falling 10.2% in sterling terms in the twelve months to 31 July 2012. Much of the weakness in performance can be attributed to non-Asian issues although investors also became increasingly concerned by the rate and composition of Chinese economic growth, particularly towards the second half of the Company's financial year. 

Outside the region, developed economies continue to struggle as a result of the consequences of the global financial crisis, concerns regarding the future of Europe, and from the requirements of retrenchment necessary to restore financial equilibrium. Debt levels are high in aggregate and consequent falls in spending by governments and consumers have served to reduce global economic activity. For our investment universe the direct impact of consumer and government retrenchment has resulted in reduced demand for the products of some exporters and less availability of financing for those companies using some of the hardest hit banks. Whilst we believe that the portfolio is relatively well protected from these economic headwinds, investor sentiment remains negative and the desire for traditionally 'risky assets' has decreased.

Another reason for investor angst is whether or not the Chinese economy will suffer a sharp slowdown in growth. The general concern is that, as the Chinese economy successfully reduces its dependence on an investment-led growth model, the reduction in spending will be too severe to offset, at a time when China's leading export markets are also suffering. Although demand has yet to soften significantly, commodity companies (a minimal exposure for the Company) have performed poorly. We are more concerned by the additional effects that such a change in growth structure may present and consequently have minimal exposure to high end retailers and the property market.

We view the structural change in Chinese growth as the natural transition of an expanding economy. Whilst investment demand will necessarily fall, the long term aim for China is to foster a more sustainable development path. We would also highlight the willingness and ability of the Chinese leadership to stimulate economic growth and activity, should it be needed. Not only does the state remain in rude health financially, but with a change in leadership due later this year it is highly unlikely that a stumbling economy is the legacy the current leaders wish to pass on. There have already been reserve rate cuts for the banking system, careful easing of property measures and interest rate cuts, and Premier Wen has provided public assurances on more than one occasion. This is in addition to the continued investment in the seven appointed strategic industries and financial support being given to those companies struggling at the smaller end of the scale.

For many of the countries in which we invest it has been an interesting year on the political front. Elections in Korea and Taiwan were won by the incumbent parties which should mean continued progress on reform and will allow closer links with mainland China for the latter. Here we have already observed positive announcements regarding the relaxation of a number of cross-ownership rules and increased tourism ties, with expectations for more to follow. In China, we are still some time away from finding out who will make up the Politburo Standing Committee from the current top echelons of the Chinese Communist Party. Bo Xilai, the Chongqing party leader and previously a leading contender for a seat, has been unceremoniously deposed. He has lost his Chongqing seat and with it any chance of becoming one of China's next leaders. Whilst the detail is obscure it is clear that one of the more controversial contenders has been sidelined at an early stage. China is governed through a collective leadership, an important and unchanging principle.

Hong Kong has a new Chief Executive with a more populist manifesto than most of its business elite were hoping for. Coincident with his election, a fascinating legal case has been started against the owners of one of Hong Kong's largest property companies, Sun Hung Kai Properties. Although we are not investors in this company, we note that the traditional tycoon dominance of this Special Administrative Region may be under threat. Elsewhere, in India the ruling Congress alliance fared poorly in state elections.

There are two areas that present us with challenges: the investor euphoria surrounding some of the smaller emerging ASEAN markets, and the lack of suitable opportunities for investment in India.

Managers' review (ctd)

In ASEAN markets, investor optimism is particularly noticeable in Indonesia and the Philippines where, despite a lack of real reform in recent years, investors have bid prices of both debt and equity markets to elevated levels. Whilst the quality of some of the companies within these markets is undeniable, we are wary of the sustainability of the macroeconomic environment which is currently booming due to lax central bank and government policies. During the period our portfolio weighting in Indonesia was reduced as we have sold holdings in two companies and our Philippine exposure has increased only due to strong results and a modest rerating of Security Bank. These two markets comprise only 5% of the Company's total assets.

Since adding India to our investment universe in 2006, we have struggled to find many companies with valuations that compare favourably to those available elsewhere. Despite the many positive factors, such as the demographic profile of the country and the high barriers to entry in many industries, the government has not delivered any meaningful reforms, resulting in 'political paralysis' being the catch phrase of the moment. Our exposure to India over the period has fallen, reflecting this lack of suitable opportunities.

Portfolio Review

Much of the Company's outperformance relative to the comparative index is as a result of good individual stock selection rather than asset allocation decisions. With our stock picking style, themes are generally difficult to identify although a number of technology companies have been strong performers. These include Samsung Electronics, an electronics company and the single largest portfolio holding, ASM Pacific Technology, a semiconductor equipment manufacturer, Phison Electronics, a Taiwanese semiconductor products business, and Alibaba.com, an internet business which was subject to a privatisation offer during the period at a healthy premium. Other strong contributors to performance over the period have included top ten holdings Kunlun Energy, a Chinese energy business, Hyundai Glovis, a Korean logistics company and also Security Bank, a small Philippine bank, and Orion Corp, a Korean consumer conglomerate.

The continued focus on Hong Kong as a beneficiary of Renminbi liberalisation is likely to be positive for one of our new holdings, Bank of China (Hong Kong) Limited, given its links to the mainland via its parent company (Bank of China). This bank is now a top ten holding for the Company. We have also taken holdings in Airtac International Group and Hiwin Technologies, both Taiwanese automation companies, as excellent ways to benefit from increased factory automation in China. Tencent Holdings, a Chinese social media platform, has been added to the portfolio given the opportunity to increase monetisation across its range of products and NHN, a Korean internet business, has also been purchased given the long term opportunities available to the business. The other new buys are SFA Engineering, a factory automation and logistics systems manufacturer, which should benefit from continued high investment in next generation technology by the leading semiconductor companies, and Niko Resources, an oil and gas producer with exploration potential in Indonesia.

With concerns over continued investment overspend in China, it is perhaps unsurprising that some of the worst performers over the period are those companies most exposed to this area. China National Building Material, a Chinese building materials manufacturer, Angang Steel, a leading steel manufacturer and Dongfang Electric, a leading power equipment business were all amongst the worst contributors to performance. Stock specific issues have also affected some holdings. Niko Resources, an oil and gas producer, fared badly as reserves were revised down significantly in the Indian part of their business and shares in Ports Design, a fashion retailer, fell sharply following a lengthy suspension which led to additional disclosure of related party transactions. We have also suffered from the poor performance of two companies, Real Gold Mining and Focus Media, due to allegations of fraudulent activity. This is a subject that has come into greater focus in recent months, driven primarily by research companies targeting US-listed Chinese businesses. Whilst determining the accuracy of the claims is often impossible, the implication of fraud is often enough for share prices to react sharply. Both of these holdings have been sold during the period, although in Focus Media's case the sale was for reasons not relating to the allegations.

Managers' review (ctd)

With the Company's long term investment horizon it should be unsurprising that transactions during the year have been modest. Our turnover level is currently low relative to historical activity. During the year we made 7 new purchases and 17 complete sales, maintaining a low degree of overlap with the comparative index. There has been a conscious decision to reduce the number of holdings (from 79 to 69) to ensure a manageable portfolio whilst not compromising the benefits of diversification. Complete sales have focused on those businesses where we feel the original investment case has been undermined, either through management issues or a change in the investment fundamentals.

The overall shape of the portfolio was little changed over the past year. Our largest absolute positions remain in Hong Kong and China, and Korea, with the Philippines and Vietnam being the smallest. The weighting in Taiwan has increased the most following new purchases of the two automation companies and also good performance from a number of the technology companies held there. Indonesia has reduced the most as we have sold PT Telekomunikasi, a telecommunications business, and Perusahaan Gas, a gas utility. By sector, information technology and financials are the largest in absolute terms, accounting for 28.5% and 28.1% of the Company respectively. Over the year the largest increase has been to the technology weighting due both to new purchases of Tencent Holdings and NHN and good performances by companies already held. The portfolio continues to be focussed on domestic demand and growth companies; this explains our low exposure to sectors such as materials and utilities.

Income statement (unaudited)

The following is the unaudited preliminary statement for the year to 31 July 2012 which was approved by the Board on 3 September 2012. The Directors of Pacific Horizon Investment Trust PLC are recommending to the Annual General Meeting of the Company to be held on 31 October 2012 the payment of a final dividend of 1.50p net (31 July 2011 - 1.50p net) per ordinary share for the year ended 31 July 2012.

	For the year ended 31 July 2012			For the year ended 31 July 2011 (audited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
(Losses)/gains on investments	-	(5,919)	(5,919)	-	11,172	11,172
Currency gains/(losses)	-	89	89	-	(76)	(76)
Income (note 2)	3,234	-	3,234	3,441	-	3,441
Investment management fee (note 3)	(1,282)	-	(1,282)	(1,394)	-	(1,394)
Other administrative expenses	(302)	-	(302)	(307)	-	(307)
Net return on ordinary activities before taxation	1,650	(5,830)	(4,180)	1,740	11,096	12,836
Tax on ordinary activities	(159)	-	(159)	(194)	-	(194)
Net return on ordinary activities after taxation	1,491	(5,830)	(4,339)	1,546	11,096	12,642
Net return per ordinary share (note 4)	1.97p	(7.71p)	(5.74p)	1.98p	14.23p	16.21p

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in this statement derive from continuing operations. No operations were acquired or discontinued during the year.

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.

Balance sheet (unaudited)

	At 31 July 2012		At 31 July 2011 (audited)
	£'000	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		126,995		135,885
Current assets
Debtors	409		612
Cash and short term deposits	2,061		1,449
	2,470		2,061
Creditors
Amounts falling due within one year	(368)		(596)
Net current assets		2,102		1,465
Total net asset		129,097		137,350
Capital and reserves
Called up share capital		7,505		7,693
Share premium		3,166		3,166
Special distributable reserve		8,252		11,020
Capital redemption reserve		18,288		18,100
Capital reserve		86,391		92,221
Revenue reserve		5,495		5,150
Shareholders' funds		129,097		137,350
Net asset value per ordinary share		172.01p		178.53p
Ordinary shares in issue	75,052,002		76,932,002

Reconciliation of movements in shareholders' funds (unaudited)

For the year ended 31 July 2012

	Called up share capital £'000	Share premium £'000	Special distributable reserve £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 August 2011	7,693	3,166	11,020	18,100	92,221	5,150	137,350
Net return on ordinary activities after taxation	-	-	-	-	(5,830)	1,491	(4,339)
Shares purchased for cancellation (note 7)	(188)	-	(2,768)	188	-	-	(2,768)
Dividends paid during the year (note 5)	-	-	-	-	-	(1,146)	(1,146)
Shareholders' funds at 31 July 2012	7,505	3,166	8,252	18,288	86,391	5,495	129,097

For the year ended 31 July 2011 (audited)

	Called up share capital £'000	Share premium £'000	Special distributable reserve £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 August 2010	7,829	3,166	13,233	17,964	81,125	4,622	127,939
Net return on ordinary activities after taxation	-	-	-	-	11,096	1,546	12,642
Shares purchased for cancellation (note 7)	(136)	-	(2,213)	136	-	-	(2,213)
Dividends paid during the year (note 5)	-	-	-	-	-	(1,018)	(1,018)
Shareholders' funds at 31 July 2011	7,693	3,166	11,020	18,100	92,221	5,150	137,350

*    The capital reserve balance at 31 July 2012 includes investment holding gains on fixed asset investments of £36,971,000

      (2011 -£37,635,000).

Cash flow statement (unaudited)

	For the year ended 31 July 2012		For the year ended 31 July 2011 (audited)
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities		1,547		1,560
Financial investment
Acquisitions of investments	(18,009)		(38,027)
Disposals of investments	20,899		38,345
Realised currency gain/(loss)	89		(76)
Net cash inflow from financial investment		2,979		242
Equity dividend paid (note 5)		(1,146)		(1,018)
Net cash inflow before financing		3,380		784
Financing
Shares bought back (note 7)	(2,768)		(2,213)
Net cash outflow from financing		(2,768)		(2,213)
Increase/(decrease) in cash		612		(1,429)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash in the year		612		(1,429)
Movement in net funds in the year		612		(1,429)
Net funds at 1 August		1,449		2,878
Net funds at 31 July		2,061		1,449
Reconciliation of net return before taxation to net cash inflow from operating activities
Net return on ordinary activities before taxation		(4,180)		12,836
Losses/(gains) on investments		5,919		(11,172)
Currency (gains)/losses		(89)		76
Decrease/(increase) in accrued income		319		(225)
Decrease/(increase) in debtors		6		(1)
(Decrease)/increase in creditors		(228)		217
Overseas tax suffered		(200)		(171)
Net cash inflow from operating activities		1,547		1,560

Thirty largest equity holdings at 31 July 2012 (unaudited)

Name	Country	Business	Value £'000	% of total assets ‡
Samsung Electronics	Korea	Electronics company	9,015	7.0
Taiwan Semiconductor Manufacturing	Taiwan	Semiconductor manufacturer	5,262	4.1
Kunlun Energy Company	HK/China	Energy business	4,778	3.7
Hyundai Mobis	Korea	Automotive parts producer	3,821	3.0
CNOOC	HK/China	Oil and gas exploration and production	3,491	2.7
Baidu	HK/China	Internet search provider	3,384	2.6
Hyundai Glovis	Korea	Logistics company	3,185	2.5
Ping An Insurance	HK/China	Life insurance provider	3,133	2.4
Bank of China (Hong Kong) Limited	HK/China	Commercial bank	3,026	2.3
ASM Pacific Technology	HK/China	Semiconductor equipment manufacturer	2,974	2.3
China Mobile	HK/China	Wireless telecommunications provider	2,903	2.2
Hon Hai Precision Industries	Taiwan	Electronic manufacturing services company	2,798	2.2
Li & Fung	HK/China	Supply chain management	2,726	2.1
Security Bank	Philippines	Commercial bank	2,682	2.1
China Life Insurance (Taiwan)	Taiwan	Life insurance provider	2,547	2.0
Singapore Exchange	Singapore	Stock exchange	2,546	2.0
Tencent Holdings	HK/China	Internet business	2,517	1.9
Kuala Lumpur Kepong	Malaysia	Palm oil producer and refiner	2,489	1.9
Hyundai Marine and Fire Insurance	Korea	Non-life insurance provider	2,405	1.9
Sembcorp Marine	Singapore	Shipbuilder	2,266	1.8
MediaTek	Taiwan	Integrated circuit design house	2,164	1.7
Orion	Korea	Consumer conglomerate	2,160	1.7
Samsung Fire & Marine	Korea	Non-life insurance provider	2,077	1.6
CapitaMall Trust	Singapore	Real estate investment trust	1,874	1.5
Ports Design	HK/China	Apparel retailer	1,851	1.4
China Petroleum & Chemical Corporation	HK/China	Integrated oil and gas producer	1,720	1.3
Ascendas Real Estate	Singapore	Real estate investment trust	1,690	1.3
Siam Commercial Bank	Thailand	Commercial bank	1,685	1.3
Phison Electronics	Taiwan	Semiconductor products	1,665	1.3
Bangkok Bank	Thailand	Commercial bank	1,607	1.2
			86,441	67.0

HK/China denotes Hong Kong and China

All stocks are listed overseas.

‡ Total assets less current liabilities.

Distribution of assets (unaudited)

		At 31 July 2012 %	At 31 July 2011 %
Equities:	Hong Kong and China	33.3	34.9
	Korea	20.7	21.0
	Taiwan	15.4	13.4
	Singapore	9.8	10.0
	Malaysia	5.2	5.0
	Thailand	3.8	3.2
	India	3.3	4.3
	Indonesia	2.9	4.8
	Philippines	2.1	1.2
	Vietnam	1.9	1.1
Total equities		98.4	98.9
Net current assets		1.6	1.1
Total assets at fair value ‡		100.0	100.0

‡      Total assets less current liabilities

Notes to the condensed financial statements (unaudited)

There are no dilutive or potentially dilutive shares in issue.

1.	The financial information within this preliminary announcement has been extracted from the unaudited financial statements for the year to 31 July 2012 and has been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 July 2011. In accordance with The Financial Reporting Council's guidance on going concern and liquidity risk the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. The Company has no loans. In accordance with the Company's Articles of Association, shareholders have the right to vote on the continuance of the Company, every five years, the next vote being in 2016. The Directors have no reason to believe that the continuation resolution will not be passed in 2016. After making enquiries and considering the future prospects of the Company and notwithstanding the above, the financial statements have been prepared on the going concern basis as it is the Directors' opinion that the Company will continue in operational existence for the foreseeable future. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
2.		2012 £'000			2011 (audited) £'000
	Income
	Income from investments	3,234			3,441
		3,234			3,441
3.	Related party transactions The Directors' fees for the year are detailed in the Directors' Remuneration Report contained within the Annual Report and Financial Statements. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under Section 412 of the Companies Act 2006. Mr GTE Smith, who was appointed as a Director of the Company on 1 February 2009 and retired on 17 October 2011, is a partner of Baillie Gifford & Co. Baillie Gifford & Co are employed by the Company as Investment Managers and Secretaries under a management agreement which is terminable by the Managers on six months' notice and by the Company on three months' notice. The fee in respect of each quarter is 0.25% of the total assets less current liabilities. With effect from 1 August 2012 the management fee will be 0.25% of net assets in respect of each quarter.
4.			2012 £'000	2011 (audited) £'000
	Net return per ordinary share
	Revenue return on ordinary activities after taxation		1,491	1,546
	Capital return on ordinary activities after taxation		(5,830)	11,096
	Total return		(4,339)	12,642
	Weighted average number of ordinary shares in issue		75,638,600	77,973,139
	The net return per ordinary share figures are based on the above totals for revenue and capital and the weighted average number of ordinary shares in issue each period.

Notes to the condensed financial statements (unaudited) (ctd)

5.		2012	2011 (audited)	2012 £'000	2011 (audited) £'000
	Ordinary Dividends
	Amounts recognised as distributions in the period:
	Previous year's final (paid 24 October 2011)	1.50p	1.30p	1,146	1,018
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered. The revenue for the year available for distribution by way of dividend is £1,491,000 (2011 - £1,546,000).
		2012	2011 (audited)	2012 £'000	2011 (audited) £'000
	Dividends paid and proposed in respect of the financial year:
	Proposed final dividend per ordinary share (payable 2 November 2012)	1.50p	1.50p	1,126	1,154
	Adjustment to previous year's final dividend re shares bought back			-	(8)
		1.50p	1.50p	1,126	1,146
	If approved, the proposed final dividend of 1.50p per ordinary share for the year ended 31 July 2012 will be paid on 2 November 2012 to shareholders on the register at the close of business on 12 October 2012. The ex-dividend date is 10 October 2012. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 19 October 2012.
6.	The Company had no borrowings at 31 July 2012 or 31 July 2011.
7.	The Company has authority to allot shares under Section 551 of the Companies Act 2006. The Board has authorised the use of this authority to issue new shares at a premium of not less than 5% in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. In the years to 31 July 2012 and 31 July 2011 no shares were issued. The Company has authority to buy back its ordinary shares. The authority was last renewed at the Annual General Meeting on 17 October 2011 in respect of 11,453,409 shares (equivalent to 14.99% of its issued share capital at that date). In the year to 31 July 2012 a total of 1,880,000 (2011 - 1,355,000) ordinary shares with a nominal value of £188,000 (2011 - £135,500) were bought back at a total cost of £2,768,000 (2011 - £2,213,000). At 31 July 2012 the Company had authority to buy back a further 10,098,409 ordinary shares.
8.	The Company incurred transaction costs on purchases of £31,000 (2011 - £84,000) and on sales of £68,000 (2011 - £89,000), being £99,000 (2011 - £173,000) in total.
9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 July 2012. The financial information for 2011 is derived from the statutory accounts for 2011. Those accounts have been delivered to the Registrar of Companies. The Auditors have reported on the 2011 accounts, their report was unqualified and did not contain a statement under Section 495, 496 and 497 of the Companies Act 2006. The statutory accounts for 2012 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Notes to the condensed financial statements (unaudited) (ctd)

10.	The Report and Accounts will be available on the Company's page on the Managers' website www.pacifichorizon.co.uk‡ on or around 24 September 2012.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

4 September 2012

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For further information please contact:

Anzelm Cydzik,

Baillie Gifford & Co                               0131 275 2000

Roland Cross, Account Director,

Broadgate Marketing                              020 7726 6111

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