Blue Planet Investment Trust plc

Half Yearly Report and Accounts
For the six months ended 31 October 2015

Officers and Advisors
Directors Investment Manager, Administrator and Secretary
John Tyce (Non-Executive Chairman) Blue Planet Investment Management Ltd
Victoria Killay (Non-Executive) 18a Locker Street
Kenneth Murray (Non-Executive) Sliema
SLM 3124, Malta
Telephone No: +356 2131 4309
Facsimile No: +356 2131 5219
Local call rate from UK 0845 527 7588, plus a Service Charge of 5p per call
E-mail: info@blueplanet.eu
www.blueplanet.eu
Registered Office Registrars
Greenside House Capita Asset Services Ltd
25 Greenside Place The Registry
Edinburgh EH1 3AA 34 Beckenham Road
Telephone No: +44 131 466 6666 Beckenham
Facsimile No: +44 131 466 6677 Kent BR3 4TU
E-mail: info@blueplanet.eu Shareholder Helpline No: 0871 664 0300 (calls cost 10p
www.blueplanet.eu per minute plus network extras, lines are open 8.30am-5.30pm (Mon-Fri))
Overseas: +44 208 639 3399
E-mail: ssd@capitaregistrars.com
www.capitaassetservices.com
Chartered Accountants & Statutory Auditors Bankers
Deloitte LLP Lloyds Banking Group
Saltire Court 1st Floor
20 Castle Terrace 48 Chiswell Street
Edinburgh EH1 2DB London EC1Y 4XX
Custodians Custodians
KAS Bank N.V. Interactive Brokers Group Incorporated
Westferry House, 11 Westferry Circus 5th Floor, One Carey Lane
London E14 4HD London EC2V 8AE
Registered Number
SC192153

Blue Planet Investment Trust plc is a member of the Association of Investment Companies.

Investment Policy and Objectives

The Company’s objective is to provide investors with a combination of capital growth and income.  In order to achieve this it invests in securities (including equities, exchange traded funds, equity-related securities, bonds and derivatives) issued by companies, Governments and other types of issuers located throughout the world.

The Company has not set maximum exposures for any type of issuer, geographical regions or sectors.  How the Company’s investments are allocated will depend on market conditions and the judgement of the Board as to what is in the best interests of Shareholders.  This is to provide it with the flexibility that is necessary to deal with an ever changing economic environment.  It would, however, normally be expected that most of the Company’s investments will be in equities, exchange traded funds, equity-related securities, preference shares, bonds and derivatives.  However, the Company is not prohibited from investing in other types of securities.  No more than 15 per cent of the Company’s portfolio may be invested in any one investment at the time the investment is made. There is no restriction on the amount that may be invested in any one country.

The Company may use derivatives (including, but not limited to, contracts for differences, futures and options), principally, but not exclusively, for efficient portfolio management, that is to reduce, transfer or eliminate investment risk in its investments, including protection against currency risks.

The Company’s Articles permit borrowing up to an amount not exceeding 75% of Shareholders’ funds.  The Board may utilise borrowing up to this limit from time to time to enhance income and capital returns over the long term and may borrow in Sterling and other currencies.


 

Financial Record Six months ended 31
October 2015
(unaudited)
Six months ended 31
October 2014
(unaudited)
Year
ended 30
April 2015
(audited)
Shareholders’ funds (£’000) 23,640 24,860 28,436
Net asset value per share (p) 47.78 50.25 57.47
Share price (p) (Bid) 34.00 34.00 39.75
Discount (%) 28.84 32.34 30.84
Gearing (%)* 50.54 46.59 42.95
Return available for shareholders (£’000) 961 529 1,469
Capital return in the period (£’000) (4,361) (1,899) 737
Revenue return per share (p) 1.94 1.07 2.97
Total return per share (p)    (6.87)    (2.77) 4.46
Dividend per share (p) - - 2.82
Dividend yield on our shares (%) N/A N/A 7.09
Ongoing Charges (%) ** 3.72 3.81 3.77

* Net debt as a percentage of shareholders’ funds

** Ongoing charges figure has been prepared in accordance with the AIC’s recommended methodology.

The Investment Manager

Under the recently introduced Alternative Investment Fund Management Directive legislation the Trust has elected to be its own AIF manager but has delegated the day to day management of the investment portfolio and administration to Blue Planet Investment Management Ltd which is a Malta based investment management company.  It is an independent firm that specialises in advising and managing investment and family trusts.  It has a great deal of expertise in managing investments on a worldwide basis.  It is regulated by the Malta Financial Services Authority.

Blue Planet Investment Management Ltd is the investment manager of the Company and receives an annual fee of 1.50% per annum of the total assets of the company which is paid monthly. Blue Planet Investment Management Ltd also receives £196,000 per annum in respect of administration and secretarial services.  The investment management, administration and secretarial services agreements may only be terminated on receipt of two years notice.

Website Information

Please take the time to visit our website:

www.blueplanet.eu

Subscribe to our monthly fact sheet service:
http://www.blueplanet.eu/blueplanet_downloads.136.html

To download historical Annual and Interim reports and past monthly fund fact sheets:
http://www.blueplanet.eu/blueplanet_downloads.124.html

To view stock market RNS announcements:
http://www.blueplanet.eu/blueplanet_news.8.html

Retail Distribution of Investment Company Shares

Blue Planet Investment Trust plc currently conducts its affairs so that the shares issued by the Company can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future.

The shares are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

Interim Management Report – Portfolio Information

As at 31 October 2015
Country Valuation (£) % of Portfolio
Ordinary Shares
Arista Networks Incorporated United States  1,538,999  4.5
General Motors Co United States  1,515,844  4.5
Melrose Industries plc United Kingdom  1,317,195  3.9
Infinera Corp. United States  1,280,057  3.8
Beazley plc United Kingdom  1,090,800  3.2
ETRACS 2x Leveraged Long Wells Fargo Business Development Company Index ETN United States  1,084,068  3.2
Mobileye NV United States  1,001,335  2.9
Synchronoss Technologies Inc. United States  957,379  2.8
American Airlines Inc. United States  947,920  2.8
Lancashire Holdings Limited United Kingdom  947,344  2.8
Aegean Airlines SA Greece  934,207  2.7
Engie SA France  848,186  2.5
Barclays plc United Kingdom  840,420  2.5
Och-Ziff Capital Management Group LLC United States  799,462  2.3
Bank of America Corporation United States  728,667  2.1
Allianz SE Germany  679,221  2.0
SSE plc United Kingdom  666,160  1.9
Baidu Inc. China  643,976  1.9
National Grid plc United Kingdom  619,616  1.8
Enagas SA Spain  609,209  1.8
Rio Tinto plc United Kingdom  601,418  1.8
Delta Lloyd NV Netherlands  599,230  1.8
Direct Line Insurance Group United Kingdom  532,170  1.6
AXA SA France  520,116  1.5
Bank Of Ireland Eire  479,349  1.4
KCAP Financial Incorporated United States  285,847  0.8
Ausdrill Limited Australia  172,628  0.5
Gfinity plc United Kingdom  60,000  0.2
22,300,823 65.5
Preference Shares                                     
Lloyds Banking Group 9.25% United Kingdom  1,086,410  3.2
NatWest Bank 9% United Kingdom  667,500  2.0
Santander UK plc 10.375% United Kingdom  416,770  1.2
Standard Chartered 8.25% United Kingdom  360,000  1.1
Santander UK plc 8.625% United Kingdom  246,000  0.7
RSA Insurance 7.375% Cumulative Preference Share United Kingdom  58,000  0.2
2,834,680 8.4
Debt Securities
Federal Republic of Brazil 10% 01/01/2025 Brazil  2,371,342  7.0
Lloyds Bank plc 7.625% 22/04/25 United Kingdom  777,759  2.3
Aviva plc 6.875% 20/05/58 United Kingdom  768,712  2.3
Gulf Keystone Petroleum Ltd 13% 18/04/17 Bermuda  700,214  2.1
Bank of Ireland 13.375% Perpetual Eire  678,680  2.0
Baggot Securities 10.24% Perpetual Eire  677,760  2.0
BNP Paribas 4.875% 29/10/49 France  599,860  1.8
Phoenix Group 6.625% 18/12/25 United Kingdom  576,880  1.7
Santander UK 10.0625% 29/10/49 United Kingdom  490,088  1.4
Petrobras 6.85% 05/06/2115 Brazil  346,296  1.0
Friends Life Group 12% 21/05/21 United Kingdom  319,504  0.9
Petrobras 6.25% 14/12/26 Brazil  318,313  0.9
Sea Trucks Group 9% 26/03/18 Nigeria  210,642  0.6
8,836,050                             26.0
Listed Investments 33,971,553 99.9
Cash 17,623 0.1
Total 33,989,176 100.0

Interim Management Report (continued)

Performance

In the six months to 31st October 2015 we generated a NAV total return of -12.0%, this is after account has been taken of the dividend of 2.82p per share that was paid to shareholders on the 28th August 2015. Over the same period the FTSE 100 generated a total return of -6.9%. Our share price total return over the period was -7.4%.

The period under review was marred by persistent uncertainties that led to near continuous market weakness. First there were the UK elections with the inherent threat of a Labour Government and a return to catastrophic economic mismanagement. Thankfully that risk was averted when a Conservative Government was elected. Its commitment to sound economic management, albeit with much smaller cuts to public spending than we believe are necessary to ensure a really successful, dynamic and vibrant economy, was a relief and markets responded positively to it.

However, this was soon overshadowed by fears about Syriza in Greece, another incompetent, left wing party, and its threats to default on the Greek Government’s debt. Fears that were in our view absurd given the tiny size and inconsequential nature of the Greek economy. Nevertheless, this led to months of uncertainty until finally the beleaguered Greek Government reached agreement with its creditors on the terms of a third bailout, this time for EUR 86 billion.  Had this not happened the Greek economy would have certainly collapsed and its access to finance would have been cut off with devastating consequences for the Greek people. They, like so many others, are paying a very high price for allowing economies to be run by politicians who are grossly incompetent and who have little or no understanding of economics. If MP’s were appointed on merit rather than on the back of false promises and misrepresentations, these problems could be avoided and we would all be better off.

Good second quarter earnings ought to have boosted the market but they were not enough to overcome the bearish mood that had set in and the sell-off accelerated in August with European indices suffering their worst monthly decline in 4 years. The US fared even worse with the Dow Jones Index posting its worst August performance in 17 years.

Keen to find reasons to justify this sell-off, the media cited concerns about emerging markets, slowing economic growth in China, falling commodity prices and the prospect of a rise in US interest rates. Emerging Markets, such as Brazil and Russia, which have large US dollar borrowings and whose export earnings have declined as a result of falling commodity prices, were particularly hard hit.


While investors are right to be concerned about these factors, we feel that the sell-off was overdone and indiscriminate. US monetary policy will only be tightened in the event that the US economy is fundamentally strong and getting stronger. That would be bullish, not bearish; so it is as absurd to worry about that as it was to worry about Greece. In addition, while falling commodity prices and rising US interest rates will harm some economies, it will also benefit others, notably those that are net consumers of raw materials such as the UK, Europe, US, Japan, China and creditor nations. That being the case, rational investors should have been disinvesting in those economies/companies that stand to suffer from these changes and buying into those that will benefit from them, but instead everything was sold. That suggests to us that the sell-off was primarily driven by sentiment rather than any rational consideration of the facts. In other words, it was a typical late, bull market bout of nerves. The facts, however, suggest that this bull run has further to go. Critically, corporate earnings are growing and are likely to continue to do so even after US rates are tightened. The US economy, which is the largest in the World, is doing very well with Q2 GDP growth being revised up from 2.3% to 3.7% and jobless claims dropping to the lowest levels seen in many years. The European economy is also strengthening, with Euro area unemployment recently marking a four year low of 10.8% whilst the manufacturing and services sectors continue to improve and are consistent with GDP growth of nearly 2%.

Income and Dividends

Although stock markets have been weak over the past six months, our income from investments has continued to grow strongly. In the six months to 31st October 2015 income rose by 40.5% to £1,389,304 (October 2014 - £988,978). Your Board is committed to paying as high a dividend as is prudent and, subject to no unforeseen eventualities, we expect the dividend for the year to 30th April 2016 to match or improve on the 2.82p per share we paid last year. It must, however, be stressed that these are projections made in good faith with the purpose of informing shareholders and they should not be relied upon. The actual outcomes may be worse or better than this.

Outlook

We expect markets to settle down and push higher as the year advances, and we look forward to an improved NAV performance in the second half of our financial year. We expect US interest rates to rise either later this year or early next year, and have been re-allocating our capital and amending our currency hedging policy to take advantage of this. In particular, we have been investing in bank shares. This is because increasing interest rates will boost their profitability, and with their capital ratios now at very high levels, they will be able to substantially increase their dividend payments in the coming years.  We have also reduced our USD hedges in anticipation of a stronger dollar. We have also been allocating capital to undervalued assets such as Brazilian Government Debt.  In terms of nominal GDP, Brazil is the 9th largest economy in the world, similar to Italy. On 13th October of this year we commenced investing in Federal Republic of Brazil 10% 01/01/2025 bonds.  At the time the exchange rate was 6.06 BRL to 1 GBP and the yield to maturity on the bond was 15.82%.  We did so because we believed that the Brazilian Real was oversold against the GBP and that the yields to maturity on Brazilian Government debt were excessive given the credit risk and were therefore likely to fall.  Since then the Brazilian Real has strengthened to 5.63 BRL to 1 GBP and the yield to maturity has fallen to 15.20%, giving rise to an 8.5% capital gain for us in a little over a month. We expect much more from this investment in the future. To fund these investments we have been taking profits on some of our technology investments.  


We also continue to monitor and analyse the Oil and Mining sectors so that when those markets do bottom we are in a position to allocate capital to those investments we judge to be the best for us in the sector. We are also looking at Government debt in countries that have been badly managed but where, as a result of political change, there is the prospect of improved economic management and a re-rating of the country's debt. In addition, we continue to look for good investments in the technology and biotechnology sectors. We are excited by what we see and look forward to the future with confidence.

Gearing and Capital Allocation

At the end of the six month period to 31st October 2015 the Trust had gearing, net of cash, equal to 50.5% of NAV and its portfolio was allocated as follows:  65.5% was invested in ordinary shares; 26.0% in bonds; 8.4% preference shares and 0.1% in cash.  Figure 1 shows the movement in the allocation of our capital across those four different asset classes, ordinary shares, bonds, preference shares and cash, since our year end 30th April 2015.

Figure 1:                Portfolio movements – by asset class


Security Type
Oct-15 Apr-15
Ordinary Shares 65.5% 75.9%
Bonds 26.0% 16.4%
Preference Shares 8.4%                    7.7%
Cash 0.1%                       0.0%

Total
100.0% 100.0%

Figure 2:                Portfolio movements – by geography

Country Name Oct-15 Apr-15
United Kingdom 36.6% 36.0%
United States 29.9% 29.0%
Brazil 8.9% 0.0%
France 5.8% 13.5%
Eire 5.4% 6.6%
Greece 2.7% 1.6%
Bermuda 2.1% 2.2%
Germany 2.0% 1.7%
China 1.9% 4.6%
Spain 1.8% 0.0%
Netherlands 1.8% 2.5%
Nigeria 0.6% 0.6%
Australia 0.5% 0.6%
Argentina 0.0% 1.1%
100.0% 100.0%

Dividend

In accordance with established policy no interim dividend has been declared for the first half of the year.

Risk

Your Company is, and will continue to be, exposed to a number of risks which are detailed in full in the Strategic Report on page 6 of the Annual Report and have not changed up to the date of this report. The key market risk arises from the uncertainty regarding the future price performance of the securities held by your Company. If gearing is employed this risk is magnified.

The prices of the individual securities in the portfolio are monitored on a daily basis and the Board, which meets quarterly, imposes borrowing limits to ensure gearing levels are appropriate to market conditions. When gearing is employed the potential impact of changes in interest rates is taken into consideration. The securities dealt in are all listed on recognised exchanges and are readily realisable.

The Fund is exposed to currency risk, due to the range of currencies in which investments are held. A substantial proportion of the Company’s assets are held in assets denominated in foreign currencies and movements in these currencies can significantly affect the Sterling value of the Company’s foreign denominated income and assets. The fund manager tracks currency movements on a regular basis and hedging is considered on a case-by-case basis.

Where investments are made in emerging markets there is a risk of higher volatility in the price performance of these equities and their associated currencies. Political risk and adverse economic circumstances are more likely to arise, putting the value of the investment at a higher risk. The registration and settlement arrangements in emerging markets may be less developed than in more mature markets so operational risks of investing are higher.

Going Concern

The Company’s business activities, together with the risk factors likely to affect its future position are set out in this report. The Directors consider that the Company has adequate financial resources in the form of readily realizable listed securities, including cash and credit facilities to continue in operational existence for the foreseeable future.  For this reason, they continue to use the going concern basis in preparing the accounts

Borrowings, Gearing and Liquidity

The Fund ended the period with gearing net of cash of 50.5%. The Company financed its gearing by means of credit facilities with KAS Bank N.V. and Interactive Brokers Group.

Generally, gearing beneficially affects the Company’s NAV when the value of its investments is rising, but adversely affects it when the value of investments is falling.

Blue Planet Services and Price Information Sources

Shareholders can view the Company’s share price and additional information about the Fund on the website of Blue Planet Investment Management Ltd (www.blueplanet.eu) and the London Stock Exchange (www.londonstockexchange.com). To find the Company’s share price on the London Stock Exchange website go to the Home page and type “BLP” in the “Price Search” field.

I would like to thank all shareholders for your continuing support.

John Tyce
Chairman
25 November 2015


Balance Sheet

At 31 October
2015
£
(unaudited)
At 31 October
2014
£
(unaudited)
At 30 April
2015
£
(audited)

Fixed assets
Listed equity investments 25,135,503 32,816,023 33,678,872
Listed non - equity investments 8,836,050 4,552,066 6,630,707
33,971,553 37,368,089 40,309,579

Current assets
Debtors 1,714,265 182,672 634,686
Cash at bank and in hand 17,623 294,911 2,018

Creditors: amounts falling due within one year (note 7)
(12,063,235) (12,985,341) (12,510,887)

Net current liabilities
(10,331,347) (12,507,758) (11,874,183)

Net assets
23,640,206 24,860,331 28,435,396

Capital and reserves

Called-up share capital
497,820 497,820 497,820

Share premium account
18,426,406 18,426,406 18,426,406
Other reserves

Capital reserve – realised
(2,681,701) (6,075,676) (4,526,388)

Capital reserve – investment holding gains
(1,896,522) 3,223,225 4,309,452

Capital redemption reserve
8,167,389 8,167,389 8,167,389

Revenue reserve
1,126,814 621,167 1,560,717

Shareholders’ funds
23,640,206 24,860,331 28,435,396

Net asset value per ordinary share (note 4)
47.78p 50.25p 57.47p


Statement of Directors’ responsibilities

The Directors confirm that this set of condensed financial statements has been prepared in accordance with FRS 104 “Interim Financial Reporting” and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

On behalf of the Board

John Tyce
Chairman
25 November 2015


Income Statement
 

For the six months ended 31 October 2015
(unaudited)
For the six months ended 31 October 2014
(unaudited)
For the year ended 30 April 2015
(audited)
Revenue
                   £
Capital
                £
Total
              
£
Revenue
 
£
Capital
                £
Total
               £
Revenue
                £
Capital
                   £
Total
            
£
Capital (losses) / gains on investment
Net realised gains - 2,387,759 2,387,759 - 1,093,414 1,093,414 - 2,304,360 2,304,360
Unrealised losses - (6,534,638)  (6,534,638) - (3,190,247) (3,190,247) - (1,916,065) (1,916,065)
Exchange (losses) / gains - (44,308) (44,308) - 391,711 391,711 - 728,558 728,558
Net capital (losses) / gains on investment - (4,191,187) (4,191,187) - (1,705,122) (1,705,122) - 1,116,853 1,116,853
Income from investments 1,389,304 - 1,389,304 988,978 - 988,978 2,252,202 - 2,257,202
Bank interest receivable 111 - 111 14,588 - 14,588 16,139 - 16,139
Gross revenue and capital (losses) / gains 1,389,415 (4,191,187) (2,801,772) 1,003,566 (1,705,122) (701,566) 2,273,341 1,116,853 3,390,194
Administrative expenses (338,591) (141,145) (479,736) (370,332) (152,192) (522,524) (712,715) (303,445) (1,016,160)

Net return before interest payable and taxation
1,050,824 (4,332,332) (3,281,508) 633,234 (1,857,314) (1,224,080) 1,560,626 813,408 2,374,034
Interest payable (28,955) (28,955) (57,910) (41,537) (41,537) (83,074) (76,744) (76,744) (153,488)

Return on ordinary activities before taxation
1,021,869 (4,361,287) (3,339,418) 591,697 (1,898,851) (1,307,154) 1,483,882 736,664 2,220,546
Taxation on ordinary activities (note 3) (60,581) - (60,581) (62,209) - (62,209) (14,844) - (14,844)
Return on ordinary activities after taxation 961,288 (4,361,287) (3,399,999) 529,488 (1,898,851) (1,369,363) 1,469,038 736,664 2,205,702
Return per ordinary share (note 4) 1.94p (8.82)p (6.87)p 1.07p (3.84)p (2.77)p 2.97p 1.49p 4.46p

The Total column of the income statement represents the profit & loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations.

There were no recognised gains and losses other than those disclosed above. Accordingly a statement of total recognised gains and losses is not required.


Cash Flow Statement
 

For the six
months
ended 31
October 2015
£
(unaudited)
For the six
months
ended 31
October 2014
£
(unaudited)
For the year
ended
30 April
2015
£
(audited)
Operating activities
Investment income received 1,267,945 1,072,113 2,167,568
Interest received 111 14,588 16,139
Investment management and administration fees paid (386,844) (405,365) (801,995)
Cash paid to and on behalf of directors (21,967) (21,500) (43,000)
Other cash payments      (97,849)      (118,469) (179,961)
Exchange differences on foreign currency cash balances (44,308) 391,711 728,558
Net cash inflow from operating activities (note 6) 717,088 933,078 1,887,309

Servicing of finance
Interest paid (60,672) (83,437) (154,355)
Taxation
Taxation recovered - 39,101 126,034
Capital expenditure and financial investment
Purchase of investments       (24,043,540)       (9,401,860) (33,352,758)
Sale of investments          25,047,113            9,928,919 32,280.340

Cash inflow before financing
1,659,989 1,415,801 786,570
Equity dividend paid (note 5) (1,395,191) (1,137,922) (1,137,922)
Financing
Loan (repaid) / drawn down (249,192) 1,294 337,632

Increase / (decrease) in cash
15,606 279,173 (13,720)



Statement of Changes in Equity

For the six months ended 31 October 2015 (unaudited)


Called-up Share capital
(£)



Share premium
(£)


Capital reserve-realised
(£)
Capital reserve- investment holding losses
(£)


Capital Redemption reserve
(£)



Revenue reserve
(£)
 

Total    shareholders’   funds
(£)
Shareholders’ funds at 1 May 2015 497,820 18,426,406 (4,526,388) 4,309,452 8,167,389 1,560,717      28,435,396
Return on ordinary activities after taxation    -      - 1,844,687 (6,205,974)      - 961,288 (3,399,999)
Dividend paid during the period - - - - - (1,395,191) (1,395,191)
Shareholders’ funds at 31 October 2015 497,820 18,426,406 (2,681,701)   (1,896,522)    8,167,389 1,126,814 23,640,206

   

For the six months ended 31 October 2014 (unaudited)


Called-up Share capital
(£)



Share premium
(£)


Capital reserve-realised
(£)
Capital reserve- investment holding losses
(£)


Capital Redemption reserve
(£)



Revenue reserve
(£)


Total  shareholders’ funds
(£)
Shareholders’ funds at 1 May 2014 497,820 18,426,406 (7,384,125) 6,430,525 8,167,389 1,229,601    27,367,616
Return on ordinary activities after taxation    -      - 1,308,449 (3,207,300)      - 529,488 (1,369,363)

Dividend paid during the period
- - - - - (1,137,922) (1,137,922)
Shareholders’ funds at 31 October 2014 497,820  18,426,406 (6,075,676) 3,223,225    8,167,389 621,167 24,860,331

   

For the year ended 30 April 2015 (audited)


Called-up Share capital
(£)



Share premium
(£)


Capital reserve-realised
(£)
Capital reserve- investment holding losses
(£)


Capital Redemption reserve
(£)



Revenue reserve
(£)


Total  shareholders’ funds
(£)
Shareholders’ funds at 1 May 2014 497,820 18,426,406 (7,384,125) 6,430,525 8,167,389 1,229,601 27,367,616
Return on ordinary activities after taxation -      - 2,857,737 (2,121,073)      -   1,469,038 2,205,702

Dividend paid during the period
- - - - - (1,137,922) (1,137,922)

Shareholders’ funds at 30 April 2015

497,820

18,426,406

(4,526,388)

4,309,452

8,167,389

1,560,717

28,435,396

Notes

1. The financial statements for the six months to 31st October 2015 have been prepared on the basis of the accounting policies set out in the Company’s Annual Report and Accounts as at 30th April 2015 in accordance with FRS 104 “Interim Financial Reporting” and applicable to UK law and accounting standards.

2. All expenses are charged to the revenue account with the exception of management fees and interest charges on borrowings, one half of which less the appropriate tax relief is charged to capital.  Investment Management and Administrators fees totalled £380,290 in the period (2014 Full year - £802,890) 

3. The taxation charge arises wholly from overseas withholding tax on investment income and in the year to 30th April 2015 includes a refund of Polish and French withholding tax.

4. The return per ordinary share is based upon the following figures:

31 October 2015
(unaudited)
31 October 2014
(unaudited)

30 April 2015
(audited)
Revenue return £961,288 £529,488 £1,469,038
Capital return £(4,361,287) £(1,898,851) £736,664
Weighted average number of ordinary shares in issue during the period 49,474,863 49,474,863 49,474,863

 The net asset value per ordinary share is calculated on 49,474,863 ordinary shares in issue at the end of the period after deducting treasury shares.

5.  No interim dividend is proposed.

6.  Cash Flow Statement

Reconciliation of net revenue return to net cash inflow from operating activities 31 October 2015
£
(unaudited)
31 October 2014
£
(unaudited)

30 April 2015
£
(audited)
Net return before interest payable and taxation 1,050,824 633,234     1,560,626
Administrative expenses charged to capital (141,145) (152,192) (303,445)
(Increase) / decrease in other debtors (67,771) 150,145 24,104
Decrease in other creditors (17,966) (15,217) (8,584)
Tax suffered on investment income (62,546) (74,603) (113,950)
Exchange differences on foreign currency cash balances (44,308) 391,711 728,558
Net cash inflow from operating activities 717,088 933,078 1,887,309

   

Reconciliation of net cash flow to movement in net funds / (debt) 31 October 2015
£
(unaudited)
31 October 2014
£
(unaudited)

30 April 2015
£
(unaudited)
Increase / (decrease) in cash balances 15,606 279,173 (13,720)
Loan repaid / (drawn down) 249,192 (1,294) (337,632)
Changes in net funds / (debt) resulting from cash flows 264,798 277,879 (351,352)
Movement in net funds / (debt) in the period 264,798 277,879 (351,352)

7.    The Company has credit facilities with KAS Bank N.V and Interactive Brokers Group Incorporated.  Both loans are secured against the investments held in custody accounts with the respective lender.  As at 31st October 2014 the prevailing rate of interest on KAS Bank N.V facility was 1.2% and on Interactive Brokers Group Incorporated the rate was 0.7%.  At 31 October 2015 the amount outstanding with these facilities was £11,965,059 (2014 - £12,214,252)

8.    The total number of shares held in treasury is 307,125. These shares have no voting rights, do not rank for dividend and are excluded from the calculation of net asset value and return per ordinary share. At 31st October 2015 the Company had the authority to purchase a further 7,467,000 of its own shares.  A resolution to renew this authority will be proposed at the Annual General Meeting in 2016.

9.    The figures and financial information for the period ended 30th April 2015 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for the period as defined in section 434 of the Companies Act 2006.  Those accounts have been delivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not contain a statement either under section 498(2) or 498(3) of the Companies Act 2006. The half yearly Report and Account have not been audited or reviewed by the Company’s Auditors. 

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