Final Results

RNS Number : 7082T

Utilico Emerging Markets Limited

11 June 2009

Date: 10 June 2009

Contact: Charles Jillings

Utilico Emerging Markets Limited

01372 271 486

Alastair Moreton

Arbuthnot Securities Limited

020 7012 2000

Utilico Emerging Markets Limited

Statement of Results

for the year to 31 March 2009

Highlights of results

Net asset value decreased to 107.76p down 36.0%
Investment losses were 24.6% for the year (1)
Net debt gearing reduced from 15.5% to 6.5%
Group revenue account earnings per ordinary share of 5.08p
Maintained dividends per ordinary share of 4.80p (final 0.80p)

(1) Based on opening portfolio

Chairman's Statement

The year to 31 March 2009 was very challenging for the world's markets and UEMs portfolio was impacted directly with the undiluted NAV per share down 36.0% at 107.76p from 168.39p. This represents a recovery from the low point of 93.00p on 28 October 2008.

Against this background the Investment Manager has taken a number of steps to reduce risk, while continuing to position the portfolio for long-term growth. As a result gearing based on net bank debt has reduced from 15.5% to 6.5% of gross assets. Our exposure to Eastern Europe has reduced from 12.4% to 3.6% and our exposure to fossil fuel power generation has reduced from 8.1% to 2.4%. The S&P Index options position was substantially realised in October 2008 and the proceeds were used to reduce bank debt. CFD positions have been reduced to nil.

The losses on investments were £102.0m in the year to 31 March 2009. This represents a loss of 24.6% on the opening portfolio. This compares favourably to the MSCI Index which was down 28.5% over the year. However, the losses per ordinary share widened to 55.20p or 32.8% on the opening undiluted NAV per ordinary share mainly as a result of currency losses of £20.1m arising on UEM's bank debt which was In US dollars. The impact of the currency losses on the bank debt is disappointing and disrupted a longer term trend of outperformance by UEM.

The S&P Index options exposure is achieved through the segregated account in Global Equity Risk Protection ('GERP'), a Bermuda company, consolidated into the Group accounts. The GERP S&P 500 Index options position has underperformed and reversed, in part, the gains in prior years. While a loss is disappointing over twelve months, if viewed over two years the position gained £15.1m.

On the revenue account, investment and other income rose to £14.3m, up 11.6%. This represents a yield on the average gross assets (less current liabilities excluding debt) of 4.0% and is in line with the Investment Manager's expectations. Costs remain a key focus and reduced both in absolute terms and as a percentage of gross assets. The total expense ratio ('TER') reduced to 0.7% down from 0.8% in the prior year. Finance costs reduced as a result of lower borrowings but this was in part offset by an increase in margins. At £4.6m the costs represent 6.7% on the average debt.

The revenue profit for the year increased by 23.2% to £10.9m. However, the basic earnings per share ('EPS') on the revenue account decreased as a result of the increased weighted average number of shares in issue.

The Board has declared a final dividend of 0.80p per ordinary share (1.30p in 2008) resulting in a maintained total dividend for the year of 4.80p.

UEM's share price continues to reflect the wider stresses of the market. At year end the discount had widened to 10.3%. Since the year end, the Investment Manager has bought in and cancelled 250,000 ordinary shares at 95.5p. While modest, this reflects the Manager's view that the long-term opportunities inherent in the portfolio are attractive.

I would like to thank my fellow Directors for their ongoing commitment to UEM and in particular to attending the company visits which coincided with our quarterly Board meetings.

Outlook

At the date of this report investment markets have partially recovered and volatility has reduced, although we remain cautious about the real economy and have some concerns about the ability of the market to sustain this rally.

It is difficult to be certain about the underlying investment portfolio's level of revenue performance or as a result, UEM's future dividend payment. Results to date are encouraging, however lower gearing in the portfolio is likely to hold back UEM's earnings. Once gearing is restored the earnings should recover.

There is a strong sense the worst is over and that a recovery in the real economy is expected in months rather than years. However, the economic data is patchy and weak. Much will depend on the performance of the real economy over the coming months. We remain cautious about the strength of the world's equity markets and the implications of a further loss of confidence or delay in the recovery. Long-term we fully believe the emerging markets will continue to lead the way and that UEM is well positioned to deliver long-term capital gains.

Alexander Zagoreos

Chairman

June 2009

Investment Report

The twelve months to 31 March 2009 have been difficult, with the second half of the year being somewhat worse than the first. After a firming of the market in the summer of 2008, October saw near panic in the markets and this was repeated in February this year. Most asset classes' peak-to-trough range has been wide. The peak-to-trough was 54.4% for the MSCI Index, 31.4% for the US dollar to sterling exchange rate, 78.4% for crude oil and 91.6% for the Baltic Panamax Shipping Index.

The impact of the above volatility on UEM has been negative. UEM's cum income NAV per share fell by 36.0% to 107.76p. This has pegged back UEM's long term performance. Taking into account dividends paid, the annual compound return for UEM's shareholders since inception in 2005 is 6.0%.

Portfolio

As a result of the market losses and deleveraging UEM's portfolio reduced from £414.0m to £245.5m.

The top ten investments have changed over the year. Equest Balkan Properties ('EBP') (4th last year), Cia de Saneamento de Basico do Estado de Sao Paulo ('SABESP') (5th) and Datang International Power (9th) all dropped out of the top ten. They were replaced by Comanche Clean Energy (3rd), POS Malaysia Services Berhad ('POSM') (5th) and Companhia de Saneamento de Minas Gerais ('COPASA') (6th).

EBP fell out of the top ten as a result of a sharp downward rerating of the property market in Eastern Europe. The shares were marked down from 78.0p to 13.0p, a fall of 83.3% resulting in a loss to UEM of £19.9m. This reflected rising concern over the Eastern European countries combined with concern over property values and the impact on loan to value covenants.

UEM exited from Datang International in the year. We have been concerned on three fronts for fossil fuel power generation companies. Firstly, they are often susceptible to policy intervention with respect to both input and output pricing. Secondly, they are faced with difficult operating conditions in regard to input pricing, and coal prices have been particularly volatile. Thirdly, they are impacted by volatile demand as economies decelerate and customers resize their businesses. We therefore sold out of Datang International and others. Our fossil fuel power generation investments have reduced from 8.1% of the portfolio last year to 2.4% as a result.

We sold down our investment in SABESP and in part reinvested the proceeds into COPASA. This, combined with price weakness, saw SABESP fall out of the top ten and COPASA replace it.

COPASA is a water and sewerage company in Brazil and entered the top ten this year at number six. 2008 saw continued growth with revenues up 10.6% and net income up 23.4%.

Comanche Clean Energy is a Brazilian bio-fuel producer and operates in the state of Sao Paulo. 2009 will be the first full year of production and we are optimistic regarding the development of both Comanche Clean Energy and the Brazilian ethanol industry.

POSM has been in the top ten before. It declared a return of capital in August 2007 and as a result dropped out of the top ten. However, the resilience of its business model has meant the share price has improved over the twelve months and POSM has risen in the portfolio.

A key feature of the portfolio has been the strength of the Malaysian investments and the increasing percentage of the portfolio represented by Malaysia. We began the year with £68.3m invested in Malaysia. During the year we realised a net £1.3m. These investments declined by 1.1% which was much less than the rate of decline by the wider market. As a result Malaysia's percentage rose in the portfolio from 16.3% to 27.0%.

We regard our Malaysian investments as both offering growth and the opportunity for structural change. These two aspects should result in higher valuations. Malaysia, as with most countries in the region, has its challenges. However, the stability, regional position and continuing development of the capitalist model in Malaysia should produce a stable long term growth environment.

Malaysia Airport Holdings Berhad ('MAHB') is our largest investment, up from number three last year. The 2008 results saw revenue increase by 9.3% and passenger traffic increase by 5.0%. In addition, MAHB has won approval to build a new terminal for low cost carriers to replace the existing one which should provide considerably more capacity.

Puncak Niaga Holdings Berhad ('Puncak') has risen to number two in the top ten up from number seven at 31 March 2008. As expected, Puncak's net profits fell substantially during 2008 due to their high investment levels, but we expect to see a full recovery of profits in 2009 from the substantial tariff increase, which is expected to be over 30%. Puncak remain in negotiations with the Malaysian Government over a possible sale and leaseback of their assets.

Brazil remains geographically our largest investment portfolio.

AES Tiete is at number seven in the portfolio up one place from last year. Although its share price fell by 7.6% over UEM's financial year, the company reported increases in revenues and net income of 10.4% and 13.7% respectively.

Compania de Gas de Sao Paulo ('COMGAS') is down from our largest holding last year to number eight in the portfolio. The company continues to grow, with 2008 gas volumes sold increasing by 3.6%. Revenues increased by 24.2%, mainly due to higher gas prices, and net income was up 16.0%.

International Container Terminal Services Inc ('ICT') increased revenues by 37.9% for the year to 31 December 2008, mainly due to strong throughput growth. However net income was down 15.9% as a result of currency losses on their hedging position as the US dollar and Euro appreciated against the Philippine peso.

Eastern Water Resources remained at tenth place and reported an impressive net income increase of 29.7% in the year to 30 September 2008. In the three month period to December 2008 Eastern Water managed to increase net earnings by 30.7%, however despite this its share price fell 40.6% in the year to March 2009.

UEM invested £44.1m in the twelve months to 31 March 2009. Key investments in the top ten were COPASA £4.1m, Comanche £3.3m and EBP £2.3m. Other investments include Terna Participacoes SA ('Terna') £4.3m and Zhejiang Expressway Co Ltd ('Zhejiang') £2.8m.

Terna is a Brazilian electricity transmission company offering a high yield and excellent cash flows. 2008 revenues increased by 22.9% and although net profit fell by 12.5%, reported profits were, in fact, ahead of our expectations. Since the year end Terna has received an offer for its shares at a price representing a premium of nearly 100% to UEM's original cost.

Zhejiang develops, designs, constructs and operates toll roads in China, mainly in the province of Zhejiang. Zhejiang is listed on the Hong Kong Stock Exchange. Zhejiang looked very cheap on valuation at the time of UEM's investment, suggesting it had priced in much of the negative news surrounding the impact of traffic diversion to its main roads and exposure to the A-share market through its securities business. In addition, it offered an attractive yield of 6.0% and is a cash rich company. Since we bought the stock it has risen by nearly 50%.

UEM disposed of £110.5m of investments in the twelve months. This included within the top ten, £14.9m from Datang International, £7.7m from COMGAS and £7.2m from SABESP.

Part of this process involved reducing our investment in Eastern Europe. We remain concerned about the challenges facing the Eastern European economies. While there are a number of fundamentally attractive companies in Eastern Europe the political, economic and social risks look high.

Following this activity there was significant movement in UEM's portfolio by sector and geography. Brazil rose to 37% (from 32%), Malaysia to 27% (16%) while China reduced to 14% (17%), Eastern Europe to 4% (12%) and the Philippines to 5% (9%). Thailand, other Latin American, other Asian and the Middle East remained broadly unchanged. On a sector basis, water rose to 21% (17%), renewable energy to 8% (3%), postal to 6% (3%) while electricity reduced to 10% (16%) and telecoms to 5% (9%). Most others remained broadly unchanged.

UEM has four unlisted and untraded investments, which account for 9.3% of the portfolio. The biggest is Comanche, accounting for 6.7%.

Market Hedging

Achieving an optimum hedge for the investment portfolio has been difficult given the sharp movements in the equity markets. We continue to believe there is a place for an actively managed hedge. In overview our goal is to balance the two objectives of achieving a hedge but also ensuring the erosion of the time value inherent in a hedge is at its worst neutral. These two objectives have at times been mutually exclusive. The principle remains sound.

Last year we benefited from the rising volatility and falling markets with gains of £17.1m. This year we released these gains in October and used the proceeds to pay down our bank debt. In the second half we have rebuilt the position. However, falling volatility and rising markets have to date resulted in a loss this year of £2.0m. We fully expect to recover the loss over the next six months.

Bank Debt

UEM reduced its usage of the £80.0m HBOS facility from £79.9m to £41.8m. Further, the profile was switched from US dollars to predominantly sterling. This reduction reflects in the main a reduction in risk profile for UEM. Borrowings will remain a feature of UEM's investment strategy and once stability has returned it is intended that gearing will be reintroduced in line with historic levels.

UEM's current facility with HBOS comprises £30.0m repayable in June 2009, £25.0m repayable in June 2011 and £25.0m repayable in June 2013. The £30.0m tranche will lapse and it is not intended to renew this portion of the facility with HBOS. The remaining £50.0m will still be available for investment.

Since the year end we have continued to realise investments in a rising market and as at 31 May 2009 bank debt had been reduced to £10.0m and cash balances are £14.0m.

Revenue Return

The revenue return remains a key feature of UEM. Total income rose to £14.3m, 11.6% ahead of last year's £12.8m. This represents a yield on the average gross assets of 4.0%, in line with expectations.

Fees and expenses were lower than expected and finance costs have decreased as debt has reduced, although this is offset by an increase in margin on the facility.

The revenue return profit for the year increased by 23.2% to £10.9m. EPS was marginally down at 5.08p due to the increased number of shares in issue.

Looking forward income is expected to be lower. As a result of lower gearing the gross assets have reduced. A geared portfolio results in higher income. The costs of the gearing (interest) is 70% capitalised to the capital account allowing the increased income on a geared basis to fall through to the EPS. Once gearing is restored the income should recover.

Capital Return

The losses on the investment portfolio largely reversed the gains over the past three years. The loss on derivatives of £4.2m reversed some of the prior year gains of £16.7m. The exchange losses of £20.1m arose from the bank loans in US dollars. These together resulted in total income losses on the capital account of £126.3m.

Management fees were sharply lower with no performance fee arising in the year. Again, finance costs were down as bank borrowings were lower, offset in part by higher margins. Tax was positive as taxable gains in Brazil were reversed. The overall position was a loss per share of 60.28p.

Dividends

The EPS on the revenue account was 5.08p. The declared final dividend is 0.80p bringing the full year dividends to 4.80p.

We implemented a dividend reinvestment plan during the year and will continue to do so for those shareholders who have elected for this plan.

Current Trading

We are encouraged by the recent operational performance seen in core utility sectors, although the transportation infrastructure sectors of airports, ports and toll roads have been impacted by lower activity levels.

Outlook

We remain cautious of the markets and the positioning of the portfolio and the reduced gearing reflect this.

Our portfolio should continue to benefit from a stronger recovery in the emerging markets and from stronger currencies in the portfolio as the world focuses on the increasing decoupling of the emerging markets led by China.

GROUP PERFORMANCE SUMMARY


	31 March 2009	31 March 2008	Change %

Undiluted net asset value per ordinary share	107.76p	168.39p	(36.0)
Diluted net asset value per ordinary share	106.51p	157.20p	(32.2)
Ordinary share price	95.50p	153.75p	(37.9)
(Discount)/premium (1)	(10.3%)	(2.2%)	n/a

Earnings per ordinary share (basic)
- Capital	(60.28p)	17.89p	n/a
- Revenue	5.08p	5.24p	(3.1)
- Total	(55.20p)	23.13p	n/a
Dividends per ordinary share
- Interim	4.00p	3.50p	14.3
- Final	0.80p(2)	1.30p	(38.5)
- Total	4.80p	4.80p	-

Equity holders' funds (£m)	230.7	359.5	(35.8)
Gross assets (£m)(3)	272.5	439.4	(38.0)

Cash (£m)	24.1	11.9	102.5
Bank debt (£m)	(41.8)	(79.9)	(47.7)
Net Debt (£m)	(17.7)	(68.0)	(74.0)

Net debt gearing on gross assets	6.5%	15.5%	n/a

Management and administration fees (4)	2.7	3.1	(12.9)
Total expense ratio (5)	0.7%	0.8%	n/a

Based on diluted net asset value
The dividend declared has not been included as a liability in these accounts
Gross assets less liabilities excluding loans
Excluding performance fee, including other expenses
Management and administration fees over monthly average gross assets

DIRECTORS' STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk faced by the Company is that it fails to produce the capital appreciation stated as its investing strategy and the NAV does not rise over the longer-term. The risks which might give rise to this can be categorised as investment and strategy, manager, gearing, operational and financial.

These risks and the way they are mitigated are described in more detail under the heading Internal Controls and Management of Risk in the Corporate Governance section of the Company's Annual Report for the year ended 31 March 2009. The Annual Report is published on the Company's website, www.uem.bm.

DIRECTORS' STATEMENT OF RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable Bermuda law and IFRSs as adopted by the European Union.

The Directors are required to prepare accounts for each financial year which present fairly the financial position, financial performance and cash flows of the Group and of the Company for that year. In preparing the accounts the Directors are required to:

select suitable accounting policies in accordance with IAS 8: Accounting policies, changes in Accounting Estimates and Errors and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether IFRSs have been followed; and
prepare the Accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Accounts comply with Bermuda law. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

To the best of the knowledge of the Directors, the Accounts give a true and fair view of the assets, liabilities, financial position and loss of the Company and its special purpose entity included in the consolidation, and the Corporate Governance Statement includes a description of the principal risks and uncertainties that the Group and the Company faces. The financial risks are also provided in Note 29 to the Accounts.

In so far as the Directors are aware:

there is no relevant audit information of which the Company's auditors are unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The Annual Report and Accounts are published on the Company's website, www.uem.bm, the maintenance and integrity of which is the responsibility of the Company. The work carried out by the auditors does not involve consideration of the maintenance and integrity of the website and accordingly, the auditors accept no responsibility for any changes that have occurred in the Accounts since they were originally presented on the website. Visitors to the website need to be aware that the legislation governing the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction.

GROUP INCOME STATEMENT

2009				2008
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Gains and losses on investments	-	(102,012)	(102,012)	-	21,746	21,746
Gains and losses on derivative instruments	-	(4,201)	(4,201)	-	16,658	16,658
Exchange gains and losses	-	(20,055)	(20,055)	-	1,156	1,156
Investment and other income	14,267	-	14,267	12,781	-	12,781
Total income	14,267	(126,268)	(112,001)	12,781	39,560	52,341
Management and administration fees	(727)	(1,181)	(1,908)	(802)	(4,743)	(5,545)
Other expenses	(762)	(24)	(786)	(854)	(55)	(909)
Profit/(loss) before finance costs and taxation	12,778	(127,473)	(114,695)	11,125	34,762	45,887
Finance costs	(1,381)	(3,222)	(4,603)	(1,677)	(3,913)	(5,590)
Profit/(loss) before taxation	11,397	(130,695)	(119,298)	9,448	30,849	40,297
Taxation	(544)	1,774	1,230	(636)	(787)	(1,423)
Profit/(loss) for the year	10,853	(128,921)	(118,068)	8,812	30,062	38,874

Earnings per share (basic) - pence	5.08	(60.28)	(55.20)	5.24	17.89	23.13
Earnings per share (diluted) - pence	4.91	n/a	n/a	4.88	16.64	21.52

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS.

The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies in the UK. All items in the above statement derive from continuing operations.

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

INCOME STATEMENT OF THE COMPANY

2009				2008
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Gains and losses on investments	-	(104,364)	(104,364)	-	23,504	23,504
Gains and losses on derivative instruments	-	(2,171)	(2,171)	-	15,245	15,245
Exchange gains and losses	-	(19,774)	(19,774)	-	808	808
Investment and other income	14,261	-	14,261	12,780	-	12,780
Total income	14,261	(126,309)	(112,048)	12,780	39,557	52,337
Management and administration fees	(727)	(1,181)	(1,908)	(802)	(4,743)	(5,545)
Other expenses	(725)	(24)	(749)	(852)	(55)	(907)
Profit/(loss) before finance costs and taxation	12,809	(127,514)	(114,705)	11,126	34,759	45,885
Finance costs	(1,378)	(3,215)	(4,593)	(1,676)	(3,912)	(5,588)
Profit/(loss) before taxation	11,431	(130,729)	(119,298)	9,450	30,847	40,297
Taxation	(544)	1,774	1,230	(636)	(787)	(1,423)
Profit/(loss) for the year	10,887	(128,955)	(118,068)	8,814	30,060	38,874

Earnings per share (basic) - pence	5.09	(60.29)	(55.20)	5.24	17.89	23.13
Earnings per share (diluted) - pence	4.92	n/a	n/a	4.88	16.64	21.52

The total column of this statement represents the Company's Income Statement, prepared in accordance with IFRS.

All income is attributable to the equity holders of the Company.

GROUP STATEMENT OF CHANGES IN EQUITY

for the year to 31 March 2009

	Ordinary	Share			S	Other non-	Retained earnings
	share	premium	Special	Warrant	share	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Balance at 31 March 2008	21,351	219,008	-	9,048	9,350	103	97,470	3,200	359,530
(Loss)/profit for the year	-	-	-	-	-	-	(128,921)	10,853	(118,068)
Ordinary dividends paid	-	-	-	-	-	-	-	(11,338)	(11,338)
Conversion of warrants and S shares	61	548	-	(151)	(65)	216	-	-	609
Transfer to special reserve	-	(219,500)	219,500	-	-	-	-	-	-
Balance at 31 March 2009	21,412	56	219,500	8,897	9,285	319	(31,451)	2,715	230,733

for the year to 31 March 2008

	Ordinary	Share		S	Other non-	Retained earnings
	share	premium	Warrant	share	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Balance at 31 March 2007	16,498	147,194	9,050	-	101	67,408	1,365	241,616
Profit for the year	-	-	-	-	-	30,062	8,812	38,874
Ordinary dividends paid	-	-	-	-	-	-	(6,977)	(6,977)
Issue of ordinary shares, S shares and warrants	4,853	73,074	(2)	9,350	2	-	-	87,277
Cost of issuing ordinary share capital	-	(1,260)	-	-	-	-	-	(1,260)
Balance at 31 March 2008	21,351	219,008	9,048	9,350	103	97,470	3,200	359,530

STATEMENT OF CHANGES IN EQUITY OF THE COMPANY

for the year to 31 March 2009

	Ordinary	Share			S	Other non-	Retained earnings
	share	premium	Special	Warrant	share	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Balance at 31 March 2008	21,351	219,008	-	9,048	9,350	103	97,468	3,202	359,530
(Loss)/profit for the year	-	-	-	-	-	-	(128,955)	10,887	(118,068)
Ordinary dividends paid	-	-	-	-	-	-	-	(11,338)	(11,338)
Conversion of warrants and S shares	61	548	-	(151)	(65)	216	-	-	609
Transfer to special reserve	-	(219,500)	219,500	-	-	-	-	-	-
Balance at 31 March 2009	21,412	56	219,500	8,897	9,285	319	(31,487)	2,751	230,733

for the year to 31 March 2008

	Ordinary	Share		S	Other non-	Retained earnings
	share	premium	Warrant	share	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s

Balance at 31 March 2007	16,498	147,194	9,050	-	101	67,408	1,365	241,616
Profit for the year	-	-	-	-	-	30,060	8,814	38,874
Ordinary dividends paid	-	-	-	-	-	-	(6,977)	(6,977)
Issue of ordinary shares, S shares and warrants	4,853	73,074	(2)	9,350	2	-	-	87,277
Cost of issuing ordinary share capital	-	(1,260)	-	-	-	-	-	(1,260)
Balance at 31 March 2008	21,351	219,008	9,048	9,350	103	97,468	3,202	359,530

GROUP BALANCE SHEET

At 31 March	2009	2008
	£'000s	£'000s
Non-current assets
Investments	245,511	413,967
Current assets
Other receivables	3,084	3,171
Derivative financial instruments	12,090	34,769
Cash and cash equivalents	24,058	11,876
	39,232	49,816
Current liabilities
Bank loans	-	(29,962)
Other payables	(2,270)	(11,732)
Derivative financial instruments	(9,930)	(10,721)
	(12,200)	(52,415)
Net current assets/(liabilities)	27,032	(2,599)
Total assets less current liabilities	272,543	411,368
Non-current liabilities
Bank loans	(41,810)	(49,937)
Deferred tax	-	(1,901)
Net assets	230,733	359,530

Equity attributable to equity holders
Ordinary share capital	21,412	21,351
Share premium account	56	219,008
Special reserve	219,500	-
Warrant reserve	8,897	9,048
S share reserve	9,285	9,350
Other non-distributable reserve	319	103
Capital reserves	(31,451)	97,470
Revenue reserve	2,715	3,200
Total attributable to equity holders	230,733	359,530

Net asset value per ordinary share
Basic - pence	107.76	168.39
Diluted - pence	106.51	157.20

BALANCE SHEET OF THE COMPANY

At 31 March	2009	2008
	£'000s	£'000s
Non-current assets
Investments	252,689	441,360
Current assets
Other receivables	3,084	3,171
Derivative financial instruments	-	458
Cash and cash equivalents	23,770	11,236
	26,854	14,865
Current liabilities
Bank loans	-	(29,962)
Other payables	(2,242)	(11,732)
Derivative financial instruments	(4,758)	(3,163)
	(7,000)	(44,857)
Net current assets/(liabilities)	19,854	(29,992)
Total assets less current liabilities	272,543	411,368
Non-current liabilities
Bank loans	(41,810)	(49,937)
Deferred tax	-	(1,901)
Net assets	230,733	359,530

Equity attributable to equity holders
Ordinary share capital	21,412	21,351
Share premium account	56	219,008
Special reserve	219,500	-
Warrant reserve	8,897	9,048
S share reserve	9,285	9,350
Other non-distributable reserve	319	103
Capital reserves	(31,487)	97,468
Revenue reserve	2,751	3,202
Total attributable to equity holders	230,733	359,530

Net asset value per ordinary share
Basic - pence	107.76	168.39
Diluted - pence	106.51	157.20

GROUP CASH FLOW STATEMENT

for the year to 31 March	2009	2008
	£'000s	£'000s
Cash flows from operating activities	81,058	(120,656)
Cash flows from investing activities	-	-
Cash flows before financing activities	81,058	(120,656)
Financing activities Ordinary dividends paid	(11,338)	(6,977)
Movements from borrowings	(58,271)	35,626
Proceeds from warrants exercised Proceeds from S shares exercised Proceeds from issue of ordinary share capital	545 64 -	6 - 83,756
Cash flows from financing activities	(69,000)	112,411

Net movement in cash and cash equivalents	12,058	(8,245)
Cash and cash equivalents at the beginning of the year	11,876	19,904
Effect of movement in foreign exchange	124	217
Cash and cash equivalents at the end of the year	24,058	11,876

CASH FLOW STATEMENT OF THE COMPANY

for the year to 31 March	2009	2008
	£'000s	£'000s
Cash flows from operating activities	81,129	(121,146)
Cash flows from investing activities	-	-
Cash flows before financing activities	81,129	(121,146)
Financing activities Ordinary dividends paid	(11,338)	(6,977)
Movements from borrowings	(58,271)	35,626
Proceeds from warrants exercised Proceeds from S shares exercised Proceeds from issue of ordinary share capital	545 64 -	6 - 83,756
Cash flows from financing activities	(69,000)	112,411

Net movement in cash and cash equivalents	12,129	(8,735)
Cash and cash equivalents at the beginning of the year	11,236	19,904
Effect of movement in foreign exchange	405	67
Cash and cash equivalents at the end of the year	23,770	11,236

NOTES

The consolidated Accounts for the year ended 31 March 2009 comprise the results of the Company and of the segregated account underlying the 'B' shares of Global Equity Risk Protection Limited, a special purpose entity incorporated in Bermuda (together referred to as the 'Group').

A final dividend in respect of the year ended 31 March 2009 of 0.80p per ordinary share will be paid on 3 July 2009 to shareholders on the register at close of business on 19 June 2008. The total cost of the dividend which has not been accrued in the results for the year to 31 March 2009, is £1,711,000 based on 213,867,040 ordinary shares in issue at the date of this report.

This statement was approved by the Board on 10 June 2009. It is not the Company's statutory accounts. The statutory accounts for the financial year ended 31 March 2009 have been approved and audited, and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year ended 31 March 2008 received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

The Report & Accounts for the year ended 31 March 2009 will be posted to shareholders in mid June 2009. In accordance with AIM Rule 26, a copy is available to view and download from the Company's website at www.uem.bm. Copies may also be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.