Preliminary Announcement
Acorn Income Fund Ld
24 March 2004
ACORN INCOME FUND LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003
CHAIRMAN'S STATEMENT
I am pleased to present to Shareholders the fifth Annual Report of the Company for the year
ended 31 December 2003.
During the early part of the year, the value of the Company's investments fell sharply as
uncertainties ahead of the conflict in Iraq were at their greatest. The Company recorded a
month end low net asset value ('NAV') per share of 72.42p as at 31 March 2003, a drop of 16
per cent. on the NAV at 31 December 2002 and the market price of the Shares reached a low point
of 50.5p on 4 April 2003. The ending of the war in Iraq coupled with an improving economic
scene in the UK produced a significant recovery from these lows particularly from the Small
Companies Portfolio. As at 31 December 2003, the NAV per share stood at 126.12p, a rise of 46
per cent. during the year and the market share price had recovered to 103.75p. In addition,
the Company paid quarterly dividends totalling 7p per share which, together with the special
dividend declared just prior to the end of the year, made a total dividend of 9p per share for
the year (2002: 12p per share).
As at 29 February 2004, the NAV per share had continued to improve rising to 135.68p per share
and the market share price had climbed to 120.50p, a significant discount compared to the small
premium that prevailed during the first three years of the Company's life. Total return per
share of 48.75p is creditable and compares favourably with the poor result of 2002.
In September 2003, a circular was posted to Shareholders seeking authority, inter alia, to
allow the Company to buy back for cancellation up to 14.99 per cent. of the issued Ordinary
Shares. This proposal was approved at a Shareholder meeting held on 24 October 2003. This
authority is now available to the Board and will be used to improve value for continuing
Shareholders. At the same time, Shareholders also approved the change in investment policy
with regard to the composition of the High Income portfolio and the Investment Adviser is
gradually implementing this change. While the change in the investment policy adopted for the
High Income portfolio is likely to lead to a lower income, the Board believes that the capital
allocated to the High Income portfolio will be less at risk than was formerly the case, whilst
still enabling the overall objectives to be met.
The Board is also aware of the recent publication by the UK's Financial Services Authority ('
FSA') of the Investment Entities (Listing Rules and Conduct of Business) Instrument 2003 (the '
Instrument') which may have an impact on your Company. From 1 April 2005, the Chairman and the
majority of the Board must be 'independent'. To be classed as independent under the Listing
Rules, a Director must not, amongst other things, be a director of another investment company
managed by the same investment manager. The Board will in due course be addressing this issue
to ensure compliance.
It is a further requirement of the Instrument that the Directors state whether, in their
opinion, the continuing appointment of the Manager on the terms agreed is in the interests of
the Shareholders as a whole. This is dealt with in the Report of the Directors on page 9 and
the Board, after due consideration, has endorsed the continued appointment of the Manager and
the Investment Advisers on their current terms.
During the year John Tibbo announced that he wished to retire due to other commitments. John
had served the Company from its inception in early 1999 and I wish to place on record our
thanks for the hard work and wise counsel he brought to the deliberations of the Board, and as
Chairman of the Audit Committee.
John Boothman has been appointed to the Board and we look forward to receiving the benefit of
his knowledge and experience gained in a variety of roles in the financial services sector in
the Channel Islands.
After a particularly difficult beginning, 2003 proved to be a year of significant growth for
your Company. The Smaller Companies portfolio is very well placed to take advantage of an
expected upturn in the prospects for industrial companies. Similarly, the High Income
portfolio is gradually being aligned into a more secure asset category than had previously been
the case. The Board believes that the Company will continue to meet its investment objectives.
D.M. Bralsford
24 March 2004
INVESTMENT ADVISER'S REPORT - SMALLER COMPANIES PORTFOLIO
At the time of our last annual report we believed that more stable market conditions would lead
to an improved capital performance. This has certainly been the case.
We have also benefited from our concentration on the industrial and business services sectors
of the economy. We remain sceptical of the consumer sectors of the economy particularly when
faced with the prospects of further rises in base rates.
During the past year a number of our companies share prices have performed exceptionally well.
Robert Walters, the recruitment agency has been our star performer. Significant gains were also
made from our investments in VP Group, Diploma, BSS Group, Pendragon and Syltone.
Corporate activity has begun to feature in the market and Syltone and Blick have been sold to
corporate buyers. Wintrust has engaged advisers to consider its potential sale. Pendragon has
also been active with its recently announced proposed acquisition of CD Bramall.
We have retained many of our investments for a considerable time and as a result have enjoyed a
healthy flow of rising dividends. We have sought new investments that offer good growth
potential together with attractive yields. During the past 12 months, we have increased our
exposure to the electronics sector with investments in Renishaw, Acal and Abacus. Recent news
from this sector is most encouraging. We have also made an investment in Bespak, the healthcare
company whose share price has performed well since acquisition.
Disposals included Metalrax, DS Smith, Interserve, Heywood Williams, Britannic and Dowding &
Mills. In hindsight we should have held on to Britannic. Not all our investments met our
expectations but if all was perfect Shareholders might ask if we were doing our job.
There is no doubt that the recent performance of the smaller companies sector is attracting new
investors. The recent recovery in business confidence is leading to a much brighter outlook for
many of the companies we own. We believe that the smaller companies portfolio will perform well
during the forthcoming year and look forward to the future with confidence.
P Webb
Unicorn Asset Management Limited
24 March 2004
INVESTMENT ADVISER'S REPORT - HIGH INCOME PORTFOLIO
The ongoing rally in equity markets has continued to enhance prices in split capital
investment trusts, but only modestly. Once again, we have taken the opportunity to further
reduce exposure to the sector in order to re-align the portfolio in accordance with the
change in investment policy sanctioned by shareholders. As a result these investments
account for just 41/2% of the total portfolio value. This process will be ongoing and we
aim to make further sales as and when market liquidity and prices permit.
Turning now to the fixed income markets, having rallied strongly during the period when
investors harboured worries over deflation, with the economic pendulum now swinging back
towards inflation via aggressive central bank policies, bonds are under pressure. In
addition, Western world governments are collectively using new issuance of bonds to plug
short term deficits in their budgets. This is especially noticeable in both the United
States and the United Kingdom where Chancellor Brown's ambitious spending strategy is under
the microscope and looking shaky. In Europe the European Central Bank has expressed concern
at the collapse of the growth and stability pact fearing that the inability of both France
and Germany to keep to the 3% budget deficit rule will undermine confidence in the regions
fiscal outlook.
As the global recovery strengthens and the interest rate cycle begins to shift upwards (it
has already done so in the UK) bond weakness will likely accelerate. However, we do not
envisage a collapse in bond prices but we do expect yields to rise by 1% or so.
Accordingly, we have been gradually building our weighting to bond markets as prices weaken.
This will be central to our strategy over the coming year.
J Goodey
Collins Stewart Asset Management Limited
24 March 2004
This statement of results is not the Group's statutory accounts. The Auditors have reported on the statutory accounts
and have issued an unqualified opinion.
STATEMENT OF TOTAL RETURN
for the year ended 31 December 2003
Revenue Capital Total Revenue Capital Total
2003 2003 2003 2002 2002 2002
Notes £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on 1, 3 - 13,267 13,267 - (10,654) (10,654)
investments
Income 1, 4 3,345 - 3,345 4,185 - 4,185
Management fee 1, 5 (137) (412) (549) (148) (444) (592)
Other expenses 1, 6 (197) - (197) (147) - (147)
Net return / (loss) on
ordinary activities before
finance costs
3,011 12,855 15,866 3,890 (11,098) (7,208)
Interest payable and similar
charges 8 (359) (1,077) (1,436) (382) (1,138) (1,520)
Net return / (loss) on 2,652 11,778 14,430 3,508 (12,236) (8,728)
ordinary activities for the
year
Dividends in respect of
equity shares 9 (2,664) - (2,664) (3,552) - (3,552)
Transfer (from) / to (12) 11,778 11,766 (44) (12,236) (12,280)
reserves
Total return / (loss) per
Ordinary Share 10 8.96p 39.79p 48.75p 11.85p (41.34)p (29.49)p
Dividend per Ordinary Share
(distributed) 9 9.00p - 9.00p 12.00p - 12.00p
The revenue columns of this statement represent the revenue account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
BALANCE SHEET
as at 31 December 2003
2003 2002
Notes £'000 £'000
Fixed assets
Listed investments 1, 11 58,795 50,175
Current assets
Debtors 12 922 419
Cash at bank 3,596 1,052
4,518 1,471
Creditors - amounts falling due within one year
Creditors 13 (366) (465)
Net current assets 4,152 1,006
Total assets less current liabilities 62,947 51,181
Creditors - amounts falling due after more than one year
Long term bank loan 14 (25,616) (25,616)
Net asset value 37,331 25,565
Share capital and reserves
Called-up share capital 15 7,400 7,400
Share premium 16 17,079 27,079
Revenue reserve 16 1,321 1,333
Special reserve 16 10,000 -
Capital reserve 1, 16 1,531 (10,247)
Total shareholders' funds attributable to equity interests 17 37,331 25,565
Net asset value per Ordinary Share 18 126.12p 86.37p
CASH FLOW STATEMENT
for the year ended 31 December 2003
2003 2002
Notes £'000 £'000
Net cash inflow from operating activities 19 2,321 3,646
Servicing of finance
Interest paid (1,568) (1,543)
Net cash outflow from servicing of finance (1,568) (1,543)
Investing activities
Purchase of investments (12,451) (22,093)
Sale of investments 16,906 23,248
Net cash inflow from investing activities 4,455 1,155
Equity dividends paid (2,664) (3,552)
Cash inflow/(outflow) before financing 2,544 (294)
Net cash flow from financing - -
Increase/(decrease) in cash in the year 20 2,544 (294)
NOTES
for the year ended 31 December 2003
1. Accounting policies
The accounting policies, all of which have been applied consistently throughout the year, in the
preparation of the Company's results, are set out below:
a) Accounting convention
The results have been prepared under the historical cost convention, as modified by the revaluation of
investments, and in accordance with applicable United Kingdom accounting standards and with the revised
Statement of Recommended Practice ('SORP'), for Financial Statements of Investment Trust Companies ('ITC'),
issued in January 2003.
b) Investments held as fixed assets
Quoted investments are valued at the mid-market price on the relevant Stock Exchange at the balance sheet
date.
Realised gains or losses on the disposal of investments, permanent impairments in the value of investments
and unrealised gains and losses on the revaluation of investments are taken to the statement of total
return as capital.
c) Income
Dividends receivable on equity shares are taken into account on the ex-dividend date. Income on debt and
fixed interest securities is recognised on an accruals basis. United Kingdom dividend income is shown net
of withholding tax, as this is an irrecoverable expense.
Bank interest is accounted for on an accruals basis.
d) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account
except as follows:
(i) expenses which are incidental to the acquisition or disposal of an investment are treated as part of
the cost or proceeds of the investment;
(ii) 75% of the Company's management fee and financing costs are charged to the capital reserve in line
with the Board's expected long term split of returns between income and capital gains from the
investment portfolio; and
(iii) 100% of any performance fee is charged to the capital account.
e) Capital reserve
The following are accounted for in the capital reserve:
(i) realised gains and losses on the realisation of investments;
(ii) unrealised gains and losses on investments; and
(iii) expenses charged to the capital reserve in accordance with the above accounting policies.
2. Taxation
The Company has been granted exemption from Guernsey taxation under the Income Tax (Exempt Bodies)
(Guernsey) Ordinance 1989 and is charged an annual exemption fee of £600 (2002: £600).
3. Gains/(losses) on investments
2003 2002
£'000 £'000
Realised losses on sales (4,519) (1,640)
Movement in unrealised depreciation 17,786 (9,014)
13,267 (10,654)
4. Income
2003 2002
£'000 £'000
Dividend income 2,889 3,436
Bond interest 285 685
Bank interest 171 64
3,345 4,185
5. Management fees
The Manager of the Company is entitled under the Management Agreement with the Company to receive a
management fee from the Company at the annual rate of 1.0% of the total assets of the Company, payable
quarterly in arrears. Where any investments comprised in the assets of the Company are in funds managed by
or advised by the Manager or Investment Adviser or an affiliate of either of them, the value of such
investments is deducted from total assets for the purposes of calculating the management fee.
In addition, the Manager is entitled to receive a performance fee, payable at the end of each financial
period of the Company, at the rate of 15% of any excess of the net asset value per share over the benchmark
net asset value per share as at the last calculation day in the relevant financial period, multiplied by
the time weighted number of shares in issue within such period. The benchmark net asset value per share is
the higher of 104.8p, compounded at 10% per annum since 31 December 1999, and the highest net asset value
per share as of the last calculation day in any preceding financial period. When calculating the
performance fee, the net asset value per share is reduced by the amount that the dividend per share paid
during that year is less than 8.5 pence. As at 31 December 2003 the benchmark net asset value per share
was 153.43p. No performance fee has been paid in respect of the year ended 31 December 2003 (2002: nil).
The Manager has delegated the obligations for the performance of the investment management services to
Unicorn Asset Management Limited ('the Smaller Companies Investment Adviser') and Collins Stewart Asset
Management Limited . ('the High Income Investment Adviser'). The agreements are between the Investment
Advisers and the Manager, not the Company. All Investment Advisory fees are paid out of the management
fees and performance fees received by the Manager from the Company.
Both Investment Advisers are entitled to receive an annual fee at the rate of 0.5% of the total assets
attributable to the investments in relation to which the Investment Adviser acts. The Smaller Companies
Investment Adviser is entitled to 5/8ths of the Manager's performance fee, while the Manager may, at its
discretion, pay the High Income Investment Adviser a proportion of the remaining performance fee. In
addition, the Smaller Companies Investment Adviser is entitled to receive, from the Manager, a fixed annual
fee of £7,500 in relation to marketing services provided to investors.
The Investment Advisory Agreements may be terminated by the Manager or the Investment Advisers, giving not
less than 12 months' notice in writing, or otherwise in circumstances where one of the parties has a
receiver appointed over its assets or if an order is made or an effective resolution passed for the winding
up of one of the parties. On termination the Investment Adviser shall be entitled to receive all fees
accrued up to the date of the termination (or thereafter if the Investment Adviser necessarily incurs
expenses arising out of the termination of the agreement) but shall not be entitled to compensation, except
in the case of a wrongful termination by the Manager.
6. Other expenses
Revenue Capital Total Revenue Capital Total
2003 2003 2003 2002 2002 2002
£'000 £'000 £'000 £'000 £'000 £'000
Custody and
settlement fees 33 - 33 36 - 36
Auditors' 8 - 8 8 - 8
remuneration
Directors' 33 - 33 30 - 30
remuneration
Other expenses 123 - 123 73 - 73
197 - 197 147 - 147
7. Directors' remuneration
2003 2002
£'000 £'000
David Martin Bralsford 13 12
John Michael McKean 10 9
John Claude Tibbo 8 9
John Boothman 2 -
33 30
No bonus or pension contributions were paid or payable on behalf of the Directors
Shane Le Prevost waived his rights to his Director's fee for the year (2002: nil).
8. Interest payable and similar charges
The interest payable relates to interest due on the bank loan, details of which are disclosed in note 14.
9. Dividends in respect of equity shares
2003 2002
£'000 £'000
Dividends on Ordinary Shares:
First interim paid of 1.50p (2002: 3.00p) 444 888
Second interim paid of 1.50p (2002: 3.00p) 444 888
Third interim paid of 2.00p (2002: 3.00p) 592 888
Special dividend paid of 2.00p (2002: nil) 592 -
Fourth interim paid of 2.00p (2002: 3.00p) 592 888
2,664 3,552
10. Return per Ordinary Share
The revenue return per Ordinary Share is based on net revenue of £2,651,754 (2002: £3,508,519) and on a
weighted average number of 29,600,002 (2002: 29,600,002) Ordinary Shares in issue throughout the year. The
capital gain/loss per Ordinary Share is based on the net capital gain of £11,778,236 (2002: loss of
£12,236,432) and on a weighted average number of 29,600,002 (2002: 29,600,002) Ordinary Shares in issue
throughout the year.
11. Listed investments
Smaller High Income Smaller High Income
Companies Portfolio Companies Portfolio
Portfolio Total Portfolio Total
2003 2003 2003 2002 2002 2002
£'000 £'000 £'000 £'000 £'000 £'000
Opening valuation 41,091 9,084 50,175 47,217 14,828 62,045
Purchases at cost 5,937 6,514 12,451 15,285 6,808 22,093
Sales - proceeds (10,623) (6,475) (17,098) (17,324) (5,985) (23,309)
- realised
(losses)/gains (2,136) (2,383) (4,519) 701 (2,341) (1,640)
Movement in
unrealised
appreciation /
(depreciation) 15,655 2,131 17,786 (4,788) (4,226) (9,014)
Closing valuation 49,924 8,871 58,795 41,091 9,084 50,175
Closing book cost 37,215 15,775 52,990 44,037 18,119 62,156
Closing unrealised
appreciation/
(depreciation) 12,709 (6,904) 5,805 (2,946) (9,035) (11,981)
Closing valuation 49,924 8,871 58,795 41,091 9,084 50,175
Previously recognised as unrealised appreciation/depreciation
Realised (losses)/
gains attributable
to current year (362) (102) (464) 621 (631) (10)
Amounts previously
recognised as
unrealised
(appreciation)/
depreciation on
these sales
(1,774) (2,281) (4,055) 80 (1,710) (1,630)
Gains/(losses)
realised on
investments sold (2,136) (2,383) (4,519) 701 (2,341) (1,640)
12. Debtors
2003 2002
£'000 £'000
Accrued income 648 342
Amounts due from brokers 254 61
Other debtors 20 16
922 419
13. Creditors - amounts falling due within one year
2003 2002
£'000 £'000
Management fee 155 127
Bank interest 169 301
Other creditors 42 37
366 465
14. Long term bank loan
2003 2002
£'000 £'000
Bank of Scotland Offshore facility 25,616 25,616
Under loan agreements dated 28 September 1999 and 21 December 2000 between the Company and Bank of Scotland
Offshore, a term loan of £25,616,000 has been made available. The interest rates payable on the loan are
based on LIBOR plus a margin of 1% plus Mandatory Liquid Asset ('MLA') costs and are fixed as follows:
2003 2002
£'000 £'000
Fixed until 28/05/04 at 5.327% (2002: 30/05/03 at 5.225%) 5,000 5,000
Fixed until 27/10/04 at 8.285% (2002: 27/10/04 at 8.285%) 5,000 5,000
Fixed until 27/10/04 at 5.636% (2002: 30/04/03 at 5.075%) 5,000 5,000
Fixed until 30/09/05 at 5.445% (2002: 31/03/03 at 5.075%) 5,616 5,616
Fixed until 09/12/05 at 5.885% (2002: 30/07/03 at 5.165%) 5,000 5,000
25,616 25,616
The average cost of borrowings at the year end was 5.60% (2002: 5.75%).
15. Share capital
2003 2002
£'000 £'000
Authorised:
40,000,000 Ordinary Shares of 25p 10,000 10,000
Allotted, called up and fully paid:
29,600,002 Ordinary Shares of 25p 7,400 7,400
16. Reserves
Share premium Revenue reserve Special Capital reserve
account reserve Total
£'000 £'000 £'000 £'000 £'000
At 1 January 2003 27,079 1,333 - (10,247) 18,165
Movement for the year (10,000) (12) 10,000 11,778 11,766
At 31 December 2003 17,079 1,321 10,000 1,531 29,931
On 24 October 2003, in the Royal Court of Guernsey, the Company cancelled part of its share premium
account transferring £10,000,000 to a distributable reserve to allow the buy-back and cancellation of up
to 14.99 per cent of the Ordinary Shares.
17. Reconciliation of movements in Shareholders' funds
2003 2002
£'000 £'000
Balance as at 1 January 25,565 37,845
Capital surplus/(deficit) for the year 11,778 (12,236)
Revenue return for the year 2,652 3,508
Dividends paid (3,552)
(2,664)
Balance as at 31 December 37,331 25,565
18. Net asset value per Ordinary Share
2003 2002
pence pence
Opening net asset value per Ordinary Share 86.37 127.86
Total return/(loss) per Ordinary Share 48.75 (29.49)
Dividend per Ordinary Share (9.00) (12.00)
Closing net asset value per Ordinary Share 126.12 86.37
The net asset value per Ordinary Share is based on the net assets attributable to equity
Shareholders of £37,330,868 (2002: £25,564,878) and on 29,600,002 (2002: 29,600,002)
Ordinary Shares in issue at the end of the year.
19. Reconciliation of net revenue return before finance costs and taxation to net cash
inflow from operating activities
2003 2002
£'000 £'000
Net revenue return before finance costs and taxation 3,011 3,890
Management fee charged to the capital reserve (412) (444)
(Increase)/decrease in accrued income (306) 206
Increase in other debtors (5) (9)
Increase in other creditors and accruals 33 3
Net cash inflow from operating activities 2,321 3,646
20. Reconciliation of net cash flow to net debt
At 1 January 2003 Cash flows At 31 December 2003
£'000 £'000 £'000
Cash at bank and in hand 1,052 2,544 3,596
Debt due after more than one year (25,616) - (25,616)
Total (24,564) 2,544 (22,020)
21. Capital commitments
All contracted capital commitments have been provided for.
22. Related parties
Details of the relationship between the Company, Collins Stewart Fund Management Limited,
Collins Stewart Asset Management Limited and Collins Stewart (CI) Limited are disclosed in
the Report of the Directors.
The Directors are not aware of any ultimate controlling party.
23. Risk profile of financial assets and liabilities
Financial Summary
The principal investment objectives of the Company are to provide Shareholders with a high income and
also the opportunity for income and capital growth by investing primarily in smaller capitalised United
Kingdom companies admitted to the Official List of the United Kingdom Listing Authority and traded on
the London Stock Exchange or traded on AIM.
The Company's portfolio is invested in equities and high income and fixed interest and other
income-bearing securities in order to achieve its investment objectives. It is the aim of the Company
to provide both income and capital growth predominantly through investment of approximately 75% of the
portfolio in smaller capitalised United Kingdom companies. The Company also aims to further enhance
income for Shareholders by investing approximately 25% of its assets in a Sterling denominated
investment grade fixed interest bond portfolio. It is no longer the policy of the Company to invest in
ordinary shares and income shares of split capital investment trusts nor lower grade fixed interest
Sterling denominated debt and convertibles, (following a change in investment policy as detailed in a
circular to shareholders dated 8 September 2003). At 31 December 2003, 77.92% of the portfolio related
to the smaller companies portfolio.
In addition, the Company holds cash and liquid resources as well as having debtors and creditors that
arise directly from its operations.
The main risks arising from the Company's financial instruments are market price risk, interest rate
risk and liquidity risk. As all the assets and liabilities of the Company are denominated in Sterling,
there is no currency risk.
Market price risk
The Company's exposure to market price risk consists mainly of movements in the value of the Company's
investments. The Company's investment portfolio complies with the investment parameters as disclosed in
its prospectus and the spread of the principal investments is disclosed on pages 6 and 7.
The magnitude of any change in the net asset value of the portfolio arising from market price movements
is increased by the Company's policy of employing gearing. A 10% increase / decrease in the market
prices of investments would have resulted in a 15.75% (2002: 19.63%) increase / decrease in the net
asset value per Ordinary Share as at the balance sheet date.
Interest rate risk
The Company finances its operations through a mixture of shareholders' capital, bank borrowings and
retained profits. Bank of Scotland Offshore has made available a term loan of up to £25,616,000. The
interest payable under the facility is fixed at regular intervals based on the aggregate rate of LIBOR
plus certain additional regulatory costs charged by the bank and a margin of 1.0% per annum (see note
14).
Liquidity risk
The Company entered into a loan agreement with Bank of Scotland Offshore, under which Bank of Scotland
made available a loan of £25,616,000 (see note 14). The terms of the Company's bank borrowings entitle
the lender to require early repayment should the Company breach any of the covenants placed upon it by
Bank of Scotland.
The Company's liquidity is monitored regularly to ensure that the covenants are not breached.
Certain of the Company's investments are or may be illiquid, and the marketability of investments that
are normally liquid may be affected by unsettled market conditions.
Interest rate risk - profile
The Company's financial fixed assets comprise a fixed interest portfolio of £6,273,565 (2002:
£5,283,240) which yields a weighted average interest rate of 8.97% (2002: 10.21%) fixed for a weighted
average period of 6.44 years (2002: 1.10 years).
The balance of the investment portfolio consists of non-interest bearing investments of £52,521,295
(2002: £44,891,784).
The Company's other exposure to interest rate risk arises through its long term loan, details of which
are given in note 14.
Financial assets
Non-interest Fixed Floating Total Non-interest Fixed Floating Total
bearing rate rate bearing rate rate
2003 2003 2003 2003 2002 2002 2002 2002
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Equity
shares
52,521 - - 52,521 44,892 - - 44,892
Debt
investments - 6,274 - 6,274 - 5,283 - 5,283
Cash at - - 3,596 3,596 - - 1,052 1,052
bank
52,521 6,274 3,596 62,391 44,892 5,283 1,052 51,227
The above analysis excludes short-term debtors as all the material amounts are non-interest
bearing.
Fixed rate financial assets
Weighted Weighted average Weighted Weighted average
average rate period average period
rate
2003 2003 2002 2002
% Years % Years
Debt investments 8.97 6.44 10.25 1.08
Financial liabilities
Fixed rate financial Fixed rate financial
liabilities liabilities
2003 2002
£'000 £'000
Long term bank loan 25,616 25,616
The above analysis excludes short-term creditors as all the material amounts are
non-interest bearing.
If you have any queries please contact:
Andrew Duquemin
2nd Floor
No 1 Le Truchot
St Peter Port
Guernsey GY1 4AE
Tel: 01481 731 987
Fax: 01481 720 018
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