Annual Financial Report
MIDAS INCOME AND GROWTH TRUST PLC
AUDITED ANNUAL FINANCIAL REPORT
for the year ended 30 April 2012
1. CHAIRMAN'S STATEMENT
Highlights
• Net asset value total return of -1.4%
• Share price total return of -4.6%
• Changes to investment policies and Articles of Association approved by shareholders
• Quarterly dividends rebased to 1.3p from 1.63p
• Manager and shareholder interests brought into closer alignment through new fee structure
• Continuation vote introduced with effect from AGM in September 2013
Market Background and Performance
This year appears to have marked the end of the strong recovery experienced in markets since March 2009. Investor sentiment has been challenged by concerns surrounding the European debt crisis, stagnant growth in the developed economies and geopolitical uncertainty in both developed and emerging economies. Against this background markets have experienced wide mood swings, producing a return to more volatile conditions.
Over the year the Company's net asset value total return was -1.4%, although the return over the second half of the year was positive. This compares with a benchmark return of 6.9% (Benchmark was changed on 18 January 2012 to 3-month LIBOR +3% (previously 8% per annum)). The share price total return (with dividends reinvested) gave a total return of -4.6%, which is disappointing due to a further widening of the discount to net asset value.
Changes to Investment Policy, Rebasing of Dividends and Related Matters
Whilst recognising the importance of dividends to shareholders and despite an improving revenue account position, the Board believed that current year dividend was again going to be uncovered, as had been the case in the previous two years, further depleting the Company's revenue reserves. With this in mind and having regard to the challenging economic environment your Board concluded that dividend growth from the prevailing level was unlikely for several years. Furthermore, it was felt that the constraints imposed on investment to maintain such a relatively high level of dividends had been, and was likely to remain, detrimental to the future total return to shareholders.
Accordingly, following a strategic review undertaken with the assistance of the Manager and the Company's financial adviser, the Board proposed a number of changes, designed to increase investment flexibility and offer the prospect of enhanced longer term total returns, whilst still recognising the importance of income to investors.
The main changes proposed and subsequently approved by shareholders at a General Meeting on 18 January 2012, are summarised below:
• Dividend rebased to 5.2p per annum (from 6.52p) with effect from third interim dividend.
• Core allocation to overseas equities increased from 15% to 25% to allow further investment in stronger economic conditions in developing markets and to take advantage of wider opportunities for dividend growth.
• Core allocation to fixed income reduced by 10% to allow for higher allocation to overseas equities.
• Asset allocation ranges widened to increase flexibility to take advantage of investment opportunities.
• Investment objective changed to seeking to outperform 3 month LIBOR +3% over the longer term, with low volatility and the prospect of capital and income growth, through investment in a multi asset portfolio.
• Benchmark of an absolute return of 8% per annum replaced with 3 month LIBOR +3% over a three year rolling period.
Management Fees
In addition to the changes detailed above your Board agreed changes to the fee arrangements with the Manager. These changes have both simplified the arrangements and also more closely aligned the Manager's interests with shareholder returns. With effect from 1 January 2012 the Manager no longer has the potential of earning a performance related fee. In addition the basic management fee was reduced to 0.9% per annum from 1%, with this to be charged based on the Company's market capitalisation rather than on its net asset value. Your Board believes these new arrangements to be in line with best practice in the investment trust industry.
Company's Rating
Whilst the Company has in the past generally traded at a single figure discount to net asset value, there have been more recent periods when low double digit discounts have developed. The Board and Manager remain committed to improving the rating of the Company including additional marketing initiatives and, to further this commitment, it was proposed to shareholders that the Company's Articles of Association should be amended to move to an annual continuation vote, starting at the AGM in September 2013. This proposal was approved at the General Meeting on 18 January 2012.
During the year 150,000 shares were bought back for cancellation and your Board will be seeking a renewal of the share buyback facility at the Annual General Meeting in September.
Gearing
The Company's short term rolling debt facility of £7 million was successfully renegotiated in July 2011 and significantly better terms were achieved over the previous agreement. The debt facility remained fully drawn over the course of the year. End of year gearing (pre cash) was 14.6% of net assets, up slightly from 14% at 30 April 2011. Gearing has remained well within the Board's stated maximum of 25% throughout the year.
Dividends
Two interim dividends of 1.63p were declared during the year, with a further 1.3p interim dividend (the rebased dividend level) also being declared. These three dividends together with the fourth interim dividend of 1.3p announced on 15 May 2012 (paid on 18 June 2012), give total dividends of 5.86p (2011 - 6.52p). The revenue position of the Company has benefitted from the rebased dividend policy and the Board remains committed to the re-establishment of a progressive dividend policy at the earliest opportunity. This should further enhance the attractions of the Company to both existing and new investors.
Company Secretary
The Company's secretarial services have been provided by Aberdeen Asset Management (AAM) since August 2005. However, the Board was informed early in the year that AAM had decided that they no longer wished to provide third party secretarial services. The Board and Manager would like to thank AAM for their services over the past 7 years and in particular would like to record their appreciation to Charles Mearns, whose capable skills and professional approach have been much valued in his time as company secretary. The Board, having carried out a thorough market search, are pleased to welcome Martin Cassels of R&H Fund Services Limited ("R&H") as the new company secretary. R&H will assume their duties on 1 July 2012.
Articles of Association
The law relating to investment trusts has recently been amended to modernise the investment trust regime. In particular, new conditions for a company being approved as an investment trust came into effect for accounting periods beginning on or after 1 January 2012. As a result of the change in legislation there is no longer a requirement for there to be a prohibition in the Company's Articles of Association on the distribution as a dividend of surpluses arising from the realisation of investments. The definition of "investment company" under the Companies Act 2006 has also been amended with effect from 6 April 2012 to remove the requirement that the distribution of the Company's capital profits be prohibited by its Articles of Association.
The Board therefore will be seeking shareholder approval at the AGM to amend the Articles of Association by removing the relevant provisions prohibiting the distribution of capital profits by the Company thereby permitting the distribution of capital profits by way of a dividend. This will provide the Company with increased flexibility to at least maintain dividends although it is the Directors' intention that dividends should generally be paid from revenue.
Annual General Meeting
This year's Annual General Meeting will be held at 12.30 p.m. on Tuesday 4 September 2012 at The Racquet Club, Hargreaves Buildings, 5 Chapel Street, Liverpool L3 9AG. I would be delighted if shareholders were to take this opportunity to meet with Board members and investment managers over a post AGM buffet lunch.
Outlook
This year has been one of change for the Company and your Board firmly believes that the amended investment objective and policy will provide the Manager with the flexibility to both enhance future capital returns and also provide a platform to return to dividend growth.
Markets are likely to remain both unpredictable and volatile given the major challenges outlined by the Manager in their report. The benefits of a relatively high income and low volatility, delivered through a disciplined multi asset approach, should prove attractive to an increasing number of investors. Particularly so in an era, post the 25 year credit boom, of generally sub trend economic growth and low interest rates.
Hubert Reid
Chairman
21 June 2012
2. MANAGER'S REVIEW
Market Background
The year under review has seen a return to volatile market conditions, albeit not to the same extent as seen in 2008 and early 2009. Investor sentiment has experienced something of a rollercoaster ride, with the relative stability early in the year being replaced by sharp setbacks in both equities and corporate bonds in the period from July until October. The main catalysts for this reversal of market fortunes were the growing concerns regarding the indebtedness of governments in Europe, and to a lesser extent the United States, where the debt rating agency, Standard and Poor's, downgraded the country from its AAA status. These concerns were further compounded by a slew of disappointing economic data emerging from the developed economies. Meanwhile several of the larger developing economies also hit problems as interest rates were increased to curb inflationary pressures and, in the case of China, to control the excesses building within the residential property sector.
The 'Jekyll and Hyde' nature of sentiment was once again demonstrated as we moved through the final quarter of 2011, when more encouraging economic reports emerging from the United States bolstered confidence. In Europe market watchers were encouraged by the introduction by the European Central Bank of the Long Term Refinancing Operation, which provided much needed liquidity support to the beleaguered banking system. Markets rallied strongly and this more positive environment carried forward well into the first quarter of 2012.
However, as the Company's financial year drew to its close sentiment was once again challenged as the Greek debt crisis escalated and politics took centre stage in Europe. The willingness of the electorate to accept the austerity measures being implemented in the peripheral European countries started to be questioned, with even the continued existence of the Euro coming into sharp focus. Meanwhile the better economic data emerging from the United States reversed, with the employment data being particularly disappointing. Markets reacted by again experiencing an uplift in volatility and experiencing sharp falls. This weaker market environment has continued into the current year leaving investors concerned that the World economy may be lurching into another crisis, propelled by financial dislocations in Europe, which would leave few economies unscathed.
Performance
The gyrations in markets were detrimental to performance in the first half of the year. However, the rally seen in risk assets over the period since the end of October helped to improve the overall out-turn for the year. The Company's net asset value total return was -1.4% which was helped in no small measure by the high level of income generated within the portfolio. Whilst the return was well below that achieved in the previous two years, it was produced against a background much less friendly to risk assets. The share price total return of -4.6% was disappointing, as the discount to net asset value increased over the course of the year. With the Company's shares trading at a discount of over 10% at the period end and offering a prospective yield of in excess of 5%, we firmly believe that they offer good value for investors seeking a diversified investment portfolio with low volatility and a relatively high income.
Asset Allocation
The changes to the investment objective and policy approved by shareholders have provided more flexibility to improve future capital returns and further diversify the Company's assets. The move to rebase the dividend in particular has allowed investment to be made with more emphasis on a growing income stream, offering the prospect of better future revenue performance and also improved capital returns.
The Company's exposure to equities has been bolstered over the course of the year, as the relative attractions of well financed companies with strong business franchises and growing dividends have been increasingly emphasised within the portfolio. This increased exposure was achieved both through the direct UK equity holdings and also by introducing further high quality specialist overseas managers, predominantly those with a focus on identifying companies offering sustainable dividend growth. Holdings more prone to volatility were reduced into strength with more defensive sectors being favoured.
Fixed interest positions have been reduced to finance the increase in equity allocations. In particular preference shares and the closed-ended corporate bond holdings were used as a source of funding. Overall we continue to prefer corporate bonds to sovereign debt, with yields in 'safe haven' gilts and treasuries offering little by way of return for the risks being taken. Within corporate bonds emphasis is on shorter maturity bonds and senior loans, which offer better protection against inflation and have little interest rate risk.
Alternative asset holdings were reduced, primarily through the sale of structured product positions, where counterparty risks were not being compensated for by the returns available. Private equity holdings have been maintained although exposure was reduced post the year end. Hedge fund positions have also been reduced with emphasis being placed on managers positioned for deterioration in the distressed debt markets.
Property holdings have been reduced with commercial property likely to suffer from both difficult market conditions and also excess supply as banks reduce property exposure on their balance sheets over the coming years. The remaining holdings are mainly centred on Asia, where property market fundamentals still appear attractive. However, the bank deleveraging process is also throwing up opportunities for investors in certain parts of the property market, which we have been able to exploit.
A new area introduced into the portfolio over the year was aircraft leasing through an investment in a vehicle with a 9% running yield and potential for further capital appreciation, a combination which should produce mid-teen returns over its 12 year life.
The asset allocation across the portfolio at 30 April 2012 is shown in the table below.
|
|
Portfolio |
Core Allocation |
Change to core allocation |
Range |
|
Asset Class |
% |
% |
% |
% |
|
UK Equities |
34.5(28.1) |
35 |
|
15-60 |
|
Overseas Equities |
23.3(17.6) |
25 |
+10 |
10-40 |
|
Total Equities |
57.8(45.7) |
60 |
+10 |
25-85 |
|
Fixed Interest (inc Cash) |
17.9(21.1) |
15 |
-10 |
0-40 |
|
Alternative Assets |
18.3(22.4) |
15 |
|
0-25 |
|
Property |
6.0(10.8) |
10 |
|
0-25 |
All figures are expressed as a percentage of Gross assets.
30 April 2011 figures are shown in brackets.
UK Equities (34.5%)
Exposure to the UK equity market was increased over the period. Several new holdings were introduced to the portfolio with D S Smith (international paper & packaging manufacturer), W S Atkins (infrastructure service provider) and Centrica (owner of British Gas) being the most notable. We believe these companies to be well positioned in their respective businesses, well financed and capable of supporting good and growing dividends.
The portfolio emphasis remains focussed on well capitalised, strongly cash-generative businesses with growing international franchises. Such companies include GlaxoSmithKline, Unilever, Reckitt & Benckiser and Vodafone. Another new position introduced was Diageo, the international branded beverages producer, although we were only able to build around half of the desired position due to the share price moving beyond what we felt comfortable to pay. The deleveraging theme led us to make an investment in Intermediate Capital, a company providing mezzanine finance to mid-sized companies in Europe and offering a very attractive yield. Small initial investments were made in both GKN and Prudential but these were subsequently sold due to strong price performance post acquisition.
The Company participated in the £200m C share placing of Doric Nimrod Air Two Limited, a specialist aircraft leasing vehicle managed by Guernsey based Doric Nimrod. This vehicle leases Airbus A380 aircraft to Emirates Airlines and yields 9% with potential for mid-teens returns over its 12 year life.
Stocks sold included BP, following recovery from the Gulf of Mexico disaster; Standard Life and Aviva to reduce exposure to the volatile life assurance sector; whilst some profit was also taken in Legal & General.
Performance across the UK portfolio was in general satisfactory with the defensive holdings performing particularly well in the more difficult market environment. However, the best performance over the year was recorded by William Hill, the bookmaker, following a series of positive trading statements and better than expected dividend increases. The holding was top sliced into this strong performance as the valuation became a little less attractive.
On the negative side was the performance of Tesco and BHP Billiton, with the former issuing a profit warning and the latter being hit by falling metal prices. The Company's holding in Man Group was also a disappointing performer as the company's main trading strategy run by AHL suffered poor performance and consequent investor outflows. This was particularly galling as we had previously sold the position and were tempted back in following significant share price weakness, which has unfortunately continued post investment. However, more positive was the performance of emerging market fund manager Ashmore Group, which offers attractive exposure to the growth in capital markets in the developing economies.
Dividend growth from the portfolio was generally strong over the year and we anticipate further healthy growth in the coming year.
Overseas Equities (23.3%)
Exposure to overseas equity markets was increased as further diversification was sought to equity positions in economies with superior financial positions and growth prospects. Several new funds were introduced to the portfolio with our focus being on managers investing for dividend growth.
The Company's first actively managed position in the US equity market was introduced through an investment in the Cullen North American High Dividend Value Fund, whilst existing Asian equity holdings were increased by the addition of the Prusik Asian Equity Income Fund. Elsewhere emerging market equity exposure was topped up through new investments in the closed-end Aberdeen Latin American Income Fund and the UBS Emerging Markets Equity Income Fund. In addition further top-up investment was made in the Somerset Emerging Markets Dividend Growth Fund. Towards the end of the year, and following poor performance, European equity exposure was increased through an initial investment in the Henderson European Focus Trust, which was bought on an attractive discount to net asset value.
Existing positions in general performed well against their respective benchmarks, although the overall negative environment for
equities meant that several holdings still produced negative returns. Amongst the best performers were the Asian funds held, with all producing positive returns despite a negative outturn from their Asian equity benchmark. Best amongst these was the Newton Asian Equity Income Fund which returned 9%, some 17% better than the benchmark. This was closely followed by the Schroder Oriental Income Fund which returned close to 8%.
Another noteworthy performer was the Somerset Emerging Markets Dividend Growth Fund, which produced a return of 2% despite the emerging market index falling by 9%. European holdings also outperformed their benchmark, although their returns were still negative with the European markets being amongst the worst performers over the year. US holdings underperformed with the covered call strategies adopted failing to match the market outturn.
Fixed Interest (17.9%)
Investment in this area was reduced over the course of the year to provide funds for the Company's increased equity exposure. Our preference for 'real assets' is borne from concerns that inflation, whilst subdued at present, may become a significant problem should the very loose monetary policy being adopted in many developed economies continue. Within the fixed interest markets we still see some value in high yield corporate bonds but have been keen to reduce duration and interest rate risk, with rates in the developed economies at historically very low levels. We see little investment value in the safer sovereign bond markets where inflation and funding risks are not being priced into yields.
Holdings in preference shares have been trimmed, whilst closed-ended fund exposure was also reduced with the outright sale of the City Merchants Investment Trust (a very successful investment for the Company since acquisition in late 2008) and a top slicing of the holding in Invesco Leveraged High Yield Trust. Elsewhere holdings in the AXA US Short Duration High Yield Fund and the M&G European Loan Fund were also reduced.
Although we remain generally cautious on banks, the Company's holding in the Lloyds Banking Group 7.975% contingent convertible bond was increased on a yield of over 11%. This looked attractive given the much improved balance sheet position at the bank.
The Company ended the period with its main fixed interest exposures being in high yield corporate bonds, senior loans and preference shares. A position was also maintained in emerging market corporate debt.
Alternative Assets (18.3%)
The main change in the alternative asset area was the sale of the Company's structured product positions. Having seen a recovery in pricing in these products it was felt that they no longer gave an attractive enough return to compensate for counterparty risks. Hedge fund exposure was reduced following a period of disappointing performance with the full sale of the Liontrust European Absolute Return Fund and a reduction in the Signet Global Fixed Interest Strategies Fund. Part of the proceeds from the latter was reinvested into the existing holding in Acencia Debt Strategies, a hedge fund trading on a substantial discount to net asset value and offering exposure to a range of managers operating in the distressed debt markets.
Private equity positions performed well with A J Bell Holdings, one of the leading SIPP providers in the UK, reporting excellent results for the year to 30 September 2011 with revenue and profits increased by 18% and dividends by 14%. We feel these results fully justified the carried value of 500p per share, which was improved from 400p in June 2011. This valuation was further underpinned late in the period when negotiations were concluded with Invesco Perpetual to sell 35% of the Company's holding at this level. We remain confident of the prospects for this well managed and strategically positioned company.
Partners Group Global Opportunities Fund ("PGGO") had another good year with the net asset value rising by 15.6%. The fund opened for redemptions in December and the opportunity to bank some profits was taken with around 9% of the holding being redeemed at a 5% discount (dilution levy) in December. A further 9% of the shares were redeemed in March, with proceeds being received after the year end. The residual holding is still being carried at a 20% discount to net asset value, reflecting the illiquidity of this fund. However, we would expect further redemptions to be achieved over the course of the year as the fund has received the proceeds from several successful realisations in the early part of
2012.
The proceeds from the PGGO redemptions, together with the sale of the Company's profitable investment in the Standard Life European Private Equity Fund, have been reinvested into the quoted Princess Private Equity Limited. This is a fund also managed by Partners Group, which was bought on a 35% discount to net asset value (nav) and offering a yield of 8%. The underlying portfolio investments are predominantly in limited partnerships, which are now maturing having been set up in 2006/07. This should result in further successful realisations over the next 18 months, leading to a further increase in the fund's nav and
cash-flows to support the high level of dividends.
The balance within the Company's infrastructure-linked investments was changed during the course of the year with the holding in HICL Infrastructure being sold at a premium to NAV. Proceeds were reinvested into the C share issue by the GCP Infrastructure Fund. This infrastructure specialist invests in providing debt financing to UK projects through a master fund structure and offers a very attractive income yield of 7.5%. We believe the returns from debt financing will be better than that achieved by infrastructure equity investors, with lower risks. This is a good example of opportunities being created by bank deleveraging at present, as previously banks would have been the main providers of debt to such projects.
Property (6.0%)
Exposure to property was reduced over the course of the year with the outright sale of the Threadneedle Property Unit Trust, which was sold on concerns over the prospects for UK commercial property. The holding in the Celsius Real Estate Income Fund was downsized due to the relatively large size within the portfolio.
Returns from property investments have again been disappointing, although the holding in Macau Property Opportunities Fund has seen a year of significant progress, which is currently not reflected in the share price. The fund paid a special dividend in June following the sale of one of its developments and the net asset value has continued to advance, buoyed by the very strong Macau economy. The holding in the Celsius Asian Real Estate Income Fund recorded a negative return, despite its very high dividend yield of 14%, which is generated from a portfolio of 20 Asian REITs complemented by a covered call strategy.
Outlook
We have felt for some time that investment markets are likely to be range bound but also prone to periods of volatility. This view has certainly been vindicated over the course of the year. Concerns over the European sovereign debt crisis seem destined to cap market upside, whilst at the same time a relatively healthy corporate sector, trading at undemanding valuations, will continue to provide support to risk assets in a low interest rate environment.
Increasingly it would appear that cycles will be short and more policy-led. In a world full of uncertainties we have taken a cautious approach to investing in a relatively higher risk asset, namely equities. When viewing the alternatives we see equities as offering the best risk against return trade off. Financially strong companies investing in growing their developing market business franchises, whilst paying regular and growing dividends are likely, we feel, to achieve returns significantly in advance of other assets. Such opportunities do exist and the portfolio is very focussed on these. Meanwhile the end of the 25 year long credit boom is throwing up other opportunities, which should, over a period of years, produce very positive returns for patient investors.
The investment policy changes agreed by shareholders in January will be crucial to the delivery of future returns, we believe. The ability to both protect capital and enhance future returns has been significantly improved. However, income will remain a very important element of returns to the Company, and indeed all investors, in the difficult years ahead.
Alan Borrows
Simon Callow
Midas Capital Partners Limited
21 June 2012
3. STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and 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 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.
The Directors are responsible for keeping proper 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 its financial statements comply with the Companies Act 2006, where applicable. They are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations. The financial statements are published on www.mamfundsplc.com/migt/ index.asp which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable UK Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit or 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 the Company faces.
For Midas Income & Growth Trust PLC
Hubert Reid
Chairman
21 June 2012
4. BUSINESS REVIEW
A review of the Company's activities is given in the Chairman's Statement and the Manager's Review. This includes a review of the business of the Company and its principal activities, recommended dividends, likely future developments of the business and details of the Company's policy on share capital management. The principal risks and uncertainties associated with the Company are detailed below and in note 18 to the financial statements. The Company has exposure to financial instruments, details of which are disclosed in note 18 to the financial statements.
Principal Activity
The business of the Company is that of an investment trust investing in a diversified portfolio principally comprising UK and overseas equities and fixed interest securities but also other asset classes. By investing in overseas equities as well as diversifying into property, bonds, alternative assets and structured products, the Company seeks to take advantage of a wide range of investment opportunities and reduce the risk profile of the Company's portfolio.
Status
The Company is registered as a public limited company, and is an investment company as defined by Section 833 of the Companies Act 2006 and is registered in England and Wales with registered number 03173591. The Company is also a member of the Association of Investment Companies ("AIC").
The Company has been approved by HMRC as an investment trust for the purposes of Section 1159 of the Corporation Tax Act 2010 for the year ended 30 April 2011. The Directors are of the opinion that the Company has conducted its affairs for the year ended 30 April 2012 so as to be able to continue to obtain approval as an investment trust under Sections 1158 - 1159 of the Corporation Tax Act 2010 for that year, although approval for that year would be subject to review were there to be any enquiry under the Corporate Tax Self Assessment regime.
The Company intends to manage its affairs so as to be a qualifying investment for inclusion in an Individual Savings Account ("ISA") and it is the Directors' intention that the Company should continue to qualify.
Principal Risks and Uncertainties
Investment and Market Risks:
Managing a portfolio of shares and debt security investments necessarily involves certain risks, the more important of which are set out below. A significant proportion of the assets of the Company may be invested in debt security investments and overseas equities. Whilst this broader spread of investments is intended to reduce the volatility and risk profile of the Company's portfolio this cannot be assured.
Shares:
The market value of the Ordinary shares, as well as being affected by the net asset value, also takes into account their supply and demand. The market value of an Ordinary share can fluctuate and may not always reflect the underlying net asset value of the investee company. Investment in the Company should be regarded as long term in nature. There can be no guarantee that appreciation in the value of the Company's investments will occur and investors may not get back the full value of their original investment.
Investment Objective:
There is no guarantee that the investment policy adopted by the Company will provide the returns sought by the Company.
Borrowings:
The Company currently utilises gearing in the form of bank borrowings (see note 11). Gearing has the effect of magnifying market falls and increasing market gains.
Currency:
A proportion of the Company's portfolio may be invested in assets denominated in currencies other than sterling. This will increase the currency risk that the Company is exposed to as a result of fluctuations in the exchange rate between the denomination of the investments and the sterling denomination of the Company's base currency.
Dividends:
The ability of the Company to pay dividends in respect of the Ordinary shares and any future dividend growth will depend on the level of income received from its investments. Accordingly, the amount of dividends paid to shareholders may fluctuate.
Discount:
While the Board has a discount management policy, the ability to implement such a policy is dependent on a number of factors including; the ability to buy back shares in the market, the ability to fund share buybacks, the authority to buy back shares being renewed annually and the Board's discretion over the making and timing of any buybacks.
Key Individuals:
The Company is substantially dependent on the services of key individuals working for its Manager, namely Alan Borrows and Simon Callow. The loss of either or both of these individuals could have an adverse effect on the Company's performance.
Taxation:
Any change in the Company's tax status or in taxation legislation (including the tax treatment of dividends or other investment income received by the Company) or failure to satisfy the conditions of Sections 1158 - 1159 of the Corporation Tax Act 2010 (including the requirement for a listing) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post tax returns to shareholders.
5. INCOME STATEMENT
|
|
|
Year ended 30 April 2012 |
Year ended 30 April 2011 |
||||
|
|
Notes |
Revenue |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total |
|
(Losses)/gains on investments |
9 |
- |
(2,745) |
(2,745) |
- |
2,597 |
2,597 |
|
Income |
2 |
3,075 |
4 |
3,079 |
2,796 |
50 |
2,846 |
|
Investment management fee |
3 |
(225) |
(225) |
(450) |
(240) |
(240) |
(480) |
|
VAT recoverable on investment management fees |
|
- |
- |
- |
25 |
25 |
50 |
|
Administrative expenses |
4 |
(418) |
- |
(418) |
(344) |
- |
(344) |
|
Exchange (losses)/gains |
15 |
- |
(8) |
(8) |
- |
14 |
14 |
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|
Net return on ordinary activities before interest payable and taxation |
|
2,432 |
(2,974) |
(542) |
2,237 |
2,446 |
4,683 |
|
Finance costs |
5 |
(118) |
(118) |
(236) |
(119) |
(119) |
(238) |
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|
Net return on ordinary activities before taxation |
|
2,314 |
(3,092) |
(778) |
2,118 |
2,327 |
4,445 |
|
Taxation |
6 |
- |
- |
- |
(3) |
- |
(3) |
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|
Return on ordinary activities after taxation |
|
2,314 |
(3,092) |
(778) |
2,115 |
2,327 |
4,442 |
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|
Return per share (pence) |
8 |
5.80 |
(7.75) |
(1.95) |
5.37 |
5.91 |
11.28 |
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
The total column of this statement represents 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 in the year.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.
The accompanying notes are an integral part of the financial statements.
6. BALANCE SHEET
|
|
Notes |
As at |
As at |
|
Non-current assets |
|
|
|
|
Investments at fair value through profit or loss |
9 |
52,811 |
57,966 |
|
|
|
__________ |
__________ |
|
Current assets |
|
|
|
|
Debtors and prepayments |
10 |
347 |
551 |
|
Cash and short term deposits |
|
1,828 |
472 |
|
|
|
__________ |
__________ |
|
|
|
2,175 |
1,023 |
|
|
|
__________ |
__________ |
|
Creditors: amounts falling due within one year |
11 |
|
|
|
Bank loan |
|
(7,000) |
(7,000) |
|
Other creditors |
|
(97) |
(682) |
|
|
|
__________ |
__________ |
|
|
|
(7,097) |
(7,682) |
|
|
|
__________ |
__________ |
|
Net current liabilities |
|
(4,922) |
(6,659) |
|
|
|
__________ |
__________ |
|
Net assets |
|
47,889 |
51,307 |
|
|
|
__________ |
__________ |
|
Capital and reserves |
|
|
|
|
Called-up share capital |
12 |
9,974 |
10,012 |
|
Share premium account |
|
1,445 |
1,445 |
|
Special reserve |
|
41,783 |
41,954 |
|
Capital redemption reserve |
|
2,099 |
2,061 |
|
Capital reserve |
13 |
(8,047) |
(4,955) |
|
Revenue reserve |
|
635 |
790 |
|
|
|
__________ |
__________ |
|
Equity shareholders' funds |
|
47,889 |
51,307 |
|
|
|
__________ |
__________ |
|
Net asset value per share (pence) |
17 |
120.03 |
128.12 |
|
|
|
__________ |
__________ |
7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
|
For the year ended 30 April 2012 |
|
|
|
|
|
|
|
|
|
|
Share premium account £'000 |
|
Capital |
|
|
|
|
Balance at 30 April 2011 |
10,012 |
1,445 |
41,954 |
2,061 |
(4,955) |
790 |
51,307 |
|
Purchase of own shares for cancellation |
(38) |
- |
(171) |
38 |
- |
- |
(171) |
|
Return on ordinary activities after taxation |
- |
- |
- |
- |
(3,092) |
2,314 |
(778) |
|
Dividends paid (see note 7) |
- |
- |
- |
- |
- |
(2,469) |
(2,469) |
|
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
|
Balance at 30 April 2012 |
9,974 |
1,445 |
41,783 |
2,099 |
(8,047) |
635 |
47,889 |
|
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
For the year ended 30 April 2011
|
|
|
Share premium account £'000 |
|
|
|
|
|
|
|
Balance at 30 April 2010 |
9,528 |
- |
41,954 |
616 |
2,061 |
(7,898) |
1,223 |
47,484 |
|
Exercise of warrants |
484 |
1,445 |
- |
(616) |
- |
616 |
- |
1,929 |
|
Return on ordinary activities after taxation |
- |
- |
- |
- |
- |
2,327 |
2,115 |
4,442 |
|
Dividends paid (see note 7) |
- |
- |
- |
- |
- |
- |
(2,548) |
(2,548) |
|
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
______ |
|
Balance at 30 April 2011 |
10,012 |
1,445 |
41,954 |
- |
2,061 |
(4,955) |
790 |
51,307 |
|
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
______ |
|
|
|
|
|
|
|
|
|
|
|
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend. |
||||||||
|
The accompanying notes are an integral part of the financial statements. |
||||||||
8. CASHFLOW STATEMENT
|
|
|
Year ended |
Year ended |
||
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Net cash inflow from operating activities |
14 |
|
2,286 |
|
1,997 |
|
|
|
|
|
|
|
|
Servicing of finance |
|
|
|
|
|
|
Bank and loan interest paid |
|
|
(250) |
|
(219) |
|
|
|
|
|
|
|
|
Taxation |
|
|
|
|
|
|
Tax payable on non UK income |
|
|
- |
|
(3) |
|
|
|
|
|
|
|
|
Financial investment |
|
|
|
|
|
|
Purchases of investments |
|
(16,814) |
|
(15,359) |
|
|
Sales of investments |
|
18,782 |
|
13,584 |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash inflow/(outflow) from financial investment |
|
|
1,968 |
|
(1,775) |
|
Equity dividends paid |
|
|
(2,469) |
|
(2,548) |
|
|
|
|
_______ |
|
_______ |
|
Net cash inflow/(outflow) before financing |
|
|
1,535 |
|
(2,548) |
|
|
|
|
|
|
|
|
Financing |
|
|
|
|
|
|
Buyback of shares |
|
(171) |
|
- |
|
|
Exercise of warrants |
|
- |
|
1,929 |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash (outflow)/inflow from financing |
|
|
(171) |
|
1,929 |
|
|
|
|
_______ |
|
_______ |
|
Increase/(decrease) in cash |
|
|
1,364 |
|
(619) |
|
|
|
|
_______ |
|
_______ |
|
Reconciliation of net cash flow to movements in net debt |
|
|
|
|
|
|
Increase/(decrease) in cash as above |
|
|
1,364 |
|
(619) |
|
Exchange movements |
|
|
(8) |
|
14 |
|
|
|
|
_______ |
|
_______ |
|
Movement in net debt in the year |
|
|
1,356 |
|
(605) |
|
Net debt at 1 May |
|
|
(6,528) |
|
(5,923) |
|
|
|
|
_______ |
|
_______ |
|
Net debt at 30 April |
15 |
|
(5,172) |
|
(6,528) |
|
|
|
|
_______ |
|
_______ |
The accompanying notes are an integral part of the financial statements.
9. NOTES TO THE FINANCIAL STATEMENTS:
For the year ended 30 April 2012
|
1 |
Accounting policies |
|
|
|
(a) |
Basis of preparation and going concern |
|
|
|
The financial statements have been prepared in accordance with the applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The Directors believe this is appropriate for the reasons outlined in the Annual Report. |
|
|
|
|
|
|
(b) |
Investments |
|
|
|
Investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured as fair value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices or closing prices for SETS (London Stock Exchange's electronic trading service) stocks sourced from the London Stock Exchange. Unlisted investments held are not quoted on a recognised stock exchange, however there is a quoted price available, and is considered by the Directors to approximate fair value. The unquoted investments held (see note 9) are valued by the Directors using primary valuation techniques, such as earnings multiples, recent transactions and net assets, which equate to their fair values. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Income Statement. |
|
|
|
|
|
|
(c) |
Income |
|
|
|
Income from investments (other than special dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex dividend. Special dividends are credited to capital or revenue, according to the circumstances. The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities and shares. Interest receivable on short term deposits is treated on an accruals basis. |
|
|
|
|
|
|
(d) |
Expenses |
|
|
|
All expenses are accounted for on an accrual basis. Expenses are charged to revenue within the Income Statement except as follows: |
|
|
|
• transaction costs on the acquisition or disposal of investments are charged to capital; |
|
|
|
• expenses are charged to the capital reserve where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect the investment management fee and loan interest on the £7 million bank loan have been allocated 50% to capital and 50% to revenue within the Income Statement; |
|
|
|
• loan break costs are charged 100% to the capital reserve within the Income Statement. |
|
|
|
|
|
|
(e) |
Capital reserve |
|
|
|
Gains or losses on realisation of investments and changes in fair values of investments which are readily convertible to cash, without accepting adverse terms, are transferred to the capital reserve. |
|
|
|
|
|
|
|
Also, expenses and finance costs, together with the related taxation effect, are charged to this reserve in accordance with (d) above. |
|
|
|
|
|
|
(f) |
Deferred taxation |
|
|
|
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred taxation is provided using the liability method on all timing differences, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in future against which the deferred tax asset can be offset. |
|
|
|
|
|
|
|
Due to the Company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. |
|
|
|
|
|
|
(g) |
Foreign currency |
|
|
|
Transactions involving foreign currencies are converted to sterling, being the Company's functional currency, at the rate ruling at the date of the transaction. |
|
|
|
|
|
|
|
Translation of all other foreign currency balances including foreign assets and foreign liabilities is at the middle rates of exchange at the year end. Differences arising from translation are treated as a gain or loss to capital or revenue within the Income Statement depending upon the nature of the gain or loss. |
|
2 |
Income |
2012 |
2011 |
|
|
Income from investments |
|
|
|
|
UK franked income |
1,580 |
1,354 |
|
|
UK unfranked dividend income |
507 |
400 |
|
|
UK unfranked interest income |
280 |
291 |
|
|
Overseas dividends |
697 |
700 |
|
|
|
________ |
________ |
|
|
|
3,064 |
2,745 |
|
|
|
________ |
________ |
|
|
Other income |
|
|
|
|
Deposit interest |
11 |
3 |
|
|
Interest from HM Revenue & Customs |
- |
48 |
|
|
|
11 |
51 |
|
|
|
________ |
________ |
|
|
Total income |
3,075 |
2,796 |
|
|
|
________ |
________ |
|
|
|
|
|
|
|
|
2012 |
2011 |
|
|
Income from investment |
|
|
|
|
Listed UK |
1,697 |
1,631 |
|
|
Listed overseas |
379 |
311 |
|
|
Unlisted |
944 |
803 |
|
|
Stock dividend |
44 |
- |
|
|
|
________ |
________ |
|
|
|
3,064 |
2,745 |
|
|
|
________ |
________ |
|
|
|
2012 |
2011 |
||||
|
3 |
Investment management and performance fees |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Investment management fee |
225 |
225 |
450 |
240 |
240 |
480 |
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
Midas Capital Partners Limited ('Midas') were appointed the Investment Manager on 19 August 2005 and the management fee payable to Midas for the period to 31 December 2011 was 1% of net assets along with a performance fee (see below). From 1 January 2012 the annual management fee was calculated by reference to the Company's market capitalisation, with the rate reduced to 0.9%, and the performance fee was terminated (see below). The agreement is terminable by either party on twelve months' notice. The fee is chargeable 50% to capital and 50% to revenue within the Income Statement. The balance due to Midas at the year end was £31,000 (2011 - £43,000).
|
|
|
2012 |
2011 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Performance fee |
n/a |
n/a |
n/a |
- |
- |
- |
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
With effect from 1 January 2012, the performance fee arrangement was terminated.
|
|
|
2012 |
2011 |
||||
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
||
|
|
Administration fees |
132 |
- |
132 |
110 |
- |
110 |
|
|
Directors' fees |
60 |
- |
60 |
60 |
- |
60 |
|
|
Printing and stationery |
11 |
- |
11 |
14 |
- |
14 |
|
|
Auditors' remuneration: |
|
|
|
|
|
|
|
|
- audit (inclusive of VAT) |
29 |
- |
29 |
27 |
- |
27 |
|
|
- for review of half yearly financial report (inclusive of VAT) |
7 |
- |
7 |
7 |
- |
7 |
|
|
- other services (inclusive of VAT) |
4 |
- |
4 |
- |
- |
- |
|
|
Other |
175 |
- |
175 |
126 |
- |
126 |
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
|
|
|
418 |
- |
418 |
344 |
- |
344 |
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
The Company has an agreement with Aberdeen Asset Managers Limited ("AAM") for the provision of administration services which is delegated to Aberdeen Asset Management PLC with fees payable on the following basis:
- £94,000 per annum plus VAT where the Company's net asset value is less than £50 million;
- £115,000 per annum plus VAT where the Company's net asset value exceeds £50 million;
The net asset position is assessed at 1 August for each year the agreement is in place. At this date the fee will also be increased, but not decreased, by the movement in RPI over the twelve month period.
The agreement is terminable by either party on three months' notice. No sum was due to AAM at the year end (2011 - £nil).
As reported in the Chairman's Statement the Company's agreement with AAM for the provision of administration services will be terminated on 1 July 2012 and AAM will be replaced by R & H Fund Services (UK) Limited who will assume their duties on the same day.
|
5 |
Finance costs |
2012 |
2011 |
||||||||
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
||||||
|
|
On bank loans and overdrafts |
118 |
118 |
236 |
119 |
119 |
238 |
||||
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
|
|||
|
|
|
|
|
|
|
|
|
||||
Finance costs relate to interest charged on the revolving loan facility, details of which are disclosed in note 11.
|
|
|
2012 |
2011 |
||||||||
|
6 |
Taxation |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
||||
|
|
(a) |
Analysis of charge for the year |
|
|
|
|
|
|
|||
|
|
|
Overseas withholding tax |
- |
- |
- |
3 |
- |
3 |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
_______ |
______ |
______ |
______ |
______ |
______ |
|
|||
|
|
|
|
|||||||||
|
|
(b) |
Factors affecting the tax charge for the year |
|||||||||
|
|
|
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. |
|||||||||
|
|
2012 |
2011 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Net profit/(loss) on ordinary activities before taxation |
2,314 |
(3,092) |
(778) |
2,118 |
2,327 |
4,445 |
|
Corporation tax at 25.83% (2011 - 27.83%) |
598 |
(799) |
(201) |
589 |
648 |
1,237 |
|
Effects of: |
|
|
|
|
|
|
|
Non-taxable UK dividends |
(408) |
- |
(408) |
(376) |
- |
(376) |
|
Non-taxable overseas dividends |
(249) |
- |
(249) |
(260) |
- |
(260) |
|
Movement in unutilited management expenses |
59 |
88 |
147 |
47 |
80 |
127 |
|
Income taxable in different years |
- |
- |
- |
3 |
- |
3 |
|
Losses/(gains) on investments not taxable |
- |
711 |
711 |
- |
(728) |
(728) |
|
|
_______ |
______ |
______ |
_______ |
______ |
______ |
|
Current tax payable |
- |
- |
- |
3 |
- |
3 |
|
|
_______ |
______ |
______ |
_______ |
______ |
______ |
|
|
|
|
|
|
|
|
c) Factors that may affect future tax changes
There was no provision for deferred taxation made for either this year or the previous year. The Company has not recognised a deferred tax asset of £1,331,000 (2011 - £1,294,000) arising as a result of non-trading deficits and eligible unrelieved foreign tax. These deficits will only be utilised if the Company has profits chargeable to corporation tax in future accounting periods. It is considered too uncertain that the Company will generate such profits and therefore no deferred tax asset has been recognised.
|
7 |
Dividends |
2012 |
2011 |
|
|
Amounts recognised as distributions to equity holders in the period: |
|
|
|
|
Fourth interim dividend for 2011 - 1.63p (2010 - 1.63p) |
650 |
621 |
|
|
First interim dividend for 2012 - 1.63p (2011 - 1.63p) |
650 |
621 |
|
|
Second interim dividend for 2012 - 1.63p (2011 - 1.63p) |
650 |
653 |
|
|
Third interim dividend for 2012 - 1.30p (2011 - 1.63p) |
519 |
653 |
|
|
|
_______ |
_______ |
|
|
|
2,469 |
2,548 |
|
|
|
_______ |
_______ |
A fourth interim dividend has been declared for the year of 1.30p (2011 - 1.63p) per share, amounting to £519,000 (2011 - £653,000). There is no final dividend proposed for the year (2011 - nil).
We 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 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £2,314,000 (2011 - £2,115,000).
|
|
|
2012 |
2011 |
|
|
First interim dividend for 2012 - 1.63p (2011 - 1.63p) |
650 |
621 |
|
|
Second interim dividend for 2012 - 1.63p (2011 - 1.63p) |
650 |
653 |
|
|
Third interim dividend for 2012 - 1.30p (2011 - 1.63p) |
519 |
653 |
|
|
Fourth interim dividend for 2012 - 1.30p (2011 - 1.63p) |
519 |
650 |
|
|
|
_______ |
______ |
|
|
|
2,338 |
2,577 |
|
|
|
_______ |
______ |
|
8 |
Return per Ordinary share |
||||||
|
|
The return per Ordinary share is based on the following figures: |
||||||
|
|
|
|
|
||||
|
|
|
2012 |
2011 |
||||
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
||
|
|
|
5.80 |
(7.75) |
(1.95) |
5.37 |
5.91 |
11.28 |
|
|
|
______ |
______ |
______ |
_______ |
______ |
______ |
|
|
|
|
|
|
|
|
|
The revenue return per Ordinary share is calculated on net revenue on ordinary activities after taxation for the year of £2,314,000 (2011 - £2,115,000) and on 39,903,738 (2011 - 39,394,491) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.
The capital return per Ordinary share is calculated on net capital return for the year of (£3,092,000) (2011 - returns of £2,327,000) and on 39,903,738 (2011 - 39,394,491) Ordinary shares.
The total return per Ordinary share is calculated on the total return for the year of (£778,000) (2011 - returns of £4,442,000) and on 39,903,738 (2011 - 39,394,491) Ordinary shares.
|
9 |
Investments |
Listed |
Unquoted |
Total |
||
|
|
Fair value through profit or loss: |
|
|
|
||
|
|
Opening book cost |
37,904 |
21,621 |
59,525 |
||
|
|
Opening fair value losses on investments held |
(1,028) |
(531) |
(1,559) |
||
|
|
|
_______ |
______ |
______ |
||
|
|
Opening valuation |
36,876 |
21,090 |
57,966 |
||
|
|
Movements in year: |
|
|
|
||
|
|
Purchases at cost |
9,973 |
6,291 |
16,264 |
||
|
|
Sales - proceeds |
(13,827) |
(4,847) |
(18,674) |
||
|
|
- profit/(loss) on sales |
79 |
(1,731) |
(1,652) |
||
|
|
Movement in fair value of investments held |
(1,203) |
110 |
(1,093) |
||
|
|
|
_______ |
______ |
______ |
||
|
|
Closing fair value of investments held |
31,898 |
20,913 |
52,811 |
||
|
|
|
_______ |
______ |
______ |
||
|
|
Closing book cost |
34,129 |
21,334 |
55,463 |
||
|
|
Closing fair value losses on investments held |
(2,231) |
(421) |
(2,652) |
||
|
|
|
_______ |
______ |
______ |
||
|
|
|
31,898 |
20,913 |
52,811 |
||
|
|
|
_______ |
______ |
______ |
||
|
|
|
|
|
|
||
|
|
(Losses)/gains on investments |
|
2012 |
2011 |
||
|
|
Losses on sales |
|
(1,652) |
(2,069) |
||
|
|
(Decrease)/increase in fair value of investments held |
|
(1,093) |
4,666 |
||
|
|
|
|
_______ |
______ |
||
|
|
|
|
(2,745) |
2,597 |
||
|
|
|
|
_______ |
______ |
||
|
|
|
|||||
|
|
Transaction costs |
|||||
|
|
During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in the Income Statement. The total costs were as follows: |
|||||
|
|
|
|
|
|||
|
|
|
2012 |
2011 |
|||
|
|
Purchases |
57 |
24 |
|||
|
|
Sales |
21 |
20 |
|||
|
|
|
_______ |
______ |
|||
|
|
|
78 |
44 |
|||
|
|
|
_______ |
______ |
|||
|
|
|
|
|
|||
|
10 |
Debtors: amounts falling due within one year |
2012 |
2011 |
|||
|
|
Dividends and interest receivable |
333 |
438 |
|||
|
|
Prepayments and other debtors |
14 |
5 |
|||
|
|
Amounts due from brokers |
- |
108 |
|||
|
|
|
_______ |
______ |
|||
|
|
|
347 |
551 |
|||
|
|
|
_______ |
______ |
|||
|
11 |
Creditors: amounts falling due within one year |
2012 |
2011 |
|
|
Bank loan |
7,000 |
7,000 |
|
|
Amounts due to brokers |
- |
550 |
|
|
Interest payable |
8 |
22 |
|
|
Other creditors |
89 |
110 |
|
|
|
_______ |
______ |
|
|
|
7,097 |
7,682 |
|
|
|
_______ |
______ |
The Company has a £7 million revolving loan facility in place with Royal Bank of Scotland plc, of which at 30 April 2012 the full amount had been drawn down at an all-in rate of 2.247%. Subsequent to the year end on 14 May 2012 the loan was rolled over until 14 June 2012 at an all-in rate of 2.237%. On 14 June 2012 the loan was rolled forward for a further month to 16 July 2012 at an all-in rate of 2.22073%.
The termination date of the facility is 25 July 2013. The Company anticipates refinancing the facility through a similar arrangement.
|
12 |
Called up share capital |
2012 |
2011 |
|
|
Authorised |
|
|
|
|
390,000,000 (2011 - 390,000,000) Ordinary shares of 25p |
97,500 |
97,500 |
|
|
|
_______ |
______ |
|
|
Called-up, allotted and fully paid |
|
|
|
|
39,896,361 (2011 - 40,046,361) Ordinary shares of 25p |
9,974 |
10,012 |
|
|
|
_______ |
______ |
During the year, 150,000 (2011 - nil) Ordinary shares were bought back for immediate cancellation at a price of 113.25p each, for a total cost of £171,065 (2011 - £nil).
|
13 |
Capital reserve |
2012 |
2011 |
|
|
Year ended 30 April |
|
|
|
|
At 30 April 2011 |
(4,955) |
(7,898) |
|
|
Movement in fair value (losses)/gains |
(2,745) |
2,597 |
|
|
Foreign exchange movement |
(8) |
14 |
|
|
Exercise of warrants |
- |
616 |
|
|
VAT recoverable on capitalised investment management fees |
- |
25 |
|
|
Capitalised expenses |
(343) |
(359) |
|
|
Capitalised income |
4 |
50 |
|
|
|
_______ |
______ |
|
|
At 30 April |
(8,047) |
(4,955) |
|
|
|
_______ |
______ |
The capital reserve includes investment holding losses amounting to £2,652,000 (2011 - losses of £1,559,000), as disclosed in note 9.
|
14 |
Reconciliation of net revenue before finance costs and taxation to net cash inflow from operating activities |
2012 |
2011 |
|
|
Net (loss)/return before finance costs and taxation |
(542) |
4,683 |
|
|
Adjustments for: |
|
|
|
|
Losses/(gains) on investments |
2,745 |
(2,597) |
|
|
Exchange losses/(gains) |
8 |
(14) |
|
|
Decrease/(increase) in accrued income |
105 |
(103) |
|
|
(Increase)/decrease in other debtors |
(9) |
7 |
|
|
(Decrease)/increase in other creditors |
(21) |
21 |
|
|
|
_______ |
________ |
|
|
Net cash inflow from operating activities |
2,286 |
1,997 |
|
|
|
_______ |
________ |
|
15 |
Analysis of changes in net debt |
1 May |
Cash flow |
Exchange movements |
30 April |
|
|
Cash and short term deposits |
472 |
1,364 |
(8) |
1,828 |
|
|
Debt due in less than one year |
(7,000) |
- |
- |
(7,000) |
|
|
|
_______ |
_______ |
_______ |
________ |
|
|
|
(6,528) |
1,364 |
(8) |
(5,172) |
|
|
|
_______ |
_______ |
_______ |
________ |
16 Commitments and contingencies
As at 30 April 2012 there were no contingent liabilities (2011 - nil).
As at 30 April 2012 there was no commitment fee payable to The Royal Bank of Scotland as the bank loan was fully drawn down (2011 - nil).
|
17 |
Net asset value per equity share |
2012 |
2011 |
|
|
Net assets attributable |
£47,889,000 |
£51,307,000 |
|
|
Number of Ordinary shares in issue |
39,896,361 |
40,046,361 |
|
|
Net asset value per Ordinary share |
120.03p |
128.12p |
18 Risk management, financial assets and liabilities
The Company's financial instruments comprise:
- Equities and debt security investments that are held in accordance with the Company's investment objectives;
- Term loans and bank overdrafts, the main purpose of which are to raise finance for the Company's operations; and
- Cash and liquid resources that arise directly from the Company's operations.
The main risks arising from the Company's financial instruments are market risk, interest rate risk and foreign currency risk. There may also be exposure to interest rate risk from time to time. The Board regularly reviews and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged since the inception of the Company.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not considered to be significant as the company's assets comprise of mainly readily realisable securities, which can be sold to meet funding commitments if necessary.
Market risk
Market risk arises mainly from uncertainty about future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements.
To mitigate the risk the Board's investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined accounting, market and sector analysis, with the emphasis on long term investments. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy.
A list of the investments held by the Company at 30 April 2012 is shown below. All investments are stated at fair value.
Interest rate risk
Financial assets
Prices of bonds, open ended investment companies and floating rate notes together with preference share yields, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.
Returns from bonds, floating rate notes and preference shares are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.
Financial liabilities
The Company finances its operations through the use of a loan facility. The Board sets borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis.
The interest rate profile of the Company (excluding short term debtors and creditors) at 30 April 2012 and 30 April 2011 was as follows:
|
|
Total (as per balance sheet £'000 |
Floating rate £'000 |
Fixed rate |
Financial assets on which no interest is paid £'000 |
Weighted average interest rate A |
Weighted average period for which rate is fixed B |
||||||
|
Type |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities |
31,876 |
31,560 |
- |
- |
- |
- |
31,876 |
31,560 |
- |
- |
- |
- |
|
OEICs |
14,017 |
17,085 |
- |
- |
- |
- |
14,017 |
17,085 |
- |
- |
- |
- |
|
Corporate Bonds |
1,932 |
3,564 |
- |
- |
1,932 |
3,564 |
- |
- |
10.58 |
6.01 |
6.31 |
6.19 |
|
Floating Rate Notes |
- |
56 |
- |
56 |
- |
- |
- |
- |
- |
- |
- |
- |
|
Preference shares |
1,736 |
2,992 |
- |
- |
1,736 |
2,992 |
- |
- |
7.45 |
7.08 |
1.93 |
2.94 |
|
Convertible Bond |
- |
60 |
- |
- |
- |
60 |
- |
- |
- |
107.14 |
- |
0.08 |
|
Unquoted |
3,250 |
2,649 |
- |
- |
- |
- |
3,250 |
2,649 |
- |
- |
- |
- |
|
Cash at bank - Sterling |
1,828 |
472 |
1,828 |
472 |
- |
- |
- |
- |
0.31 |
0.27 |
- |
- |
|
|
____ |
____ |
____ |
____ |
____ |
____ |
_____ |
____ |
____ |
____ |
____ |
____ |
|
|
54,639 |
58,438 |
1,828 |
528 |
3,668 |
6,616 |
49,143 |
51,294 |
n/a |
n/a |
n/a |
n/a |
|
|
____ |
____ |
____ |
____ |
____ |
____ |
_____ |
____ |
____ |
____ |
____ |
____ |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan - Sterling |
(7,000) |
(7,000) |
- |
- |
(7,000) |
(7,000) |
- |
- |
2.66 |
3.42 |
- |
- |
|
|
____ |
____ |
____ |
____ |
____ |
____ |
_____ |
____ |
____ |
____ |
____ |
____ |
|
Total |
47,639 |
51,438 |
1,828 |
528 |
(3,332) |
(384) |
49,143 |
51,294 |
n/a |
n/a |
n/a |
n/a |
|
|
____ |
____ |
____ |
____ |
____ |
____ |
_____ |
____ |
____ |
____ |
____ |
____ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A The 'weighted average interest rate' is based on the current yield of each asset, weighted by their market value. This excludes all equities and stocks where payments have
been suspended.
B The 'weighted average period for which rate is fixed' excludes stocks with no maturity date.
Maturity profile
The maturity profile of the Company's financial assets at 30 April 2012 and 30 April 2011 was as follows:
|
At 30 April 2012 |
Within |
Within |
More than |
Total |
|
Fixed rate |
|
|
|
|
|
Corporate Bonds |
- |
269 |
948 |
1,217 |
|
Preference shares |
- |
714 |
- |
714 |
|
Bank loan |
(7,000) |
- |
- |
(7,000) |
|
|
_______ |
_______ |
_______ |
_______ |
|
|
(7,000) |
983 |
948 |
(5,069) |
|
|
_______ |
_______ |
_______ |
_______ |
|
Floating rate |
|
|
|
|
|
Cash |
1,828 |
- |
- |
1,828 |
|
|
_______ |
_______ |
_______ |
_______ |
Details of the Company's loans are shown in note 11. All the other financial assets (including Corporate Bonds of £715,000 (2011 - £1,703,000) and Preference shares of £1,022,000 (2011 - £800,000)) and liabilities do not have a maturity date.
|
|
At 30 April 2011 |
Within |
Within |
More than |
Total |
||||
|
|
Fixed rate |
|
|
|
|
||||
|
|
Corporate Bonds |
- |
1,104 |
757 |
1,861 |
||||
|
|
Convertible Bond |
60 |
- |
- |
60 |
||||
|
|
Preference shares |
- |
- |
2,192 |
2,192 |
||||
|
|
|
_______ |
_______ |
_______ |
________ |
||||
|
|
Bank loan |
(7,000) |
- |
- |
(7,000) |
||||
|
|
|
_______ |
_______ |
_______ |
________ |
||||
|
|
|
(6,940) |
1,104 |
2,949 |
(2,887) |
||||
|
|
Floating rate |
_______ |
_______ |
_______ |
________ |
||||
|
|
Cash |
472 |
- |
- |
472 |
||||
|
|
|
_______ |
_______ |
_______ |
________ |
||||
|
|
|
||||||||
|
|
Interest rate sensitivity |
||||||||
|
|
The sensitivity analyses below have been determined based on the exposure to interest rates for floating and fixed interest investments and borrowings at the Balance Sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of investments that have floating rates. |
||||||||
|
|
|
||||||||
|
|
If interest rates had been 100 basis points higher or lower respectively and all other variables were held constant, the Company's: |
||||||||
|
|
- Profit before tax for the year ended 30 April 2012 would increase/ decrease by £52,000 (2011- £65,000). This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings and floating rate cash balances. These positions have been calculated based on cash balance and borrowing positions at each year end. |
||||||||
|
|
|
||||||||
|
|
- Profit before tax for the year ended 30 April 2012 would increase/ decrease by £554,000 (2011- £724,000). This is mainly attributable to the Company's exposure to interest rates on its directly held fixed interest securities and third party managed debt funds, which are both fixed and variable rate vehicles. This is based on modified duration calculations on directly held fixed interest holdings and assumptions of modified duration on third party funds held. |
||||||||
|
|
|
||||||||
|
|
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. The risk parameters used will fluctuate depending on the current market perception. |
||||||||
|
|
|
||||||||
|
|
Foreign currency risk |
||||||||
|
|
The income and capital value of the Company's investments are mainly denominated in Sterling; therefore, the Company is not subject to any material risk of currency movements. At the year end the Company held the following investments: |
||||||||
|
|
|
||||||||
|
|
|
2012 |
2011 |
||||||
|
|
|
|
Sterling equivalent |
|
Sterling equivalent |
||||
|
|
Euro |
3,880 |
3,162 |
2,812 |
2,501 |
||||
|
|
Japanese Yen |
- |
- |
113,153 |
836 |
||||
|
|
US Dollar |
3,216 |
1,980 |
2,070 |
1,241 |
||||
|
|
|
_______ |
_______ |
_______ |
________ |
||||
|
|
|
|
|
|
|
||||
|
|
At the year end the Company held foreign currency cash balances with the sterling equivalent of £nil (2011 - nil). |
||||||||
|
|
|
||||||||
|
|
Other price risk |
||||||||
|
|
Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments. |
||||||||
|
|
|
||||||||
|
|
It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide. |
||||||||
|
|
|
||||||||
|
|
Other price risk sensitivity |
||||||||
|
|
If market prices at the Balance Sheet date had been 10% higher or lower while all other variables remained constant, the return attributable to ordinary shareholders for the year ended 30 April 2012 would have increased/decreased by £4,853,000 (2011 : increase/decrease of £5,259,000) and equity reserves would have increased/decreased by the same amount. |
||||||||
|
|
|
||||||||
|
|
Credit risk |
||||||||
|
|
Credit risk represents the failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss. |
||||||||
|
|
|
||||||||
|
|
The risk is not considered significant, and is managed as follows: |
||||||||
|
|
- where the Investment Manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default; |
||||||||
|
|
- investments in quoted bonds are made across a variety of industry sectors and geographic markets so as to avoid concentrations of credit risk; |
||||||||
|
|
- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default; |
||||||||
|
|
- investment transactions are carried out with a large number of brokers, the credit rating of which is taken into account prior to undertaking the transaction so as to minimise the risk to the Company of default; |
||||||||
|
|
- investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the investment manager, and limits are set on the amount that may be due from any one broker; |
||||||||
|
|
- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports by the Administrator on a daily basis. In addition, the Administrator carries out a stock reconciliation to the Custodian's records on a weekly basis to ensure discrepancies are picked up on a timely basis. The Manager's Compliance department carries out periodic reviews of the Custodian's operations and reports its findings to the Manager's Risk Management Committee. |
||||||||
|
|
- cash is held only with reputable banks with high quality external credit enhancements. |
||||||||
|
|
|
||||||||
|
|
None of the Company's financial assets are secured by collateral or other credit enhancements. |
||||||||
|
|
|
||||||||
|
19 |
Capital management policies and procedures |
||||||||
|
|
The Company's capital management objectives are: |
||||||||
|
|
- to ensure that the Company will be able to continue as a going concern, and |
||||||||
|
|
- to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. |
||||||||
|
|
The Board normally seeks to limit gearing to 20% of net assets. |
||||||||
|
|
The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the Manager's views on the market and the extent to which revenue in excess of that which is required to be distributed should be retained. |
||||||||
|
|
Capital management policies and procedures |
2012 |
2011 |
||||||
|
|
Debt |
|
|
||||||
|
|
Bank loan |
7,000 |
7,000 |
||||||
|
|
|
_______ |
_______ |
||||||
|
|
Equity |
|
|
||||||
|
|
Equity share capital |
9,974 |
10,012 |
||||||
|
|
Retained earnings and other reserves |
37,915 |
41,295 |
||||||
|
|
|
_______ |
_______ |
||||||
|
|
|
47,889 |
51,307 |
||||||
|
|
|
_______ |
_______ |
||||||
|
|
Debt as a % of net assets |
14.62 |
13.64 |
||||||
|
|
|
_______ |
_______ |
||||||
|
20 |
Fair value hierarchy |
|||||
|
|
The Company adopted the amendments to FRS 29 'Financial Instruments: Disclosures' which requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: |
|||||
|
|
- 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 assets or liabilities, either directly (ie as prices) or indirectly (ie derived from prices); and |
|||||
|
|
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). |
|||||
|
|
|
|||||
|
|
The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 30 April 2012 as follows: |
|||||
|
|
|
Note |
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
|
|
Quoted Equities |
a) |
30,283 |
- |
- |
30,283 |
|
|
OEICs |
a) |
12,764 |
3,561 |
- |
16,325 |
|
|
Corporate Bond |
a) |
1,217 |
- |
- |
1,217 |
|
|
Preference shares |
a) |
1,736 |
- |
- |
1,736 |
|
|
Unquoted Equities |
b) |
- |
- |
3,250 |
3,250 |
|
|
|
|
_______ |
_______ |
_______ |
________ |
|
|
Net fair value |
|
46,000 |
3,561 |
3,250 |
52,811 |
|
|
|
|
_______ |
_______ |
_______ |
________ |
|
|
|
|
|
|
|
|
|
|
a) Quoted Equities |
|||||
|
|
The fair value of the Company's investments in quoted equities have been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges. |
|||||
|
|
|
|||||
|
|
b) Unquoted Equities |
|||||
|
|
The fair value of the Company's investments in unquoted stocks have been determined by reference to primary valuation techniques described in note 1 (b). |
|||||
|
|
A reconciliation of fair value measurements in Level 3 is set out in the following table: |
|||||
|
|
|
Equity investments |
Total |
|
|
Opening Balance |
2,649 |
2,649 |
|
|
Purchases |
914 |
914 |
|
|
Sales |
- |
- |
|
|
Total gains or losses included in gains on investments in the income statement: |
|
|
|
|
- on assets sold |
- |
- |
|
|
- on assets held at the end of the year |
(313) |
(313) |
|
|
|
_______ |
_______ |
|
|
Closing Balance |
3,250 |
3,250 |
|
|
|
_______ |
_______ |
21 Related parties
With effect from 1 January 2012 the investment management arrangements between the Company and Midas Capital Partners Limited ("MCP") were amended by reducing the annual management fee payable to MCP to 0.9% which is calculated on market capitalisation rather than net assets and the performance fee was terminated. These changes amounted to a related party transaction between the Company and MCP (the "Related Party Transaction").
In accordance with the UK Listing Authority's Listing Rules, for the purpose of classifying the Related Party Transaction, the gross assets and profits tests under Listing Rule 11 were not applicable as no assets were the subject of the Related Party Transaction and the gross capital test was not applicable as no company or business was being acquired. As the rate at which the new management fee would be payable was fixed at 0.9% per annum of the Company's market capitalisation, the percentage ratio for the consideration test was 0.9% (as required by the UK Listing Authority, this ratio has been calculated on the basis of the new fee arrangement on a stand-alone basis and without regard to the amounts payable under the existing fee arrangements). Based on this analysis the Related Party Transaction was classified as a Class 3 transaction to which LR 11.1.10 also applies. At the time of the amendment to the annual management fee Canaccord Genuity Limited confirmed in writing that the terms of the Related Party Transaction were fair and reasonable so far as the shareholders of the Company are concerned and the Company undertook to include details of the Related Party Transactions in this Annual Report and Accounts.
For illustrative purposes the total fees payable to the Manager for the period from 1 January 2012 to 30 April 2012 under the new basis were £124,000 and the fees due to the Manager if calculated under the old basis for this period would have been £160,000.
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.
The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 April 2012 have been agreed with the auditors and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2011 and 2012 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498(2) or 498(3) of the Companies Act 2006. The financial information for 2011 is derived from the statutory accounts for 2010 which have been delivered to the Registrar of Companies. The 2011 accounts will be filed with the Registrar of Companies in due course.
The Annual General Meeting of the Company will be held on 4 September 2012 at 12.30 p.m. The Racquet Club, 5 Chapel Street, Liverpool L3 9AG.
The audited Annual Report and financial statements will be posted to shareholders in early July. Copies may be obtained during normal business hours from the Company's Registered Office, R&H Fund Services Limited, Eighth Floor, 6 New Street Square, New Fetter Lane, London EC4A 3AQ or from the Manager's website, www.mamfundsplc.com/migt/index.asp
Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
By order of the Board
Aberdeen Asset Management PLC - Secretary
21 June 2012
10.INVESTMENT PORTFOLIO
As at 30 April 2012
|
Company |
Sector |
Asset Class |
Valuation |
Total |
|
Bell AJ B |
Special & Other Finance |
Alternative Assets |
3,250 |
5.92 |
|
Partners Group Global Opportunites C |
Unit Trusts & OEICS |
Alternative Assets |
2,364 |
4.31 |
|
Royal London Sterling Extra Yld Bond A Acc C |
Unit Trusts & OEICS |
Fixed Interest |
1,476 |
2.69 |
|
Somerset Cap Emerging Markets Dividend Growth C |
Unit Trusts & OEICS |
Overseas Equities |
1,339 |
2.44 |
|
GlaxoSmithKline |
Pharmaceuticals & Biotechnology |
UK Equities |
1,283 |
2.34 |
|
Unilever |
Food Producers |
UK Equities |
1,262 |
2.30 |
|
Celsius Fund Asian Real Estate Income C |
Unit Trusts & OEICS |
Property |
1,249 |
2.28 |
|
BNY Mellon Fund Manager Newton Asian Income Institutional C |
Unit Trusts & OEICS |
Overseas Equities |
1,243 |
2.26 |
|
Acencia Debt Strategies 'C' |
Special & Other Finance |
Alternative Assets |
1,238 |
2.26 |
|
Lindsell Train Japanese Eqty 'B' C |
Unit Trusts & OEICS |
Overseas Equities |
1,194 |
2.18 |
|
Top ten investments |
|
|
15,898 |
28.98 |
|
Reckitt Benckiser Group |
Household Goods & Home Construction |
UK Equities |
1,166 |
2.12 |
|
Vodafone Group |
Mobile Telecommunications |
UK Equities |
1,151 |
2.10 |
|
Royal Dutch Shell EUR0.07 'B' |
Oil & Gas Producers |
UK Equities |
1,123 |
2.05 |
|
AstraZeneca |
Pharmaceuticals & Biotechnology |
UK Equities |
1,080 |
1.97 |
|
Prusik Investment Asian Equity Income C |
Unit Trusts & OEICS |
Overseas Equities |
1,048 |
1.91 |
|
Legal & General Group |
Life Insurance |
UK Equities |
1,035 |
1.89 |
|
Ashmore Group |
Financial Services |
UK Equities |
1,033 |
1.88 |
|
Ecclesiastical Insurance Office 8 5/8% Net Cum Irred Pref |
Fixed Interest |
Preference Shares |
1,022 |
1.86 |
|
Cullen North American High Dividend Value Equity Fund C |
Unit Trusts & OEICS |
Overseas Equities |
1,014 |
1.85 |
|
HSBC Holdings |
Banks |
UK Equities |
971 |
1.77 |
|
Top twenty investments |
|
|
26,541 |
48.38 |
|
LBG Capital No.1 7.975% 15/09/24 |
Fixed Interest |
UK Preference Share |
948 |
1.73 |
|
Duet Real Estate Finance |
Investment Companies |
Property |
947 |
1.72 |
|
Schroder Unit Trusts Asian Inc Maximiser C |
Unit Trusts & OEICS |
Overseas Equities |
932 |
1.70 |
|
Hill (William) |
Travel & Leisure |
UK Equities |
921 |
1.68 |
|
Centrica |
Gas Water & Multiutilities |
UK Equities |
921 |
1.68 |
|
Atkins WS |
Support Services |
UK Equities |
909 |
1.65 |
|
Smith DS |
General Industrials |
UK Equities |
906 |
1.65 |
|
BHP Billiton |
Mining |
UK Equities |
889 |
1.62 |
|
Ignis AM Argonaut European Income Fund C |
Unit Trusts & OEICS |
Overseas Equities |
887 |
1.62 |
|
Scottish & Southern Energy |
Electricity |
UK Equities |
859 |
1.56 |
|
Top thirty investments |
|
|
35,660 |
64.99 |
|
Macau Property Opportunities |
Investment Companies |
Property |
821 |
1.49 |
|
Harbourvest Senior Loans Europe |
Special & Other Finance |
Fixed Interest |
799 |
1.45 |
|
Tesco |
Food & Drug Retailer |
UK Equities |
793 |
1.44 |
|
Schroder Oriental Income |
Investment Companies |
Overseas Equities |
772 |
1.41 |
|
Intermediate Capital |
Financial Services |
UK Equities |
770 |
1.40 |
|
Princess Private Equity Holding |
Investment Companies |
Alternative Assets |
752 |
1.37 |
|
Ignis Enhanced Argonaut European Income C |
Unit Trusts & OEICS |
Overseas Equities |
746 |
1.36 |
|
Thames River Traditional High Income Fund C |
Unit Trusts & OEICS |
Fixed Interest |
719 |
1.31 |
|
Invesco Leveraged High Yield Fund |
Investment Companies |
Fixed Interest |
715 |
1.30 |
|
Royal & Sun Alliance Insurance Group 7.375% Cum Pref |
Fixed Interest |
Preference Shares |
714 |
1.30 |
|
Harewood Structured Inv US Enhanced Hedge Pref Cls 'A' |
Investment Companies |
Overseas Equities |
706 |
1.29 |
|
AXA Investment Managers US Short Duration High Yield C |
Unit Trusts & OEICS |
Fixed Interest |
671 |
1.22 |
|
Doric Nimrod Air Two 'C' |
Investment Companies |
UK Equities |
663 |
1.21 |
|
Phaunos Timber Fund |
Investment Companies |
Alternative Assets |
647 |
1.18 |
|
Policy Selection Assured GBP C |
Unit Trusts & OEICS |
Alternative Assets |
642 |
1.17 |
|
Blackrock Commodities |
Investment Companies |
Overseas Equities |
623 |
1.13 |
|
Diageo |
Beverages |
UK Equities |
620 |
1.13 |
|
Aberdeen Latin American Income Fund |
Investment Companies |
Overseas Equities |
614 |
1.12 |
|
GCP Infrastructure Investments |
Investment Companies |
Alternative Assets |
610 |
1.11 |
|
Ecofin Water & Power Opportunities |
Investment Companies |
Overseas Equities |
591 |
1.08 |
|
M&G European Loan 'C' C |
Unit Trusts & OEICS |
Fixed Interest |
555 |
1.01 |
|
Henderson European Focus Trust |
Investment Companies |
Overseas Equities |
544 |
0.99 |
|
Man Group |
Financial Services |
UK Equities |
466 |
0.85 |
|
Signet Global Hedge Fund Bond |
Fixed Interest |
Alternative Assets |
353 |
0.64 |
|
Other investments |
|
|
1,245 |
2.26 |
|
Total investments |
|
|
52,811 |
96.21 |
|
Net current assets A |
|
|
2,078 |
3.79 |
|
Total assets A |
|
|
54,889 |
100.00 |
With the exception of those companies' shares marked with a specific share class above, all investments are in the ordinary shares of the investee company.
A Excluding bank loan of £7,000,000.
B Unquoted.
C Open-ended.
This information is provided by RNS
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