Half-year Report

WEISS KOREA OPPORTUNITY FUND LTD.

HALF-YEARLY FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 2016

Weiss Korea Opportunity Fund Ltd. (the “Company”) has today, released its Half-Yearly Financial Report for the period ended 30 June 2016. The Report will shortly be available for inspection via the Company's website www.weisskoreaopportunityfund.com.

For further information, please contact:

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

Summary Information

The Company

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

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

Investment Objective and Dividend Policy

The Company’s investment objective is to provide Shareholders with an attractive return on their investment, predominantly through long-term capital appreciation. The Company intends to return to Shareholders all dividends received, net of withholding tax on an annual basis.

Investment Policy

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

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

The Company had one open KRW/USD forward currency contract with a net amount of £26,904 at 30 June 2016 (31 December 2015: Nil).

Share Buy-backs

At the Annual General Meeting (“the AGM”) on 27 July 2016, Shareholders granted the Company a general buy-back authority of up to 40% of the Company's issued share capital. In addition, on 12 February 2016, the Company appointed N+1 Singer Advisory LLP to manage an irrevocable programme during the close period leading up to the publication of the Company’s full year results (the “Close Period Buy-Back Programme”) to buy back ordinary shares within certain pre-set parameters. Any shares purchased in the Close Period Buy-Back Programme will count towards the Company's general buy-back authority of 40% of the Company's issued share capital, as approved at the Company's AGM.

On 5 August 2016, the Company re-appointed N+1 Singer Advisory LLP to manage the Close Period Buy-Back Programme to buy back ordinary shares within certain pre-set parameters during the close period leading up to the publication of these half-yearly results. Any shares purchased in the Close Period Buy-Back Programme will count towards the Company's share buy-back authority of 40% of the Company's issued share capital, as approved at the Company's AGM.

For additional information on share buy-backs refer to Note 6.

Shareholder Information

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

Company financial highlights and performance summary for the period ended 30 June 2016         

					As at		As at
					30 June 2016		31 December 2015
					(Unaudited)		(Audited)
					£		£
Total Net Assets					141,376,622		131,142,778
NAV per share					1.4514		1.3449
Basic and diluted earnings per share					0.1287		0.1561
Mid-Market Share price					1.3350		1.2800
Discount to NAV					(8.0%)		(4.8%)

As at close of business on 6 September 2016, the latest published NAV per share had increased to £1.5148 (as at 31 August 2016) and the share price stood at £1.4500.

Total expense ratio

The annualised total expense ratio for the six months ended 30 June 2016 was 1.81% (as at 31 December 2015: 1.81%).

Chairman’s Review

We are pleased to provide the 2016 Half-Yearly Financial Report on the Company. During the period from    31 December 2015 to 30 June 2016 (the “Period”), the Company’s NAV increased by 10.94%[1], underperforming the reference MSCI Korea 25/50 Capped Index, which returned 14.81% in pounds sterling.[2] A report from the Investment Manager follows.

The Company paid a dividend of 2.2416 pence per share on 28 June 2016. As stated in the Admission Document, the Directors intend to return to Shareholders all dividends received, net of withholding tax, on an annual basis.  Typically for South Korean companies, shareholders of record near the end of the calendar year are entitled to a single annual dividend. However, the dividends are generally not announced or paid to shareholders until several months into the following calendar year. The Board has decided to schedule payment of the Company’s annual dividend distributions in the early summer. This timing helps ensure that dividends are paid out as soon as reasonably practical after the Company receives them. 

The Board is committed to adding value for Shareholders, as well as enhancing the liquidity of the Company’s shares, through the exercise of its authority to repurchase up to 40% of the shares of the Company at a discount to NAV. In this regard, during the Period, the Company repurchased and cancelled 100,000 shares (0.1% of shares outstanding on 31 December 2015) on instructions from the Board. Also, the Board has in place standing instructions with the Company’s broker, N+1 Singer Advisory LLP, for the repurchase of shares during closed periods when the Board is not permitted to give individual instructions, typically around the preparation of the Annual and Half-Yearly Financial Reports. We will continue to keep Shareholders informed of any share repurchases through public announcements.

Shareholders will have an opportunity to realise all or part of their shareholding in the first half of 2017. The Board will contact Shareholders early in 2017 with the appropriate documentation.

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

The Annual General Meeting was held on 27 July 2016. If you were unable to attend in person, the Board is always happy to answer questions or to meet with Shareholders directly if required. Please contact the Company at the address given. Additionally, if you would like to speak with the Investment Manager or learn about potential opportunities to meet with them, please contact the Company’s broker.

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

Sincerely,

Norman Crighton
Chairman
6 September 2016

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

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

Investment Manager’s Report

For the six month period ended 30 June 2016

Introduction

The Company invests primarily in South Korean preferred shares. In general, South Korean preferred shares do not have fixed dividends or  maturity dates. Instead, the typical contractual terms of preferred shares state that their dividends will be incrementally higher than the dividends of their corresponding common shares. Hence, such preferred shares fully participate in dividend growth of the issuer and are essentially non-voting equity shares. Despite this, many South Korean preferred shares trade at significant discounts to their corresponding common shares. For example, LG Electronics Inc. ordinary shares closed at ?53,900 on 30 June 2016 while the company’s corresponding preferred shares closed at ?28,900 (a 46% discount to the price of the ordinary shares). As a result of this anomaly, preferred shares’ price-to-earnings ratios are typically substantially lower, and their dividend yields are higher, than those of their corresponding common shares. For the Company’s portfolio of preferred shares, the weighted average discount of preferred shares held was 36.4% on 30 June 2016, compared with 36.0% on 31 December 2015.

Performance

The Company’s NAV increased 10.94% from 31 December 2015 to 30 June 2016.[1] By comparison, the MSCI Korea 25/50 Index[2] increased 14.81% over the period.[3] From the Company’s inception, its NAV has increased by 53.5% compared with an increase of 9.8% for the MSCI Korea 25/50 Index over the same period.[4] Although we report the Company’s NAV weekly, we caution readers against using past performance (and particularly short-term returns) to predict long-term performance.

Portfolio

At the end of the Period, preferred shares made up 93% of the Company’s NAV. The remainder of the portfolio was held in cash and the iShares MSCI South Korea Capped ETF (EWY) as a liquidity buffer.  In comparison, preferred shares made up 95% of the Company’s 31 December 2015 NAV. The trailing price-to-earnings ratio of the Company’s preferred share portfolio on 30 June 2016 was 7.3x,[5] the trailing net dividend yield was 1.7%,[6] and the weighted average discount of the preferred shares in the portfolio was 36.4%.[7] Please see Top Ten Holdings section for a list of our ten largest positions.

The largest single company exposure as of 30 June 2016 was the preferred shares of Samsung Electronics Co., Ltd (“Samsung”), at 20.91% of NAV. Samsung continued its first quarter common and preferred share buy-back program into the second quarter of 2016. The discount of Samsung preferred shares to common shares has been volatile, and the Manager continues to take advantage of opportunities to increase or reduce Samsung’s weight in the portfolio. The Manager believes that the discount changes are in part caused by institutional supply/demand imbalances from institutions repositioning their portfolios around the company buy-back program, and not from any fundamental changes to the value of Korean preferred shares in relation to common shares.

Principal Risks and Uncertainties

The principal risks and uncertainties with the Company’s business fall into the following categories: investment risk; operational risk; accounting, legal and regulatory risk; and financial risks. A detailed explanation of the principal risks and uncertainties in each of these categories can be found on pages 16 to 18 of the Company’s published Annual Report and Audited Financial Statements for the year ended 31 December 2015 which can be found on the Company’s website. These risks and uncertainties have not materially changed during the six months ended 30 June 2016, and are not expected to change materially in the remaining six months of the year.

Commentary

In the first half of 2016, the Korean preferred share market performed reasonably well in spite of a number of macroeconomic and political uncertainties.

Brexit

The result of the U.K.’s referendum vote to leave the European Union surprised many market participants. The Brexit vote should remind investors that “unexpected” events occur much more frequently than many investors seems to anticipate a priori. This is one reason why investors can benefit from portfolio diversification. Indeed, U.K. investors benefitted because the Company does not hedge its Korean currency exposure, and sterling depreciated meaningfully against a basket of currencies – including the won – in the period immediately following the referendum. The long-term ramifications for the United Kingdom and Europe are currently unclear.

Japan

In the first half of the year, the Japanese yen appreciated by 12.4% against the Korean won, which has improved Korean exporters’ prospects. In previous years, the depreciation of the yen against the won had been a drag on the earnings of Korean companies that compete against Japanese manufacturers. This may serve as a short-term positive for certain Korean companies. 

China

Approximately 25% of Korean exports go to China,[8] and declining Chinese exports are weighing on the Korean economy. A recession in China remains one of the most significant short-term risks for South Korean equities and for the Company. Separately, China appears to have changed its historical stance toward North Korea (which was one of leniency) when it supported U.N. sanctions after North Korea conducted its fourth nuclear detonation in January 2016. On the other hand China seems very concerned about the deployment of the Terminal High-Altitude Area Defense (“THAAD”) system which would enable monitoring of much of China’s airspace and could give early warning of missile launches. The THAAD system might also provide protection for U.S. bases in South Korea, (as currently implemented it provides no protection for Seoul). One interpretation of China’s concern is that the envisioned deployment of THAAD would give the U.S. enhanced power if there was a confrontation with China in the South China Sea.

Korean Dividends

There is a high correlation between the discounts on Korean preference shares and dividend yield. Korean companies tend to payout a very low proportion of their earnings as dividends compared to companies in other countries. This is due in part to a history of government policy to protect the Chaebols in return for which the Chaebols would invest in the Korean economy. Dividends were antithetical to that policy and consequently are subject to high tax rates for both corporations and individuals[9] while capital gains were not taxed at all. The government has backtracked on previous legislation which reduced the top tax rate on dividends. The Corporate Income Recirculation Tax (CIRT) Act had lowered the maximum tax on dividends, but under legislation passed in July, the tax rate for recipients of large dividends has reverted back to its previous level. In addition, the 10% tax on retained earnings has been revised so that salary increases get at 1.5X weighting while dividends only get a 0.8X rating. These are unfortunate negative developments that incentivise the controlling shareholders of large companies to keep their dividend payout ratio low, and threaten the progress that we have seen in recent quarters. However, in the long run as pension funds increase their ownership share in companies and become more activist there may be more pressure on firms to increase their dividend payout ratios or to increase share buy-backs. 

Our Outlook

The weighted average discount of preferred shares held by the Company was 36.4% on 30 June 2016. In other words, equity market participants are willing to pay, on average, more than 1.5X the price of the Company’s preferred share portfolio to buy the corresponding Korean common shares. We continue to believe that this is a hefty price to pay for a more liquid portfolio with the right to vote. We believe that the Company’s weighted average discount offers the potential for excess return.

We expect Korean preferred share discounts to narrow over time, but we cannot predict the timing and anticipate unexpected bumps along the way. As the Brexit vote demonstrated, unexpected things occur more frequently than most people imagine. In the meantime, the Company owns a portfolio of preferred shares at cheap absolute prices (e.g. as measured by price-to-earnings and enterprise value/EBIT ratios), which we believe is attractive relative to other global asset classes in a zero interest rate world. Over the long-run, we believe that corporate governance will continue to improve and that Korean preferred shares’ cheap valuation relative to common shares offer opportunity for exceptional long-term upside. To repeat ourselves: in the short run, prices are driven by sentiment, but in the long run, prices tend to reflect underlying value. We continue to believe that a portfolio of undervalued stocks and trading at large discounts to securities with the same economics is likely to do well over the long run.

Weiss Asset Management LP

6 September 2016

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

[2] All returns are denominated in GBP. The MSCI Korea 25/50 Index is a free float weighted equity index. It has 107 components. This is the benchmark used by the iShares MSCI South Korea Capped ETF (EWY), the largest ETF investing in Korea. Further information about this index is available on the MSCI website: https://www.msci.com/resources/factsheets/index_fact_sheet/msci-korea-2550-index.pdf. The KOSPI is broader, but is not free float weighted. Free float can vary widely across securities.

[3] MSCI total return indices are calculated as if any dividends paid by constituents are reinvested at their respective closing prices on the ex-date of the distribution. As discussed in footnote 1, WKOF's performance figures include such distributions, but the distributions are not assumed to be reinvested in WKOF when calculating WKOF's performance.

[4] Since inception of the Company on 14 May 2013. The WKOF return since inception is calculated on the basis of the Initial Net Asset Value per Ordinary Share.

[5] The average trailing 12-month P/E ratio of preferred shares held is based on the consolidated diluted earnings per share reported by Bloomberg over the trailing 12-month period, and is calculated as the total market value of WKOF’s preferred share portfolio on the report date divided the total earnings allocable to WKOF based on WKOF’s holdings on the report date. This calculation excludes companies with trailing 12-month losses.

[6] Trailing net dividend yield of preferred shares held represents the weighted average dividend yield of the preferred shares owned by WKOF over the 12-month period ending on the report date as reported by Bloomberg, after accounting for Korean taxes applicable to WKOF, and weighted by the market value of each investment on the report date. This figure does not estimate or forecast future dividend payments on WKOF's investments.

[7] For this computation, the discounts of preferred shares to their respective ordinary shares are weighted by the size of the position in the WKOF portfolio.

[8] In-Soo Nam, “South Korea Fiscal Deficit Seen at Seven-Year High in 2016,” WSJ, 7 Sept. 2015, http://www.wsj.com/articles/south-korea-fiscal-deficit-seen-at-seven-year-high-in-2016-1441679795

[9] Taxes on dividends received by low and middle income shareholders were not particularly high, but the public has a very low percentage of their assets invested in stocks.

Top Ten Holdings

					Fair		% of
Investments			Holdings at		Value		Total Net
			30.06.2016		£		Assets
			(Unaudited)		(Unaudited)		(Unaudited)
Samsung Electronics Co Ltd Preferred Shares			38,353		29,563,869		20.91%
LG Electronics Inc Preferred Shares			637,813		12,020,863		8.50%
Hyundai Motor Company 1st Preferred Shares			176,852		10,875,923		7.69%
Hyundai Motor Company 2nd Preferred Shares			149,200		9,360,269		6.62%
Amorepacific Group Preferred Shares			56,300		9,013,726		6.38%
CJ Cheiljedang 1st Preferred Shares			58,523		7,900,260		5.59%
CJ Corporation Preferred Shares			114,738		7,430,208		5.26%
Hyundai Motor Company 3rd Preferred Shares			89,802		5,212,193		3.69%
iShares MSCI South Korea Capped ETF			133,157		5,207,251		3.68%
Samsung SDI Co Ltd Preferred Shares			103,943		4,189,172		2.96%
					100,773,734		71.28%
					Fair		% of
Investments			Holdings at		Value		Total Net
			31.12.2015		£		Assets
			(Audited)		(Audited)		(Audited)
Samsung Electronics Co Ltd Preferred Shares			37,418		23,594,962		17.99%
LG Electronics Inc Preferred Shares			712,980		11,837,813		9.03%
Hyundai Motor Company 1st Preferred Shares			176,852		10,486,874		8.00%
Hyundai Motor Company 2nd Preferred Shares			149,200		9,019,809		6.88%
CJ Corporation Preferred Shares			114,738		8,662,236		6.61%
LG Household & Healthcare Preferred Shares			25,400		7,993,645		6.10%
Amorepacific Group Preferred Shares			56,300		7,474,864		5.70%
CJ Cheiljedang 1st Preferred Shares			58,523		7,397,590		5.64%
Hyundai Motor Company 3rd Preferred Shares			89,802		5,158,786		3.93%
Samsung SDI Co Ltd Preferred Shares			103,943		4,413,707		3.37%
					96,040,286		73.25%

Directors

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

Norman Crighton (aged 50)

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

Stephen Charles Coe (aged 50)

Mr Coe is Chairman of the Audit Committee. He qualified as a Chartered Accountant with PricewaterhouseCoopers in 1990. From 1997 to 2003 he was a director of the Bachmann Trust Company Limited and managing director of Bachmann Fund Administration Limited. Between 2003 and 2006, Stephen was managing director of Investec Administration Services Limited and of Investec Trust (Guernsey) Limited prior to becoming self-employed in 2006 providing director services to financial services clients.

Currently, Mr Coe sits on the board of a number of listed companies including Raven Russia Limited, a main market listed property investment specialist focused on Russia, and European Real Estate Investment Trust Limited, a European focused closed-ended property investment company. Stephen is also a non-executive director of Trinity Capital Limited, an AIM listed Indian real estate investment company and South Africa Property Opportunities plc, an AIM listed, close-ended investment fund focused on South African real estate assets. Stephen is British and resident in Guernsey. Mr Coe was appointed to the Board in 2013.

Robert Paul King (aged 53)

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

Directors’ Responsibility Statement

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

·      these Condensed Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and in accordance with International Accounting Standard 34 “Interim Financial Reporting” issued by the European Union and the AIM Rules of the LSE;

·      these Condensed Financial Statements include a fair review of important events that have occurred during the period and their impact on the Condensed Financial Statements, together with a description of the principal risks and uncertainties of the Company for the remaining six months of the financial period as detailed in the Investment Manager’s Report; and

·      these Condensed Financial Statements include a fair review of related party transactions that have taken place during the six month period which have had a material effect on the financial position or performance of the Company, together with disclosure of any changes in related party transactions in the last Annual Report and Audited Financial Statements which have had a material effect on the financial position of the Company in the current period.

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

On behalf of the Board,

Norman Crighton	Robert King
Chairman	Director

6 September 2016

Condensed Statement of Financial Position

							As at		As at
							30 June 2016		31 December 2015
							(Unaudited)		(Audited)
						Notes	£		£
Assets
Financial assets at fair value through profit or loss							136,814,114		122,775,669
Other receivables							329,881		2,358,893
Cash and cash equivalents							4,467,754		6,360,135
Due from broker							76,393		481,717
Derivative financial assets						5	48,346		-
Total assets							141,736,488		131,976,414
Liabilities
Current liabilities
Due to broker							8,145		-
Derivative financial liabilities						5	21,442		-
Other payables							330,279		833,636
Total liabilities							359,866		833,636
Net assets							141,376,622		131,142,778
Represented by:
Shareholders' equity and reserves
Share capital						6	93,626,149		93,746,629
Other reserves							47,750,473		37,396,149
Total shareholders' equity							141,376,622		131,142,778
Net assets per Share						9	1.4514		1.3449

The Condensed Financial Statements were approved and signed by the Board of Directors on 6 September 2016.

Norman Crighton	Robert King
Chairman	Director

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

Condensed Statement of Comprehensive Income

							For the period ended		For the period ended
							30 June 2016		30 June 2015
							(Unaudited)		(Unaudited)
						Note	£		£
Income
Net changes in fair value of financial assets at fair value through profit or loss							13,569,107		8,273,293
Other income							392,915		243,064
Net income							13,962,022		8,516,357
Expenses
Operating expenses							(1,337,720)		(1,232,712)
Total operating expenses							(1,337,720)		(1,232,712)
Operating profit for the period before tax							12,624,302		7,283,645
Withholding tax						(2q)	(86,441)		(53,515)
Operating profit for the period after tax							12,537,861		7,230,130
Total comprehensive income for the period							12,537,861		7,230,130
Basic and diluted earnings per share							0.1287		0.0719

All items derive from continuing activities.

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

Condensed Statement of Changes in Equity

For the period ended 30 June 2016 (Unaudited)
				Share	Other
				capital	reserves	Total
			Notes	£	£	£
Balance at 1 January 2016				93,746,629	37,396,149	131,142,778
Total comprehensive income for the period				-	12,537,861	12,537,861
Transactions with Shareholders, recorded directly in equity
Repurchase of ordinary shares and cancelled on purchase			6	(120,480)	-	(120,480)
Distributions paid			3	-	(2,183,537)	(2,183,537)
Balance at 30 June 2016				93,626,149	47,750,473	141,376,622
For the period ended 30 June 2015 (Unaudited)
				Share	Other
				capital	reserves	Total
			Note	£	£	£
Balance at 1 January 2015				102,900,000	23,515,820	126,415,820
Total comprehensive income for the period				-	7,230,130	7,230,130
Transactions with Shareholders, recorded directly in equity
Repurchase of ordinary shares and cancelled on purchase				(5,796,578)	-	(5,796,578)
Distributions paid			3	-	(1,868,474)	(1,868,474)
Balance at 30 June 2015				97,103,422	28,877,476	125,980,898

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

Condensed Statement of Cash Flows

		For the period ended		For the period ended
		30 June 2016		30 June 2015
		(Unaudited)		(Unaudited)
	Note	£		£
Cash flows from operating activities
Total comprehensive income for the period		12,537,861		7,230,130
Adjustments for:
Net change in fair value of financial assets held at fair value profit or loss		(13,569,107)		(8,273,293)
Effect of foreign exchange rate fluctuations		885,334		7,258
Decrease in debtors		1,980,666		1,982,273
Decrease in creditors		(481,915)		(443,824)
Net cash generated from operating activities		1,352,839		502,544
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		(33,225,181)		(9,244,983)
Proceeds from the sale of financial assets at fair value through profit or loss		32,283,978		14,139,390
Net cash (used in)/generated from investing activities		(941,203)		4,894,407
Cash flows from financing activities
Repurchase of ordinary shares and cancelled on purchase		(120,480)		(5,796,578)
Distributions paid	3	(2,183,537)		(1,868,474)
Net cash used in financing activities		(2,304,017)		(7,665,052)
Net decrease in cash and cash equivalents		(1,892,381)		(2,268,101)
Cash and cash equivalents at the beginning of the period		6,360,135		6,408,790
Cash and cash equivalents at the end of the period		4,467,754		4,140,689

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

Notes to the Unaudited Condensed Financial Statements

1. General information

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

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

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

2. Significant accounting policies

a)     Statement of Compliance

The Condensed Financial Statements of the Company for the period ended 30 June 2016 have been prepared in accordance with IFRS and in accordance with International Accounting Standard 34 “Interim Financial Reporting” issued by the European Union and the AIM Rules of the London Stock Exchange. They give a true and fair view and are in compliance with the Companies (Guernsey) Law, 2008 (the “Law”).

b)     Basis of preparation

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

The Condensed Financial Statements, covering the period from 1 January to 30 June 2016 are not audited.

The same accounting policies and methods of computation have been applied to the Condensed Financial Statements as in the Annual Report and Audited Financial Statements at 31 December 2015. The presentation of the Condensed Financial Statements is consistent with the Annual Report and Audited Financial Statements.

The Condensed Financial Statements do not include all the information and disclosures required in the Annual Report and Audited Financial Statements and should be read in conjunction with the Annual Report and Audited Financial Statements at 31 December 2015. The Audit Report on those accounts was not qualified.

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

c)     Going Concern

The Directors believe that, having considered the Company’s investment objective (see Summary Information section), financial risk management (see Note 17 to the Financial Statements on pages 41 to 45 of the Annual Report and Audited Financial Statements at 31 December 2015) and in view of the liquidity of investments, the income deriving from those investments and its holding in cash and cash equivalents, the Company has adequate financial resources and suitable management arrangements in place to continue as a going concern for at least twelve months from the date of approval of the Unaudited Half-Yearly Financial Report unless the Shareholders elect to realise some or all of the value of their Ordinary Shares, less applicable costs and expenses, on or prior to the fourth anniversary of Admission, being 15 May 2017 (the "Realisation Date"). See Note 6 for further details.

d)     Standards, amendments and interpretations not yet effective

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

The Company is currently evaluating the potential effect of this standard.

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

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

e)     Financial instruments

i)     Classification

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

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

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the timeframe established by regulation or convention in the marketplace.

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

ii)     Recognition

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

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

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

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

Derivatives

Futures and forward foreign currency contracts are treated as derivative contracts and as such are recognised at fair value on the date on which they are entered into and subsequently re-measured at their fair value. Fair value is determined by rates in active currency markets. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. The gain or loss on re-measurement to fair value is recognised immediately through profit or loss in the Condensed Statement of Comprehensive Income within net changes in fair value of financial assets at fair value through profit or loss in the period in which they arise.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the Condensed Statement of Financial Position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise assets and settle the liabilities simultaneously.

iii) Measurement

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

Derecognition of financial instruments

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

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

Realised and unrealised gains and losses

Realised gains and losses arising on disposal of investments are calculated by reference to the proceeds received on disposal and the average cost attributable to those investments, and are recognised in the Condensed Statement of Comprehensive Income. Unrealised gains and losses on investments are recognised in the Condensed Statement of Comprehensive Income.

f)     Income

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

g)    Expenses

All expenses are accounted for on an accruals basis.

h)    Cash and cash equivalents

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

i)     Share Capital

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

j)     Foreign currency translations

Functional and presentation currency

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

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

k)    Treasury Shares

Where the Company purchases its own share capital, the consideration paid, which includes any directly attributable costs, is recognised as a deduction from Shareholders’ equity through the other reserves, which is a distributable reserve.

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

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

l)     Operating Segments

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

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

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

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

m)   Other Receivables

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

n)    Other Payables

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

o)     Due from and due to brokers

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

p)     Dividend Distribution

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

q)     Taxation

The Company has been granted Exempt Status under the terms of The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 to income tax in Guernsey. Its liability is an annual fee of £1,200 (2015: £1,200). 

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

r)     Other Reserves

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

3. Dividends to Shareholders

Dividends, if any, will be paid annually in June each year. An annual dividend of 2.2416 pence per share (£2,183,537) was approved on 2 June 2016 and paid on 28 June 2016, in respect of the year ended 31 December 2015. 

For the period ended 30 June 2015, an annual dividend of 1.8580 pence per share (£1,868,474) was approved on 4 June 2015 and paid on 26 June 2015, in respect of the year ended 31 December 2014.

4. Significant accounting judgements, estimates and assumptions

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

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

Judgements

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

5. Derivative financial instruments

Spot contracts								As at
								30.06.16
							Notional amount	Fair value
							of contracts	assets
Expiration		Underlying					outstanding	(liabilities)
								£
1 July 2016		Foreign currency (Purchase of KRW)				KRW 4,303,100,000		48,346
1 July 2016		Foreign currency (Sale of USD)				USD 3,700,000		(21,442)
								26,904

6. Share capital

							As at	As at
							30 June 2016	31 December 2015
							(Unaudited)	(Audited)
							£	£
Authorised
Unlimited Ordinary Shares at no par value							-	-
Issued at no par value
97,409,750 (2015: 97,509,750) unlimited Ordinary Shares at no par value							-	-
Reconciliation of number of Shares
							As at	As at
							30 June 2016	31 December 2015
							No. of Shares	No. of Shares
							(Unaudited)	(Audited)
Ordinary Shares at the beginning of the period/year							97,509,750	105,000,000
Purchase of own Shares for cancellation							(100,000)	(7,490,250)
Total Ordinary Shares in issue at the end of the period/year							97,409,750	97,509,750
							As at	As at
							30 June 2016	31 December 2015
							Share Capital	Share Capital
							(Unaudited)	(Audited)
							£	£
Share Capital at the beginning of the period/year							93,746,629	102,900,000
Purchase cost of own Shares for cancellation							(120,480)	(9,153,371)
Total Share Capital at the end of the period/year							93,626,149	93,746,629

The Share Capital of the Company consists of an unlimited number of Ordinary Shares of no par value.

Ordinary Shares

The Company has a single class of Ordinary Shares which were issued by means of an initial public offering on 14 May 2013, at 100 pence per Share.

The rights attaching to the Ordinary Shares are as follows:

a)     the holders of Ordinary Shares shall confer the right to all dividends in accordance with the Articles of Incorporation of the Company.

b)    the capital and surplus assets of the Company remaining after payment of all creditors shall, on winding-up or on a return (other than by way of purchase or redemption of own Ordinary Shares) be divided amongst the Shareholders on the basis of the capital attributable to the Ordinary Shares at the date of winding up or other return of capital.

c)     the Shareholders present in person or by proxy or (being a corporation) present by a duly authorised representative at a general meeting has, on a show of hands, one vote and, on a poll, one vote for every Share.

d)    On 20 March 2017, being 56 days before the Realisation Date, the Shareholders are entitled to serve a written notice (a “Realisation Election”) requesting that all or a part of the Ordinary Shares held by them be redesignated to Realisation Shares, subject to the aggregate NAV of the continuing Ordinary Shares on the last business day before the Reorganisation Date being not less than £50 million. A Realisation Notice, once given is irrevocable unless the Board agrees otherwise. If one or more Realisation Elections are duly made and the aggregate NAV of the continuing Ordinary Shares on the last business day before the Realisation Date is less than £50 million, the Directors may propose an ordinary resolution for winding up of the Company and may pursue a liquidation of the Company instead of splitting the Portfolio into the Continuation Pool and the Realisation Pool.

Share buy-back and cancellation

During the period ended 30 June 2016, the Company purchased 100,000 (period ended 30 June 2015: 4,436,250) of its own shares at a consideration of £120,480 (period ended 30 June 2015: £5,796,578) under the share buy-back authority originally granted to the Company in 2014 and was renewed for a further three month period based on a resolution by the Board on 12 November 2015. These shares have been subsequently cancelled.

Realisation opportunity

The Company will offer all Shareholders the right to elect to realise some or all of the value of their Ordinary Shares, less applicable costs and expenses, on or prior to the Realisation Date.

Subject to the aggregate Net Asset Value of the continuing Ordinary Shares at the close of business on the last Business Day before the Realisation Date being not less than £50 million, the Ordinary Shares held by the Shareholders who have elected for Realisation will be redesignated as Realisation Shares and the Portfolio will be split into two separate and distinct Pools namely the Continuation Pool (comprising the assets attributable to the continuing Ordinary Shares) and the Realisation Pool (comprising the assets attributable to the Realisation Shares).

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

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

If the weighted average discount on the Portfolio is less than 25 per cent. over any 90 day period, then the Directors shall propose an ordinary resolution for the winding up of the Company. If one or more Realisation Elections are duly made and the Net Asset Value of the continuing Ordinary Shares at the close of business on the last Business Day before the Reorganisation Date is less than £50 million, the Directors may propose an ordinary resolution for the winding up of the Company and may pursue a liquidation of the Company instead of splitting the Portfolio into the Continuation Pool and the Realisation Pool.

7. Related party transactions and Material Agreements

Related party transactions

a)     Directors Remuneration and expenses

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

The annual Directors’ fees comprise £26,000 (period ended 30 June 2015: £26,000) payable to Mr Crighton, the Chairman, £22,000 (period ended 30 June 2015: £22,000) to Mr Coe as Chairman of the Audit Committee and £20,000 (period ended 30 June 2015: £20,000) to Mr King.

During the period ended 30 June 2016, directors fees of £34,000 (period ended 30 June 2015: £34,000) were charged to the Company and £17,000 (as at 30 June 2015: £17,000) remained payable at the period end.

b)     Shares held by related parties

The Directors who held office at 30 June 2016 and up to the date of this Report held the following numbers of Ordinary Shares beneficially:

					As at 30 June 2016 (Unaudited)		As at 31 December 2015 (Audited)
					Ordinary	% of issued	Ordinary	% of issued
					Shares	share capital	Shares	share capital
Norman Crighton					20,000	0.02%	20,000	0.02%
Stephen Coe					10,000	0.01%	10,000	0.01%
Robert King					15,000	0.02%	15,000	0.02%

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

As at 30 June 2016, Dr. Andrew Weiss and his immediate family members held an interest in 6,460,888 (as at 31 December 2015: 6,427,550) Ordinary Shares representing 6.63 per cent (as at 31 December 2015: 6.59 per cent) of the issued share capital of the Company.

As at 30 June 2016, employees of the Investment Manager, their respective immediate family members or entities controlled by them or their immediate family members held an interest in 2,718,733 (as at 31 December 2015: 2,718,733) Ordinary Shares representing 2.79 per cent (as at 31 December 2015: 2.79 per cent) of the issued share capital of the Company.

Material Agreements

c)     Investment Management Fee

The Company’s Investment Manager is Weiss Asset Management LP. In consideration for the services provided by the Investment Manager under the Investment Management Agreement dated 8 May 2013, the Investment Manager is entitled to an annual management fee of 1.5% of the Company’s NAV accrued daily and payable within 14 days after each month end. The management fee is subject to a minimum annual amount of £1 (one) million per annum for the first 48 months following Admission. The Investment Manager is also entitled to reimbursement of certain expenses incurred by it in connection with its duties.

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

During the period ended 30 June 2016, investment management fees and charges of £963,790 (period ended 30 June 2015: £990,560) were charged to the Company and £163,425 (as at 30 June 2015: £164,490) remained payable at the period end.

8. Fair value measurement

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

The three levels of the fair value hierarchy under IFRS 13 are set as follows:

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

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

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

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

The following table presents the Company's financial assets and liabilities by level within the valuation hierarchy as of 30 June 2016:

								Total
								30 June
					Level 1	Level 2	Level 3	2016
								(Unaudited)
					£	£	£	£
Financial assets at fair value through
profit or loss:
Korean preferred shares					131,606,863	-	-	131,606,863
Korean Exchange Traded Fund					5,207,251	-	-	5,207,251
Total assets					136,814,114	-	-	136,814,114

The following table presents the Company's financial assets and liabilities by level within the valuation hierarchy as of 31 December 2015:

								Total
								31 December
					Level 1	Level 2	Level 3	2015
								(Audited)
					£	£	£	£
Financial assets at fair value through
profit or loss:
Korean preferred shares					122,775,669	-	-	122,775,669
Total assets					122,775,669	-	-	122,775,669

The Company recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between levels during the period.

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include Korean preference shares and Exchange Traded Funds.

The Company held no Level 2 or 3 investments as at or during the period ended 30 June 2016 (year ended 31 December 2015: nil).

9. NAV reconciliation

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

					As at 30 June 2016 (Unaudited)		As at 31 December 2015 (Audited)
						NAV per		NAV per
						Participating		Participating
					NAV	Share	NAV	Share
					£	£	£	£
Net Asset Value reported to the LSE					141,126,758	1.4488	129,304,862	1.3261
Adjustment for dividend income					249,864	0.0026	1,837,916	0.0188
Net Assets Attributable to Shareholders per Financial Statements					141,376,622	1.4514	131,142,778	1.3449

The published NAV per Share of £1.4488 (31 December 2015: £1.3261) is different from the accounting NAV per Share of £1.4514 (31 December 2015: £1.3449) due to the adjustments noted in the table above.

10. Subsequent events

These Condensed Financial Statements were approved for issuance by the Board on 6 September 2016. Subsequent events have been evaluated until this date.

At the AGM held on 27 July 2016, the Board approved the adoption of the new Articles of Incorporation in accordance with Section 42(1) of the Law.

On 27 July 2016, the Shareholders granted the Company a general buy-back authority of up to 40% of the Company's issued share capital. On the same date, the Company re-appointed N+1 Singer Advisory LLP to manage the Close Period Buy-Back Programme to buy back ordinary shares within certain pre-set parameters. Any shares purchased in the Close Period Buy-Back Programme will count towards the Company's share buy-back authority of 40% of the Company's issued share capital, as approved at the Company's AGM.

At the date of this half-yearly financial report, the Company has 97,409,750 Ordinary shares in issue.

No further subsequent events have occurred.