ANNUAL FINANCIAL REPORT
Copies of the Annual Report and Financial Statements for the year ended 30 June 2010 have been submitted to the UK Listing Authority and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
Tel: +44 (0)20 7066 1000
The Annual Report and Financial Statements for the year ended 30 June 2010 including the Notice of Annual General Meeting is also available on Mid Wynd's page of the Baillie Gifford website at:
The unedited full text of those parts of the Annual Report and Financial Statements for the year ended 30 June 2010 which require to be published by DTR 4.1 is set out on the following pages.
Baillie Gifford & Co
Company Secretaries
19 August 2010
CHAIRMAN'S STATEMENT
Performance
In the year to 30 June 2010, net asset value per share rose by 29.8% to 1,008.2p per share, the share price increased 39.0% to 935.0p and the FTSE World Index in sterling terms rose by 19.9%. The improvement in performance shown in the second half of last year continued as markets rebounded and Mid Wynd did indeed, as we hoped last year, manage to make hay as the sun shone. NAV per share reached a new high of 1,113.8p in mid April. In the final two months of our year it ebbed by 9.5% from its peak as data have unveiled a slowing in the pace of economic growth, a still somewhat jobless West and the levelling out of corporate earnings expectations albeit at impressive levels. All of this is a vast improvement on the drama and shock endured in late 2008 and early 2009. There is relatively little mention today of systemic fears over banking systems and, instead, some focus on a handful of minor sovereigns' solvency problems. Governments have taken the debt burden upon themselves. Some are weighed down more than others in consequence. If this appears novel to our generation, it is scarcely unknown to former ones. Despite the widening of some sovereign and corporate credit spreads, the spectre of inflation remains a pale shadow and most government bond yields have steadily fallen in the face of rapidly rising stocks of debt. This we did not anticipate, and continue to mistrust. We hope that government bonds are not a balloon in search of a pin, for that would have adverse consequences across most asset classes.
Having bemoaned the failure of our bond holdings to cushion us against the downturn in markets last year it seems only symmetrical to point out that our bond portfolio, largely the same bond portfolio, outperformed those same equities this year in a rising market. CQS, Lloyds contingent convertibles and the Athena distressed debt fund are at the root of this phenomenon and are discussed in the Managers' review.
Earnings and dividend
Earnings of 16.85p per share compare with 16.26p per share from the year to June 2009. Despite dismal levels of interest on deposit and generally low cash levels together with a steadily falling bond allocation, revenues were strong. This reflects a few large individual features (Seadrill, Marine Harvest, Kone). Against our expectations of last year, therefore, we find ourselves once more with a rising stream of dividends to report. Given the extent of sales from the bond portfolio, however, this is unlikely to continue.
A final dividend of 9.0p is recommended, taking the full year total to 15.5p per share, an increase of 3.3% on last year.
Discount and share buybacks
The discount narrowed from 13.4% to 7.3% over the course of the year. The Board considers the level of discount on a regular basis and has authorised the repurchase of shares when this will be of benefit to continuing shareholders as well as being in the interest of those shareholders who may need to sell some or all of their shares.
CHAIRMAN'S STATEMENT (Ctd)
During the year to 30 June 2010 the Company utilised its authority to repurchase its own shares for the first time, buying back 65,000 shares for cancellation at a cost of £616,000. At the Annual General Meeting of the Company to be held on 22 September 2010 the Board will seek to renew the buyback authority and extend it to permit shares bought back to be held in treasury, for reissue or cancellation at a later date.
Outlook
The long run challenges faced by developed economies have changed little over the past year. Massive stimulus and record low interest rates have produced a so far tepid recovery in end demand and a sparkling recovery in asset markets. A surprisingly wide range of possible prognoses jostle for space, with debt deflation at one end and high inflation at the other. The distribution of probabilities seems unusually widely dispersed within this wide range of possible outcomes. Fiscal retrenchment is being flamboyantly deployed to support confidence in public finances and enable monetary policy to remain loose. This is something of a high wire act.
Here is a synopsis of plausible (but not exclusive) scenarios for the indebted West recently provided by HSBC's chief economist:
1. The 'theological' option: fiscal deficit problems are all cyclical, not structural. Nominal growth will thereby solve everything.
2. Austerity: people mostly dislike it enough to vote against it, and too much of it is self defeating. Ask the IMF. Or Argentina. Or Greece. The few examples that have historically succeeded - Sweden in the early '90s is routinely run out - have benefitted from one or more of the following co-drivers : devaluation, falling global bond yields, falling inflation, a leveraging up in the private sector, a booming global economy. It is hard to be hopeful that many of these may be with us in combination starting from here.
3. Japanese-style deflation: tolerable in retaining the stability of real per capita GDP. This path only works for an aged society with a loathing of change where, critically, domestic savings are large enough to support an increasingly bust government. Buys some time but, like debt and inflation, borrows from future generations. Not open to many. Would seem to make the underlying problem worse not better.
4. Default by stealth: negative real interest rates and rising inflation - baby-boomers liked it when they were in debt; they may well not now they are the savers.
5. Devaluation: only to be attempted if your debt is largely in your own currency. Not a game for multiple players simultaneously.
6. Outright default: all that remains after these other possibilities have been exhausted.
CHAIRMAN'S STATEMENT (Ctd)
Happily for our shareholders, we believe we have more choices than just these available to us. There are many more people in today's world who are experiencing or ought soon to experience vastly improved prospects for themselves and their children than there are those who find themselves under-skilled, over-aged, increasingly without the welfare safety net they expected and mired in debt. That this is so owes in large part to globalisation, industrialisation, education and productivity.
Despite the vicissitudes of short term policy tightening, real strength and potential resides in those such as Chinese, Indian, Indonesian, Turkish and Brazilian consumers. As yet it is largely untapped. Real interest rates in these countries remain high, though mainly falling across recent cycles, and access to credit is still constrained. Should this change, as seems a reasonable 10 year expectation, we plan to be beneficiaries of such a continued coming of age. Looking through the oddity of where stocks are listed and concentrating more on where our businesses and their customers actually are, the effective exposure to this change is closer to half or 60% of our assets than the one third or so that derives from the listings data. I would confess to wondering at times whether this is yet sufficiently bold.
Separately, given the febrile nature of markets, ongoing private sector de-leveraging and a lingering spirit of trepidation after the events of late 2008 and early 2009, it seems to us there is a range of attractive unusual, neglected, illiquid or unloved investments across a span of end markets. Litigation finance, life settlements and turnaround funds are examples of this. Many face individual challenges or uncertainties that are fairly specific to their own circumstances. Some throw up a wide range of potential outcomes. All would seem to offer exploitable degrees of mispricing of the opportunities each holds for investment returns.
Patrick MS Barron
5 August 2010
MANAGERS' PORTFOLIO REVIEW
The portfolio
Bonds have shrunk to 5% of assets following net sales. Our hurricane bond, Vega, appreciated as we had hoped and had little further upside to offer. Lloyds' Bank Saphir non cumulative preferred shares were converted to 'co-co' bonds, resulting in a trebling of value from depressed levels and a subsequent sale. CQS Rig Finance Fund's NAV rose from minus 3p and suspension to 25p; we quadrupled our holding in the shares when they re-quoted following negotiations with their bankers on interest terms and debt covenants. Athena, the distressed securitised debt fund, saw its NAV rise 70% or so from a trough (at which we added to the holding) as senior tranches of securitised debt pools have accumulated a dominant share of cash flows into these vehicles and confidence has returned a modicum of liquidity to this market.
Largest equity holdings
Level E Maya Fund
This is a new investment which has two parts. The holding in the fund represents our contribution to seeding a fund that uses algorithmic trading strategies derived from the work of an Edinburgh University based team of experts in artificial intelligence. The second element is an option based on the fund investment granting the Company the right to acquire 6.25% of the underlying intellectual property or technology company and its sister asset management company.
The option is for a five year term, for a fixed share in the capital of both companies as at the time of exercise, and at a fixed exercise price of $1.25m. We paid nothing for the option and it is consequently held at a zero valuation at this early stage of the Level E companies' lives.
OGX Petróleo e Gás Participacoes
A Brazilian exploration and production company holding valuable offshore acreage familiar from last year's report. The Company increased its position over the year, and the share price has also appreciated alongside favourable news. A strategy of employing the retiring senior geologist at Petrobras, the national oil giant, appears to be paying off handsomely with an 89% drilling success rate to date in those areas where the group has won bids.
Kone
The elevator business is a stable, disciplined, fairly fast growing industry with highly attractive financial characteristics. Maintenance, service and upgrade revenues provide a core source of strength and recurrence. Global industrialisation and urbanisation trends drive underlying demand for new lifts. Strong cash flows deployed in acquiring sub-scale maintenance portfolios as contiguous in-fills to the core business are another worthwhile feature. Significant family ownership and involvement offers the benefit of long term alignment of purpose between controllers and shareholders. Schindler, another significant holding for the Company, enjoys the same strengths. Both have been and remain core long term holdings.
MANAGERS' PORTFOLIO REVIEW (Ctd)
Ocean Wilsons
The valuation derives from two parts. First, the underlying Brazilian marine business - a traditional franchise in tug boats, container terminals and platform supply vessels. Second, an investment portfolio with a strong long run record of real total returns. Both elements have done very well on average over many years now. The whole remains available in the stock market at a very large discount to the public market value of its two halves.
Eldorado Gold
This is a low cost gold producer with experienced, successful, down to earth management, assets in China, Turkey and Brazil and which offers rising production and growth potential alongside its underlying exposure to gold itself. Gold is of interest separately in relation to the risk of scenarios 4 and 5 mentioned in the Chairman's Statement.
China Merchants Bank
Markets have expended considerable energy worrying about the Chinese banking system. This was so prior to and during the unanticipated collapse of our own and appears to remain the case still. We are impressed by the combination of strong and rational demand for credit from the banks' customers, still more by the potential for future similar demand and also by the strength of its balance sheet combined with strong, effective regulation and systemically high margins.
Vision Opportunity China Fund
VOC provides growth capital to a small number of rapidly growing, largely unlisted and family controlled Chinese concerns. These operate across a breadth of domestic industries. In return, VOC attains significant equity in these businesses and helps them to list on the NASDAQ market in the US. Following this primary cycle, the fund's capital is then steadily redeployed in a fresh round of unlisted, immature growth businesses. This process has been both operationally successful for the firms and highly rewarding for the fund, with NAV doubling in the first two years since listing in late 2007 versus a decline of some 30% in the main Chinese stock indices.
Odontoprev
This is the leading Brazilian dental plan company that acquired its nearest competitor at the end of 2009. The resulting group has a dominant market position in a highly immature and under-penetrated industry in a young country with rapidly growing incomes. Dental plans quickly become high margin, cash generative operations if customer service and retention is cemented, and Odontoprev has undertaken to return nearly all profits to shareholders. The company should have no difficulty in funding itself despite this high dividend payout while continuing to grow rapidly.
MANAGERS' PORTFOLIO REVIEW (Ctd)
Seadrill
Recent events in the Gulf of Mexico have thrown the world of deep water drilling into turmoil. Seadrill has a brand new industry-leading fleet, a portfolio of contracts termed out to 2013, a secure stream of cash flows therefore and a double digit dividend yield. Most likely, at some point, there will be an opportunity to further consolidate its industry. We expect that deep water oil recovery, whether offshore Brazil, offshore West Africa, Gulf of Mexico or from extreme regions North and South, will form a critical element in meeting energy demands over the coming twenty years or so despite growing incentives to accelerate research into alternative fuels.
Reinet
This is the Rupert family holding company, spun out of Richemont and comprised of a substantial holding in BAT and investments made from cash and the dividend stream from those BAT shares. Having appreciated significantly from spin out, it still stands at a moderate discount to its NAV and mainly depends upon the skill with which investments are made for any future outsize returns. The acquisition of forward commitments from a distressed Lehman private equity fund bodes well in this regard we believe.
Better Capital
An opportunistic fund pioneered, managed and invested in by Jon Moulton, whose specialism is in turning around bankrupt or distressed companies. Regrettably, we anticipate there will be much work to be done in this area over coming years in the UK.
ASOS
This is an online clothes retailer, the name of which stands for As-Seen-On-Screen, and that has an enthusiastic and rapidly growing base of customers in the UK. The business model, which should transfer to other geographies, is somewhere between Amazon and Zara and we are taken both by its prospects and its recent ability to trade very successfully during a difficult period for UK consumers and bricks and mortar retailers.
Healthspring
A very tightly managed, low cost American provider of health insurance services. The valuation had been held back by gloom concerning President Obama's healthcare rhetoric when we started buying the shares. We feel that Healthspring, like another large holding, Medco, is more part of the cost and service solution than part of the problem. Despite the incompetence of reforms so far, we might expect to see this edge translate into worthwhile earnings growth.
Falkland Oil and Gas
We invested in this wildcat oil explorer with interesting acreage in the South East Falklands basin and a very strong partner in BHP. The shares performed very strongly in the run up to the drilling campaign and we disinvested progressively into this strength. Our intention had always been to try to remove our initial stake whilst leaving a remaining holding to run through the drilling campaign. As it has turned out, we have managed rather better than that.
MANAGERS' PORTFOLIO REVIEW (Ctd)
Following the initial Toroa results, however, which were disappointing, we felt that the option value ascribed to Loligo, the remaining prospect, was over-estimated and have sold the small balance of our holdings, still at a profit though at a lesser one.
Transactions
There are a few clear thematic influences though most ideas are very specific to their own unique prospects. The Company built up a basket of biotech holdings for reasons covered in the interim report. The three internal Baillie Gifford OEICs have steadily been sold down as individual ideas have come in to replace them. Well known companies have been replaced by lesser known ones. Over the past several years, as discussed by the Chairman, the portfolio has progressively sought out investments to benefit from continuing epochal shifts in economic power. Savers in populous developing nations are achieving higher living standards and productivity leaps even as consumers in the West are faltering along with their banks and governments following many years of debt accumulation.
Some examples of new holdings during the year are as follows. Cetip controls the Brazilian payments system, MIPS has a system-on-a-chip design franchise that may well derive great opportunity from an exponential growth in smart phone usage, Greenlight Capital Re depends upon the investment skill of its founder David Einhorn and OSX upon the entrepreneurial skill of its founder Eike Batista and the needs of his related exploration and production company OGX. Jain Irrigation is a Malthusian investment in sustainable long term productivity growth for innumerable farmers across the globe operating on water scarce land. Mundra, India's leading port, expresses an optimism over where Indian trade is likely to head over coming years. The same applies to Santos with regard to Brazilian trade, in particular the likely growth of imports from very low levels today. CFAO is the leading distributor of consumer goods across Northern Africa. Dialight is a means of capturing the attractive prospects for and efficiencies of LED lighting over coming years. DNO and, more recently, Gulf Keystone Petroleum are both related to the opening up of Kurdistan's oil basins. Cryo Save is designed to allow parents to offer their children the chance to benefit from advances in medical science by preserving their umbilical stem cells. VODone expects to be able to tap into a mainland Chinese adoption of mobile lottery games.
Portfolio turnover remains around last year's high level and above what the Manager considers to be the likely long term average of between a fifth and a third. Following a dramatic rebound in markets and intermittent periods of heightened volatility it is perhaps not surprising that opportunities have arisen and/or been realised. We hope that our successes will continue to be more material in scale than our mistakes and that we can continue to produce attractive long term real total returns. Uncertainty over the underpinnings of recovery remains for now both a challenge and an opportunity.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
THIRTY LARGEST EQUITY HOLDINGS at 30 June 2010
|
||||||||
Name |
Region |
Business |
2010 |
2009 |
||||
Value £'000 |
% of total assets |
Value £'000 |
||||||
Level E Maya Fund |
United Kingdom |
Artificial intelligence based trading platform |
2,473 |
4.5 |
- |
|||
OGX Petróleo e Gás Participacoes |
Emerging Markets |
Oil and gas exploration and production - Brazil |
1,545 |
2.8 |
618 |
|||
Eldorado Gold |
North America |
Gold mining - Brazil, China, Greece & Turkey |
1,343 |
2.4 |
- |
|||
Kone |
Continental Europe |
Elevators |
1,167 |
2.1 |
1,069 |
|||
Ocean Wilsons |
United Kingdom |
Tugboats and port terminals - Brazil |
1,145 |
2.1 |
553 |
|||
China Merchants Bank |
Emerging Markets |
Banking - China |
1,137 |
2.0 |
707 |
|||
Baillie Gifford Japanese Smaller Co's Fund |
Asia Pacific including Japan |
Investment fund |
1,050 |
1.9 |
1,688 |
|||
Vision Opportunity China Fund |
Emerging Markets |
Investment fund - China |
1,022 |
1.8 |
- |
|||
Baillie Gifford Developed Asia Pacific Fund |
Asia Pacific including Japan |
Investment fund |
1,013 |
1.8 |
2,037 |
|||
Odontoprev |
Emerging Markets |
Dental health service - Brazil |
941 |
1.7 |
- |
|||
Reinet Investments SCA |
Continental Europe |
Investment holding company - Luxembourg |
835 |
1.5 |
692 |
|||
Seadrill |
Continental Europe |
Deep water oil rigs |
826 |
1.5 |
735 |
|||
Better Capital |
United Kingdom |
Fund investing in distressed businesses |
810 |
1.5 |
- |
|||
Schindler |
Continental Europe |
Elevators |
796 |
1.4 |
528 |
|||
ASOS |
United Kingdom |
Online fashion retailer |
774 |
1.4 |
- |
|||
Essilor |
Continental Europe |
Ophthalmology |
702 |
1.3 |
753 |
|||
Falkland Oil and Gas |
United Kingdom |
Oil and gas exploration and production - Falkland Islands |
679 |
1.2 |
210 |
|||
McDonalds |
North America |
Fast food restaurant chain |
678 |
1.2 |
279 |
|||
IG Group |
United Kingdom |
Spread betting |
666 |
1.2 |
252 |
|||
Healthspring |
North America |
Medicare |
665 |
1.2 |
- |
|||
Juridica Investments |
United Kingdom |
Fund of lawsuits |
664 |
1.2 |
398 |
|||
Medco Health Solutions |
North America |
Prescription management and health information |
662 |
1.2 |
499 |
|||
Marine Harvest |
Continental Europe |
Salmon farming |
636 |
1.1 |
407 |
|||
Novozymes |
Continental Europe |
Enzyme producer |
622 |
1.1 |
427 |
|||
Atlas Copco |
Continental Europe |
Industrial compressors and mining equipment |
621 |
1.1 |
381 |
|||
Ctrip.com International |
Emerging Markets |
Travel services - China |
603 |
1.1 |
337 |
|||
The Biotech Growth Trust |
United Kingdom |
Biotechnology investment trust |
600 |
1.1 |
- |
|||
Dragon Oil |
Emerging Markets |
Oil and gas exploration and production - Turkmenistan |
570 |
1.0 |
508 |
|||
Naspers |
Emerging Markets |
Media company - South Africa and China |
563 |
1.0 |
398 |
|||
Cetip |
Emerging Markets |
Investment services - Brazil |
558 |
1.0 |
- |
|||
|
|
|
26,366 |
47.4 |
13,476 |
|||
|
|
|
30 June 2010% |
|
30 June 2009 % |
Equities: |
United Kingdom |
|
20.8 |
|
7.7 |
|
Continental Europe |
|
19.7 |
|
22.1 |
|
North America |
|
18.5 |
|
19.6 |
|
Asia Pacific including Japan |
|
6.3 |
|
11.4 |
|
Emerging Markets |
|
28.5 |
|
21.0 |
Total Equities |
|
|
93.8 |
|
81.8 |
Fixed interest |
|
4.7 |
|
17.8 |
|
Net liquid assets |
|
1.5 |
|
0.4 |
|
Total assets (before deduction of bank loans) |
|
100.0 |
|
100.0 |
The Directors' fees for the year are detailed in the Directors' Remuneration Report. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006, other than Mr RRJ Burns, a Director of the Company, having been a partner of Baillie Gifford & Co, until his retiral on 30 April 2006. Baillie Gifford & Co are employed by the Company as Managers and Secretaries under a management agreement which is terminable on not less than one year's notice, or on shorter notice in certain circumstances. The fee in respect of each quarter is 0.125% of the net assets of the Company attributable to its shareholders on the last day of that quarter. The management fee is levied on all assets, including holdings in collective investment schemes (OEICs) managed by Baillie Gifford & Co, however, the OEICs' share classes held by the Company do not incur management fees. The details of the management fee are as follows:
|
2010 £'000 |
|
2009 £'000 |
Investment management fee |
252 |
|
194 |
|
252 |
|
194 |
As an Investment Trust, the Company invests in equities and makes other investments so as to achieve its investment objective of achieving capital and income growth by investing on a worldwide basis. In pursuing its investment objective, the Company is exposed to various types of risk that are associated with the financial instruments and markets in which it invests.
These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent loss of capital rather than to minimise the short term volatility.
PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)
The Company may enter into derivatives transactions as explained in the Investment Policy on page 21 of the Annual Report. No such transactions were undertaken in the period under review.
The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period.
Market Risk
The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. The Board of Directors reviews and agrees policies for managing these risks and the Company's Investment Managers both assess the exposure to market risk when making individual investment decisions and monitor the overall level of market risk across the investment portfolio on an ongoing basis.
(i) Currency Risk
Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items.
The Investment Managers monitor the Company's exposure to foreign currencies and report to the Board on a regular basis. The Investment Managers assess the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the company is quoted.
Foreign currency borrowings can limit the Company's exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments.
Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below. The exposure of the Company's OEIC investments managed by Baillie Gifford & Co has been included in the analysis as sterling, being their currency of quotation. The main changes to net currency exposure during the year are as follows: exposure to the US dollar decreased, reflecting sales of US bonds; exposure to the Japanese yen decreased owing to the sale of a Japanese bond; exposure to the Brazilian real increased through purchases of Brazilian equity investments and exposure to the Hong Kong dollar increased through purchases of Hong Kong and Chinese equities. Explanations of the changes in asset allocation can be found in the Chairman's Statement and Managers' Portfolio Review.
PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)
At 30 June 2010 |
Investments £'000 |
|
Cash and deposits £'000 |
|
Bank loans £'000 |
|
Other debtors and creditors* £'000 |
|
Net exposure £'000 |
US dollar |
12,664 |
|
(651) |
|
- |
|
36 |
|
12,049 |
Euro |
5,127 |
|
51 |
|
(1,081) |
|
201 |
|
4,298 |
Norwegian krona |
1,907 |
|
- |
|
- |
|
- |
|
1,907 |
Swiss franc |
2,129 |
|
193 |
|
- |
|
- |
|
2,322 |
Japanese yen |
833 |
|
479 |
|
(2,266) |
|
72 |
|
(882) |
Brazilian real |
4,683 |
|
2 |
|
- |
|
- |
|
4,685 |
Hong Kong dollar |
2,772 |
|
- |
|
- |
|
- |
|
2,772 |
South African rand |
1,254 |
|
- |
|
- |
|
- |
|
1,254 |
Other overseas currencies |
7,101 |
|
246 |
|
- |
|
(68) |
|
7,279 |
Total exposure to currency risk |
38,470 |
|
320 |
|
(3,347) |
|
241 |
|
35,684 |
Sterling |
16,116 |
|
82 |
|
(2,000) |
|
180 |
|
14,378 |
|
54,586 |
|
402 |
|
(5,347) |
|
421 |
|
50,062 |
*Includes net non-monetary assets of £8,000.
At 30 June 2009 |
Investments £'000 |
|
Cash and deposits £'000 |
|
Bank loans £'000 |
|
Other debtors and creditors* £'000 |
|
Net exposure £'000 |
US dollar |
14,111 |
|
4 |
|
- |
|
45 |
|
14,160 |
Euro |
5,570 |
|
28 |
|
- |
|
65 |
|
5,663 |
Norwegian krona |
1,142 |
|
- |
|
- |
|
- |
|
1,142 |
Swiss franc |
1,830 |
|
53 |
|
- |
|
- |
|
1,883 |
Japanese yen |
1,590 |
|
54 |
|
(1,888) |
|
(3) |
|
(247) |
Brazilian real |
1,180 |
|
2 |
|
- |
|
- |
|
1,182 |
Hong Kong dollar |
1,448 |
|
- |
|
- |
|
- |
|
1,448 |
South African rand |
1,049 |
|
- |
|
- |
|
- |
|
1,049 |
Other overseas currencies |
3,067 |
|
- |
|
- |
|
4 |
|
3,071 |
Total exposure to currency risk |
30,987 |
|
141 |
|
(1,888) |
|
111 |
|
29,351 |
Sterling |
9,789 |
|
2 |
|
- |
|
(77) |
|
9,714 |
|
40,776 |
|
143 |
|
(1,888) |
|
34 |
|
39,065 |
* Includes net non-monetary assets of £10,000.
Currency Risk Sensitivity
At 30 June 2010, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The analysis is performed on the same basis for 2009.
|
2010 £'000 |
|
2009 £'000 |
US dollar |
602 |
|
708 |
Euro |
215 |
|
283 |
Norwegian krona |
95 |
|
57 |
Swiss franc |
116 |
|
94 |
Japanese yen |
(44) |
|
(12) |
Brazilian real |
234 |
|
59 |
Hong Kong dollar |
139 |
|
72 |
South African rand |
63 |
|
52 |
Other overseas currencies |
364 |
|
155 |
|
1,784 |
|
1,468 |
PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)
(ii) Interest Rate Risk
Interest rate movements may affect directly:
• the fair value of the investments in fixed interest rate securities;
• the level of income receivable on cash deposits;
• the fair value of the Company's fixed-rate borrowings; and
• the interest payable on any variable rate borrowings which the Company may take out.
Interest rate movements may also impact upon the market value of the Company's investments outwith fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements. The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments. The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board. Movements in interest rates, to the extent that they affect the market value of the Company's fixed rate borrowings, may also affect the amount by which the Company's share price is at a discount or a premium to the net asset value.
The interest rate risk profile of the Company's financial assets and liabilities at 30 June is shown below. The main changes to the interest rate risk profile of the Company's financial assets during the year have been net sales of £6,528,000 of UK and Overseas bonds, a draw down of €1.32 million under the US$5 million multi-currency facility with Lloyds TSB Scotland, and a draw down of £2 million under the one-year facility with Lloyds TSB Scotland.
Financial assets |
2010 |
2009 |
||||
|
Fair value £'000 |
Weighted average interest rate |
Weighted average period until maturity |
Fair value £'000 |
Weighted average interest rate |
Weighted average period until maturity |
Fixed rate: |
|
|
|
|
|
|
UK bonds |
- |
- |
- |
682 |
6.5% |
15 years |
US dollar bonds |
139 |
4.3% |
3 years |
663 |
5.6% |
15 years |
Euro bonds |
97 |
5.0% |
5 years |
878 |
6.8% |
14 years |
Floating rate: |
|
|
|
|
|
|
UK bonds (interest rate linked to LIBOR) |
335 |
2.0% |
1 year |
396 |
2.0% |
1 year |
US dollar bonds (interest rate linked to US LIBOR) |
143 |
1.0% |
40 years |
1,299 |
8.9% |
1 year |
US dollar bonds (interest rate linked to US CPI) |
- |
- |
- |
1,519 |
1.8% |
19 years |
Euro bonds (interest rate linked to Euro LIBOR) |
112 |
8.6% |
5 years |
127 |
9.5% |
6 years |
Japanese bond (interest rate linked to Japanese CPI) |
- |
- |
- |
1,145 |
1.4% |
9 years |
Fixed interest collective investment schemes: |
|
|
|
|
|
|
CQS Rig Finance Fund |
563 |
- |
n/a |
47 |
- |
n/a |
Athena Debt Opportunities Fund |
1,303 |
2.9% |
27 years |
434 |
4.4% |
28 years |
The cash deposits generally comprise call deposits or short term money market deposits with original maturities of less than three months, which are repayable on demand. The benchmark rate which determines the interest payments received on cash balances is the bank base rate.
Financial Liabilities |
2010 £'000 |
2009 £'000 |
The interest rate risk profile of the Company's financial liabilities at 30 June was: |
||
Fixed rate - Yen denominated |
2,266 |
1,888 |
Floating rate - Euro denominated |
1,081 |
- |
Floating rate - Sterling denominated |
2,000 |
- |
|
5,347 |
1,888 |
The maturity profile of the Company's financial liabilities at 30 June was: |
||
In less than one year |
2,000 |
- |
In one to two years (Yen and Euro bank loan matures in 1 year 8 months) |
3,347 |
- |
In two to five years |
- |
1,888 |
|
5,347 |
1,888 |
Interest Rate Risk Sensitivity
An increase of 100 basis points in bond yields as at 30 June 2010 would have decreased total net assets and total return on ordinary activities by £7,000 (2009 - £396,000). A decrease of 100 basis points would have had an equal but opposite effect.
An increase of 100 basis points in bond yields as at 30 June 2010 would have decreased the net asset value per share (with borrowings at fair value) by 0.15p (2009 - 7.88p). A decrease of 100 basis points would have had an equal but opposite effect.
(iii) Other Price Risk
Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Managers. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objectives and investment policies. The portfolio does not seek to reproduce the index, investments are selected based upon the merit of individual companies and therefore performance may well diverge from the short term fluctuations of the comparative index.
Other Price Risk Sensitivity
Fixed asset investments are valued at bid prices which equate to their fair value. A full list of the Company's investments is given on pages 17 to 20 of the Annual Report. In addition, a geographical analysis of the portfolio (shown above), an analysis of the portfolio by broad industrial or commercial sector and a list of the 30 largest equity investments by their aggregate market value (shown above) is given on pages 10 to 12 of the Annual Report. 103.9% (2009 - 86.0%) of the Company's net assets are invested in equities. A 3% increase in quoted equity valuations at 30 June 2010 would have increased total assets and total return on ordinary activities by £1,560,000 (2009 - £1,008,000). A decrease of 3% would have had an equal but opposite effect.
PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)
Liquidity Risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Company's assets are investments in quoted securities that are readily realisable. The Board monitors the exposure to any one holding. The Company has the power to take out borrowings, which give it access to additional funding when required. The Company's borrowing facilities are detailed below and the maturity profile of its borrowings is set out above.
|
|
|
2010 £'000 |
2009 £'000 |
Short term loan facility |
|
|
2,000 |
- |
Bank loan |
|
|
3,347 |
1,888 |
|
|
|
5,347 |
1,888 |
A £2 million loan facility has been arranged with Lloyds TSB Scotland plc, expiring on 27 August 2010. A US$5 million loan facility has been arranged with Lloyds TSB Scotland plc, expiring on 27 February 2012. At 30 June 2010 drawings were ¥300 million at an interest rate of 1.905% per annum (2009 - ¥300 million at 1.905%); €1.32 million at an interest rate of 0.8483% per annum (2009 - nil); £2 million at an interest rate of 2.1724% per annum (2009 - nil).
Credit Risk
This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows:
· Where the Investment Managers make an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question.
· The Board regularly receives information from the Investment Managers on the credit ratings of those bonds and other securities in which the Company has invested.
· The Company's listed investments are held on its behalf by The Bank of New York Mellon, the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Managers monitor the Company's risk by reviewing the custodian's internal control reports and reporting their findings to the Board.
· Investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Managers. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company's custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed.
· Transactions involving derivatives, and other arrangements wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest, are subject to rigorous assessment by the Investment Managers of the creditworthiness of that counterparty.
· Cash is only held at banks that are regularly reviewed by the Managers.
Credit Risk Exposure
The exposure to credit risk at 30 June was:
|
2010 £'000 |
2009 £'000 |
Fixed interest investments |
2,692 |
7,190 |
Cash and deposits |
402 |
143 |
Debtors and prepayments |
1,378 |
274 |
|
4,472 |
7,607 |
None of the Company's financial assets are past due or impaired.
Fair Value of Financial Assets and Financial Liabilities
The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the balance sheet with the exception of long term borrowings which are stated in accordance with FRS 26.
|
2010 |
|
2009 |
|
|||
|
Book £'000 |
Fair £'000 |
|
Book £'000 |
Fair £'000 |
||
Fixed rate yen loan |
2,266 |
2,294 |
|
1,888 |
1,913 |
||
Floating rate euro loan |
1,081 |
1,081 |
|
|
|
||
Total long term borrowings |
3,347 |
3,375 |
|
1,888 |
1,913 |
||
Gains and losses on hedges
At 30 June 2010 there were no unrecognised gains/losses on hedges (2009 - nil).
Currency gains/losses are taken to the capital reserve and are not reflected in the revenue account unless they are of a revenue nature.
Capital Management
The Company does not have any externally imposed capital requirements. The capital of the Company is the ordinary share capital. It is managed in accordance with its investment policy in pursuit of its investment objective, both of which are detailed on page 21 of the Annual Report. Shares may be repurchased as explained on pages 27 and 28 of the Annual Report.
Investments
At 30 June 2010 |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
Securities |
||||
Listed equities |
49,421 |
2,473 |
- |
51,894 |
Listed convertible securities |
236 |
- |
- |
236 |
Listed debt securities |
563 |
- |
1,558 |
2,121 |
Unlisted debt securities |
- |
- |
335 |
335 |
Total financial asset investments |
50,220 |
2,473 |
1,893 |
54,586 |
At 30 June 2009 |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
Securities |
||||
Listed equities |
33,586 |
- |
- |
33,586 |
Listed convertible securities |
440 |
|
- |
440 |
Listed debt securities |
4,494 |
1,299 |
561 |
6,354 |
Unlisted debt securities |
- |
- |
396 |
396 |
Total financial asset investments |
38,520 |
1,299 |
957 |
40,776 |
Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 29 'Financial Instruments: Disclosures', the above table provides an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value.
Fair Value Hierarchy
The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:
Level 1 - investments with quoted prices in an active market;
Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly being derived from market prices; and
Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.
Other Risks
Other risks faced by the Company include the following:
Regulatory Risk - failure to comply with applicable legal and regulatory requirements could lead to suspension of the Company's Stock Exchange Listing, financial penalties or a qualified audit report. Breach of section 1158 of the Corporation Taxes Act 2010 could lead to the Company being subject to tax on capital gains. Baillie Gifford's Heads of Business Risk & Internal Audit and Regulatory Risk provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes. The Managers monitor investment movements and the level of forecast income and expenditure to ensure the provisions of section 1158 are not breached.
Operational/Financial Risk - failure of the Managers' accounting systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. The Board reviews the Managers' Report on Internal Controls and the reports by other key third party providers are reviewed by the Managers on behalf of the Board.
Gearing Risk - the Company may borrow money for investment purposes (sometimes known as gearing). If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings. All borrowings require the prior approval of the Board and gearing levels are discussed by the Board and Managers at every meeting. The majority of the Company's investments are in quoted securities that are readily realisable.
Discount Volatility - the discount at which the Company's shares trade can widen. The Board monitors the level of discount and the Company has authority to buyback its own shares.
The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements respectively; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Company's page of the Managers' website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed within the Directors and Management section of the Annual Report confirm that, to the best of their knowledge:
• the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and loss of the Company; and
• the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
By order of the Board
Richard R J Burns
5 August 2010
|
For the year ended 30 June 2010 |
|
For the year ended 30 June 2009 |
||||
|
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
Revenue £'000 |
Capital £'000 |
Total £'000 |
Gains/(losses) on investments |
- |
11,977 |
11,977 |
|
- |
(10,777) |
(10,777) |
Currency losses |
- |
(293) |
(293) |
|
- |
(12) |
(12) |
Income (note 2) |
1,263 |
- |
1,263 |
|
1,336 |
- |
1,336 |
Investment management fee |
(126) |
(126) |
(252) |
|
(97) |
(97) |
(194) |
Other administrative expenses |
(168) |
- |
(168) |
|
(150) |
- |
(150) |
Net return before finance costs and taxation |
969 |
11,558 |
12,527 |
|
1,089 |
(10,886) |
(9,797) |
Finance costs of borrowings |
(45) |
(45) |
(90) |
|
(20) |
(20) |
(40) |
Net return on ordinary activities before taxation |
924 |
11,513 |
12,437 |
|
1,069 |
(10,906) |
(9,837) |
Tax on ordinary activities |
(77) |
7 |
(70) |
|
(251) |
34 |
(217) |
Net return on ordinary activities after taxation |
847 |
11,520 |
12,367 |
|
818 |
(10,872) |
(10,054) |
Net return per ordinary share (note 3) |
16.85p |
229.23p |
246.08p |
|
16.26p |
(216.24p) |
(199.98p) |
Dividends paid and proposed per ordinary share (note 4) |
15.50p |
|
|
|
15.00p |
|
|
The total column of the Income Statement is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.
A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.
30 June 2010£'000 |
30 June 2009 £'000 |
||
Fixed Assets |
|
|
|
Investments held at fair value through profit or loss |
54,586 |
|
40,776 |
|
|
|
|
Current Assets |
|
|
|
Debtors |
1,378 |
|
274 |
Cash and deposits |
402 |
|
143 |
|
1,780 |
|
417 |
Creditors Amounts falling due within one year (note 5) |
(2,957) |
|
(240) |
Net current assets |
(1,177) |
|
177 |
Total assets less current liabilities |
53,409 |
|
40,953 |
Creditors Amounts falling due after more than one year (note 5) |
(3,347) |
|
(1,888) |
Provisions for liabilities and charges |
|
|
|
Deferred taxation |
- |
|
- |
Total net assets |
50,062 |
|
39,065 |
Capital and reserves |
|
|
|
Called-up share capital |
1,241 |
|
1,257 |
Capital redemption reserve |
16 |
|
- |
Share premium |
20 |
|
20 |
Capital reserve |
47,295 |
|
36,391 |
Revenue reserve |
1,490 |
|
1,397 |
Shareholders' funds |
50,062 |
|
39,065 |
Net asset value per ordinary share (after deducting borrowings at fair value) |
1,008.2p |
|
776.5p |
Net asset value per ordinary share (after deducting borrowings at par) |
1,008.7p |
|
777.0p |
For the year ended 30 June 2010
|
Share capital
£'000 |
Capital redemption reserve £'000 |
Share premium
£'000 |
Capital reserve*
£'000 |
Revenue reserve
£'000 |
Shareholders' funds
£'000 |
Shareholders' funds at 1 July 2009 |
1,257 |
- |
20 |
36,391 |
1,397 |
39,065 |
Net return on ordinary activities after taxation |
- |
- |
- |
11,520 |
847 |
12,367 |
Shares purchased for cancellation |
(16) |
16 |
- |
(616) |
- |
(616) |
Dividends paid during the year (note 4) |
- |
- |
- |
- |
(754) |
(754) |
Shareholders' funds at 30 June 2010 |
1,241 |
16 |
20 |
47,295 |
1,490 |
50,062 |
For the year ended 30 June 2009
|
Share capital
£'000 |
Capital redemption reserve £'000 |
Share premium
£'000 |
Capital reserve*
£'000 |
Revenue reserve
£'000 |
Shareholders' funds
£'000 |
Shareholders' funds at 1 July 2008 |
1,257 |
- |
20 |
47,263 |
1,449 |
49,989 |
Net return on ordinary activities after taxation |
- |
- |
- |
(10,872) |
818 |
(10,054) |
Dividends paid during the year (note 4) |
- |
- |
- |
- |
(870) |
(870) |
Shareholders' funds at 30 June 2009 |
1,257 |
- |
20 |
36,391 |
1,397 |
39,065 |
CASH FLOW STATEMENT |
|||||
|
For the year ended 30 June 2010 |
For the year ended 30 June 2009 |
|||
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Net cash inflow from operating activities |
|
755 |
|
|
982 |
Servicing of finance |
|
|
|
|
|
Interest and breakage costs paid |
(90) |
|
|
(37) |
|
Net cash outflow from servicing of finance |
|
(90) |
|
|
(37) |
Taxation |
|
|
|
|
|
Corporation tax paid |
(154) |
|
|
(198) |
|
Total tax paid |
|
(154) |
|
|
(198) |
Financial investment |
|
|
|
|
|
Acquisitions of investments |
(30,573) |
|
|
(29,282) |
|
Disposals of investments |
28,147 |
|
|
24,795 |
|
Realised currency profit |
29 |
|
|
336 |
|
Net cash outflow from financial investment |
|
(2,397) |
|
|
(4,151) |
|
|
|
|
|
|
Equity dividends paid (note 4) |
|
(754) |
|
|
(870) |
|
|
|
|
|
|
Net cash outflow before use of liquid resources and financing |
|
(2,640) |
|
|
(4,274) |
|
|
|
|
|
|
Liquid resources |
|
|
|
|
|
Decrease in short term deposits |
- |
|
|
1,771 |
|
Net cash inflow from use of liquid resources |
|
- |
|
|
1,771 |
Financing |
|
|
|
|
|
Shares purchased for cancellation |
(238) |
|
|
- |
|
Bank loans drawn down |
3,137 |
|
|
- |
|
|
|
|
|
|
|
Net cash inflow from financing |
|
2,899 |
|
|
- |
Increase/(decrease) in cash |
|
259 |
|
|
(2,503) |
Reconciliation of net cash flow to movement in net debt |
|
|
|
|
|
Increase/(decrease) in cash in the year |
|
259 |
|
|
(2,503) |
Decrease in short term deposits |
|
- |
|
|
(1,771) |
Net cash inflow from bank loans |
|
(3,137) |
|
|
- |
Exchange movement on short term deposits |
|
- |
|
|
118 |
Exchange movement on bank loans |
|
(322) |
|
|
(466) |
|
|
|
|
|
|
Movement in net debt in the year |
|
(3,200) |
|
|
(4,622) |
Net (debt)/funds at 1 July |
|
(1,745) |
|
|
2,877 |
Net debt at 30 June |
|
(4,945) |
|
|
(1,745) |
|
|
|
|
|
|
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities |
|
|
|
|
|
Net return before finance costs and taxation |
|
12,527 |
|
|
(9,797) |
(Gains)/losses on investments |
|
(11,977) |
|
|
10,777 |
Currency losses |
|
293 |
|
|
12 |
Amortisation of fixed interest book cost |
|
(70) |
|
|
(128) |
Decrease in accrued income |
|
44 |
|
|
32 |
Decrease in debtors |
|
10 |
|
|
162 |
Increase/(decrease) in creditors |
|
9 |
|
|
(11) |
Overseas tax suffered |
|
(58) |
|
|
(43) |
Income tax suffered |
|
(23) |
|
|
(22) |
Net cash inflow from operating activities |
|
755 |
|
|
982 |
1. |
The financial statements for the year to 30 June 2010 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 30 June 2010, which are unchanged from the prior year and have been applied consistently. The adoption of the January 2009 Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' had no effect on the financial statements of the Company.
|
|||||||||
|
|
30 June 2010 £'000 |
|
30 June 2009 £'000 |
||||||
2. |
Income |
|
|
|
||||||
|
Income from investments and interest receivable |
1,257 |
|
1,330 |
||||||
|
Other income |
6 |
|
6 |
||||||
|
|
1,263 |
|
1,336 |
||||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
|
|
30 June 2010 £'000 |
|
30 June 2009 £'000 |
||||||
3. |
Net return per ordinary share |
|
|
|
||||||
|
Revenue return |
16.85p |
|
16.26p |
||||||
|
Capital return |
229.23p |
|
(216.24p) |
||||||
|
Total return |
246.08p |
|
(199.98p) |
||||||
|
|
|
|
|
||||||
|
Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of £847,000 (2009 - £818,000) and on 5,025,506 (2009 - 5,027,766) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
Capital return per ordinary share is based on the net capital gain for the financial year of £11,520,000 (2009 - net capital loss of £10,872,000) and on 5,025,506 (2009 - 5,027,766) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
There are no dilutive or potentially dilutive shares in issue.
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2010 |
|
2009 |
|
2010 £'000 |
|
2009 £'000 |
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4. |
Ordinary Dividends |
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|
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Amounts recognised as distributions in the year: |
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|
|
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|
|
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|
Previous year's final (paid 8 October 2009) |
8.50p |
|
8.50p |
|
427 |
|
427 |
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|
Previous year's special |
- |
|
2.30p |
|
- |
|
116 |
||
|
Interim (paid 1 April 2010) |
6.50p |
|
6.50p |
|
327 |
|
327 |
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|
|
15.00p |
|
17.30p |
|
754 |
|
870 |
||
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|
|
|
|
|
|
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES (Ctd)
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4. |
Ordinary Dividends (Ctd) |
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We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Taxes Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £847,000 (2009 - £818,000). |
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2010 |
|
2009 |
|
2010 £'000 |
|
2009 £'000 |
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Amounts paid and payable in respect of the year: |
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|
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|
Interim dividend per ordinary share |
6.50p |
|
6.50p |
|
327 |
|
327 |
|
Proposed final dividend per ordinary share (payable 7 October 2010) |
9.00p |
|
8.50p |
|
447 |
|
427 |
|
|
15.50p |
|
15.00p |
|
774 |
|
754 |
|
|
|
|
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If approved the final dividend will be paid on 7 October 2010 to all shareholders on the register at the close of business on 10 September 2010. The ex-dividend date is 8 September 2010. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for receipt of elections for this dividend is 16 September 2010. |
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6. |
Creditors falling due within one year include a £2 million bank loan repayable on 27 August 2010 and creditors falling due after one year include bank loans of ¥300 million (2009 - ¥300 million) and €1.32 million (2009 - nil) which are repayable on 27 February 2012. |
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7. |
The Annual Report and Financial Statements including the Notice of Annual General Meeting will be available on the Managers' website www.bailliegifford.com on or around 19 August 2010. |
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8. |
The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 June 2010. The financial information for 2009 is derived from the financial statements for 2009 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2009 and 2010 accounts; their reports for both years were unqualified and did not contain a statement under sections 495 to 497 of the Companies Act 2006. The statutory accounts for 2010 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. |
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9. |
None of the views expressed in this document should be construed as advice to buy or sell a particular investment. |