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NSI New Star Investment Trust Plc

115.00
-6.00 (-4.96%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
New Star Investment Trust Plc LSE:NSI London Ordinary Share GB0002631041 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -6.00 -4.96% 115.00 112.00 118.00 115.00 114.00 115.00 12,849 15:43:35
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 4.74M 3.25M 0.0457 25.16 81.68M

New Star IT PLC Annual Financial Report

18/09/2017 7:00am

UK Regulatory


 
TIDMNSI 
 
NEW STAR INVESTMENT TRUST PLC 
 
This announcement constitutes regulated information. 
 
UNAUDITED RESULTS 
 
FOR THE YEARED 30TH JUNE 2017 
 
New Star Investment Trust plc (the 'Company'), whose objective is to achieve 
long-term capital growth, announces its consolidated results for the year ended 
30th June 2017. 
 
FINANCIAL HIGHLIGHTS 
 
                                                30th June    30th June           % 
                                                     2017         2016      Change 
 
PERFORMANCE 
 
Net assets (GBP '000)                               105,056       89,274        17.7 
 
Net asset value per Ordinary share                147.92p      125.70p        17.7 
 
Mid-market price per Ordinary share               105.00p       76.00p        38.2 
 
Discount of price to net asset value                29.0%        39.5%         n/a 
 
Total Return*                                       17.9%        12.1%         n/a 
 
IA Mixed Investment 40% - 85% Shares (total         16.5%         2.2%         n/a 
return) 
 
MSCI AC World Index (total return, sterling         22.9%        13.9%         n/a 
adjusted) 
 
MSCI UK Index (total return)                        16.7%         3.4%         n/a 
 
 
 
                                                 1st July 2016 to 1st July 2015 to 
                                                   30th June 2017   30th June 2016 
 
REVENUE RETURN 
 
Return per Ordinary share                                   1.14p            0.27p 
 
Proposed Dividend per Ordinary share                        0.80p            0.30p 
 
Dividend paid per Ordinary share                            0.30p            0.30p 
 
 
CAPITAL RETURN 
 
Return per Ordinary share                                  21.38p           13.29p 
 
TOTAL RETURN*                                               17.9%            12.1% 
 
* The total return figure for the Group represents the revenue and capital 
return shown in the consolidated statement of Comprehensive income before 
dividends paid (the Alternative performance measure). 
 
CHAIRMAN'S STATEMENT 
 
PERFORMANCE 
 
Your Company's total return was 17.9% over the year to 30th June 2017. This 
took the year-end net asset value ('NAV') per ordinary share to 147.92p. By 
comparison, the Investment Association's Mixed Investment 40-85% Shares index 
gained 16.5%. Your Directors believe this benchmark is appropriate because your 
Company has, since inception, been invested in a broad range of asset classes. 
Equity markets generated positive returns, with overseas performance enhanced 
in sterling terms as a result of the pound's fall against the dollar and the 
euro. The MSCI AC World Total Return and MSCI UK Total Return Indices gained 
22.9% and 16.7% respectively while UK government bonds fell 1.0%. Further 
information is provided in the investment manager's report. 
 
EARNINGS AND DIVID 
 
The revenue return for the year was 1.14p per share (2016: 0.27p). 
 
Your Company has a revenue surplus in its retained revenue reserve, enabling it 
to pay a dividend. Your directors recommend the payment of a final dividend in 
respect of the year of 0.8p per share (2016: 0.3p). 
 
OUTLOOK 
 
Inflation rises are likely to be modest over the coming months and, as a 
result, the pace of monetary tightening by the world's major central banks is 
likely to be slow. Such an environment would benefit equities at the expense of 
fixed income securities. In response, your Company began the new financial year 
with the majority of its assets in equity funds and with no direct investments 
in bond funds. Within the equity holdings, the focus was on Europe excluding 
the UK and the Asia-Pacific region because such markets appeared modestly 
valued relative to the US. 
 
Should equity market prospects deteriorate as a result of significantly weaker 
economic growth, the Company's investments in cash, gold equities and 
lower-risk assets should offer some diversification and a measure of 
defensiveness during periods of stress in markets. The pattern of steady 
economic growth and relatively low inflation is, however, likely to be 
sustained over the coming months. 
 
CASH AND BORROWINGS 
 
Your Company has no borrowings and ended its financial year with cash 
representing 12.8% of its net asset value. Your Company is likely to maintain a 
significant cash position. 
 
The Company is a small registered Alternative Investment Fund Manager under the 
European Union directive.  The Company's assets now exceed the threshold of 100 
million euros. As a result, should it wish to borrow it would require a change 
in regulatory permissions. 
 
DISCOUNT 
 
Your Company's shares continued to trade at a significant albeit narrowing 
discount to their NAV during the year under review. Your directors have 
discussed various options with a view to reducing this discount but no 
satisfactory solution has yet been found. This position is, however, kept under 
continual review by the board. 
 
BOARD CHANGES 
 
Marcus Gregson will be retiring from the board of your Company at the annual 
meeting after serving for more than 10 years as a director and eight years as 
chairman of our audit committee. We would like to thank Marcus for his 
contribution and counsel during his tenure as a director. 
 
Following Marcus's retirement, we intend to ask shareholders to elect David 
Gamble as a director of your Company. David was chief executive of British 
Airways Pension Investment Management from 1993 to 2004. He has also served as 
a director of numerous financial services companies including a number of 
investment companies. 
 
ANNUAL MEETING 
 
The Annual General Meeting will be held on Thursday, 16th November 2017 at 
11am. 
 
NET ASSET VALUE 
Your Company's unaudited net asset value per share at 31st August 2017 was 
151.72p. 
 
INVESTMENT MANAGER'S REPORT 
 
MARKET REVIEW 
 
The US, the UK and the eurozone experienced modest rises in retail prices 
during the Company's financial year to 30th June 2017. In July 2017, US and 
eurozone core inflation was 1.7% and 1.2% respectively, significantly above the 
rate in June 2016 although below the central bank target rates of 2%. In the 
UK, core inflation was 2.6%, which was above the Bank of England's 2% target. 
Inflation has been fuelled by price increases in 2016 for commodities such as 
oil feeding through into year-on-year comparisons. In the UK, the situation has 
been exacerbated by the pound's fall and the resultant increase in the cost of 
imported goods. 
 
Prices have risen but wage growth remains subdued despite US and UK 
unemployment falling to historically low levels. There has been much debate on 
the reason for workers' apparent lack of bargaining power. Commentators have 
attributed the absence of wage pressure to factors such as greater 
self-employment and less unionisation and technological advances. In the UK, 
higher inflation may lead to a consumer spending squeeze. UK consumers have not 
as yet significantly reined in their spending, leading to a fall in the savings 
ratio. 
 
In response to steady economic growth and resurgent inflation, the Federal 
Reserve has slowly tightened monetary policy, increasing interest rates three 
times during the year under review. In addition, Federal Open Markets Committee 
members have discussed plans to reduce the size of the Fed balance sheet 
progressively from late 2017 onwards. The European Central Bank is committed to 
its asset-purchase programme until 2018 and to maintaining current interest 
rates until some time thereafter. An interest rate rise is, however, expected 
from mid-2018 onwards. Brexit uncertainty has stayed the Bank of England's hand 
so far but it did not deter a minority of Monetary Policy Committee members 
from voting to raise rates in their meetings in June and August. UK government 
bond investors may begin to anticipate tighter monetary policy as the weak 
pound lifts the prices of imported goods, leading to falls for longer-dated 
gilts. 
 
The position of the eurozone countries improved during the year under review, 
both in political terms following the election of centrist candidates in 
Holland and France and from an economic standpoint. Eurozone gross domestic 
product (GDP) increased by 0.6% in the second quarter of 2017, outperforming 
the UK's 0.3% rise. The eurozone economic recovery has lagged the US and the UK 
since the credit crisis. This is partly because the eurozone's federal 
structure made it difficult for the European Central Bank (ECB) to achieve a 
consensus in favour of quantitative easing until several years after the US and 
UK central banks adopted such policies. Eurozone unemployment has fallen, 
however, and the region has a current account surplus and, encouragingly, would 
do so even if the German contribution were excluded from the numbers. This has 
supported the euro, which rose against both the dollar and sterling during the 
year under review. 
 
In the UK, Theresa May's miscalculation in calling a general election was laid 
bare by the loss of the Conservatives' House of Commons majority as voters' 
austerity-fatigue took precedence over the issues of Brexit and the economy. 
Political expediency dictated the terms of the subsequent "confidence and 
supply" agreement with the Democratic Unionist Party (DUP),which includes a 
commitment to increase Northern Irish public spending by GBP1 billion in return 
for the support of the DUP's 10 MPs on matters relating to the budget, defence 
and Brexit. The deal extends until May 2019 when the government may be forced 
to accede to further DUP demands to avoid a general election. With Brexit 
negotiations underway, the UK's stance has been more conciliatory than expected 
but the likely terms of any agreement remain unclear. 
 
In the US, investor optimism following Donald Trump's election as president has 
reduced. His policies of tax cuts, increased infrastructure spending and 
business deregulation should prove expansionary at a time when the economy is 
already growing steadily. In August 2017, Trump's failure to repeal Obamacare 
to fund his planned fiscal stimulus cast doubt, however, on his ability to 
deliver on his election pledges. Rising tensions with North Korea created 
further political uncertainty. 
 
PORTFOLIO REVIEW 
 
Your Company's total return for the year under review was 17.92%. By 
comparison, the Investment Association's Mixed Investment 40-85% Shares Index, 
which measures a peer group of funds with a multi-asset approach to investing 
and a typical investment in global equities in the 40-85% range, rose 16.53%. 
The MSCI AC World Total Return Index gained 22.90% in sterling terms while the 
MSCI United Kingdom Total Return Index rose 16.73%. 
 
The gentle rise in inflation from low levels proved a benign environment for 
global equities and the Company's majority allocation to equity funds benefited 
returns. In particular, the significant investment in income-orientated funds 
throughout the year has enabled your Company to pay an increased dividend to 
shareholders for the 2016-17 financial year. Global bonds returned only 0.67% 
in sterling. During the year, the Company had no direct investments in global 
bonds, which may fall if inflation and interest rates rise further. 
 
Diversification was achieved through a significant allocation to cash held in 
dollars and investments in gold equities and the EF Brompton Global 
Conservative Fund. The dollar gained 2.91% against sterling during the year. 
The Company's investment in BlackRock Gold & General, however, fell 13.78%. 
Gold equities provide a geared exposure to the bullion price, which fell 4.23% 
during the year because the opportunity cost to investors of holding a 
nil-yielding investment increases when interest rates rise. The gold price had, 
however, recovered between the Company's year end and 31st August 2017 because 
of its safe-haven attractions in the face of North Korean sabre-rattling. 
 
Amongst your Company's global equity funds, Fundsmith Equity and Artemis Global 
Income outperformed, gaining 25.01% and 24.80% respectively. The more 
defensively-positioned Newton Global Income holding lagged, rising 16.34%, but 
Polar Capital Global Technology gained 42.18% as technology shares 
outperformed. 
 
The eurozone's improved economic performance contributed to a 28.99% gain for 
equities in Europe excluding the UK in sterling. The euro gained 5.66% against 
the pound, buoying returns for sterling investors. Your Company benefited from 
its significant holdings in Europe ex-UK markets including the FP Crux European 
Special Situations and Standard Life European Equity Income. The change in 
equity market leadership during the first half of the Company's financial year 
in favour of more cyclical "value" stocks proved a headwind for FP Crux 
European Special Situations, your Company's largest holding. The 
euro-denominated Aquilus Inflection fund, which takes both positive and 
negative positions in European equities, gained 11.38%. 
 
UK equities gained 16.73%, with smaller companies, up 29.11%, outperforming 
larger peers as the economy grew more strongly than anticipated after the 
European Union referendum. The Aberforth Geared Income investment trust, which 
has a small company focus, was the Company's best performer, rising 47.00% as 
the underlying portfolio rose strongly and the trust's discount to net asset 
value narrowed ahead of the planned wind-up on 30 June. The Company's 
investment has been rolled over into the successor vehicle, Aberforth Split 
Level Income. Man GLG UK Income also did well, rising 35.74% thanks to its 
mid-cap "value" focus. By contrast, Trojan Income gained only 11.36%, held back 
by its bias towards large companies, which lagged the market. 
 
Asian emerging markets outperformed as fears of US protectionism subsided and 
the pace of monetary policy tightening proved to be gradual. Equities in Asia 
excluding Japan and emerging markets gained 30.76% and 27.79% respectively in 
sterling. Emerging markets appeared attractive to investors on valuation 
grounds compared to developed markets. Within the portfolio, Wells Fargo China 
and Neptune Russia & Greater Russia did best, rising 29.72% and 29.07% 
respectively although Wells Fargo China underperformed the Chinese stockmarket. 
 
In July 2016, the Company invested in the unquoted Embark Group, a leading 
personal pension and small self-administered pension scheme administrator 
through its Hornbuckle and Rowanmoor brands. Additional shares in Embark were 
acquired through a placing of new shares in April to fund an acquisition. 
 
The Company's US equity allocation increased through purchases of the SPDR S&P 
500 and iShares S&P 500 Financials exchange-traded funds (ETFs) in November 
following Trump's election with a mandate for fiscal expansion. The iShares S&P 
500 Financials ETF should benefit from the improving profitability of US 
financial companies as interest rates rise. Their prospects may be further 
enhanced if Trump's plans for financial deregulation come to fruition. 
 
OUTLOOK 
 
Inflation trends will have a significant influence on financial markets over 
the coming months. Equities and other real assets should benefit if inflation 
continues to rise slowly from subdued levels and the pace of monetary 
tightening is gradual. Conversely, longer-duration assets such as longer-dated 
bonds could post losses if inflation continues to rise. The Company ended the 
year under review positioned for this environment, with a majority allocation 
to equity funds and no direct investments in bonds or bond funds. 
 
Some equity markets such as the US were trading at the start of the current 
financial year on high valuations compared to historical standards. The 
strongest potential for further gains may, therefore, exist in lowly-valued 
markets where central bank monetary policy is accommodative such as in Europe 
ex-UK, emerging markets and Japan. The Company began the current financial year 
with significant holdings in Europe excluding the UK and the Asia-Pacific 
region. 
 
It is possible that deflationary forces such as the growth in self-employment 
and technological change may hold inflationary pressures at bay. The lack of 
wage inflation despite historically low unemployment in the US and UK supports 
this view for now. The Company's investments in cash, gold equities and EF 
Brompton Global Conservative should provide diversification and may prove 
defensive should the rise in inflation falter. The recent environment of high 
equity valuations, moderate economic growth and low inflation may, however, 
persist for some time. 
 
SCHEDULE OF TWENTY LARGEST INVESTMENTS AT 30TH JUNE 2017 
 
                                                                         30th June 
                                                                              2017 
 
Holding                               Activity            Bid-market Percentage of 
                                                               value      invested 
                                                              GBP '000     portfolio 
 
FP Crux European Special Situations   Investment Fund         10,918         11.90 
Fund 
 
Fundsmith Equity Fund                 Investment Fund          9,014          9.83 
 
Newton Global Income Fund             Investment Fund          5,524          6.02 
 
Aberforth Split Level Income Trust    Investment Company       4,898          5.34 
 
Polar Capital - Global Technology     Investment Fund          4,208          4.59 
Fund 
 
EF Brompton Global Conservative Fund  Investment Fund          4,014          4.38 
 
Artemis Global Income Fund            Investment Fund          3,930          4.28 
 
Aquilus Inflection Fund               Investment Fund          3,364          3.67 
 
BlackRock Gold & General Fund         Investment Fund          3,223          3.51 
 
Embark Group                          Unquoted Investment      3,130          3.41 
 
Liontrust Asia Income Fund            Investment Fund          2,777          3.03 
 
Man GLG UK Income Fund                Investment Fund          2,732          2.98 
 
Lindsell Train Japanese Equity Fund   Investment Fund          2,694          2.94 
 
EF Brompton Global Opportunities Fund Investment Fund          2,652          2.89 
 
EF Brompton Global Growth Fund        Investment Fund          2,515          2.74 
 
EF Brompton Global Equity Fund        Investment Fund          2,508          2.73 
 
MI Brompton UK Recovery Trust         Investment Fund          2,496          2.72 
 
Trojan Income Fund                    Investment Fund          2,449          2.67 
 
Stewart Investors Indian Subcontinent Investment Fund          2,436          2.66 
Fund 
 
EF Brompton Global Income Fund        Investment Fund          2,215          2.41 
 
                                                              77,697         84.70 
 
Balance held in 20 investments                                14,033         15.30 
 
Total investments                                             91,730        100.00 
 
 
 
The investment portfolio can be further analysed as 
follows: 
 
                                                               GBP '000 
 
Investment funds                                               78,326 
 
Investment companies and exchange traded                        7,920 
funds 
 
Other quoted investments                                          674 
 
Unquoted investments, including loans of                        4,810 
GBP250,000 
 
                                                               91,730 
 
SCHEDULE OF TWENTY LARGEST INVESTMENTS AT 30TH JUNE 2016 
 
                                                                         30th June 
                                                                              2016 
 
Holding                               Activity            Bid-market Percentage of 
                                                               value      invested 
                                                              GBP '000     portfolio 
 
EF Crux European Special Situations   Investment Fund          9,803         12.34 
Fund 
 
Fundsmith Equity Fund                 Investment Fund          8,106         10.20 
 
Newton Global Income Fund             Investment Fund          6,417          8.07 
 
BlackRock Gold &  General Fund        Investment Fund          4,796          6.04 
 
EF Brompton Global Conservative Fund  Investment Fund          3,669          4.62 
 
Aberforth Geared Income Trust         Investment Company       3,361          4.23 
 
Artemis Global Income Fund            Investment Fund          3,254          4.09 
 
First State Indian Subcontinent Fund  Investment Fund          2,904          3.65 
 
Polar Capital Global Technology Fund  Investment Fund          2,868          3.61 
 
Aquilus Inflection Fund               Investment Fund          2,779          3.50 
 
Liontrust Asia Income Fund            Investment Fund          2,338          2.94 
                                                                                  Trojan Income Fund                    Investment Fund          2,286          2.88 
 
EF Brompton Global Opportunities Fund Investment Fund          2,259          2.84 
 
Lindsell Train Japanese Equity Fund   Investment Fund          2,170          2.73 
 
Man GLG UK Income Fund                Investment Fund          2,163          2.72 
 
Neptune Russia & Greater Russia Fund  Investment Fund          2,162          2.72 
 
EF Brompton Global Growth Fund        Investment Fund          2,158          2.72 
 
EF Brompton Global Equity Fund        Investment Fund          2,044          2.57 
 
EF Brompton Global Income Fund        Investment Fund          2,015          2.54 
 
MI Brompton UK Recovery Trust         Investment Fund          1,958          2.46 
 
                                                              69,510         87.47 
 
Balance held in 16 investments                                 9,957         12.53 
 
Total investments                                             79,467        100.00 
 
 
 
The investment portfolio can be further analysed as 
follows: 
 
                                                              GBP '000 
 
Investment funds                                              74,085 
 
Investment companies and exchange traded                       3,361 
funds 
 
Other quoted investments                                         441 
 
Unquoted investments                                           1,580 
 
                                                              79,467 
 
STRATEGIC REVIEW 
 
The Strategic Review is designed to provide information primarily about the 
Company's business and results for the year ended 30th June 2017. The Strategic 
Review should be read in conjunction with the Chairman's Statement and the 
Investment Manager's Report, which provide a review of the year's investment 
activities of the Company and the outlook for the future. 
 
STATUS 
 
The Company is an investment company under section 833 of the Companies Act 
2006.  It is an Approved Company under the Investment Trust (Approved Company) 
(Tax) Regulations 2011 (the 'Regulations') and conducts its affairs in 
accordance with those Regulations so as to retain its status as an investment 
trust and maintain exemption from liability to United Kingdom capital gains 
tax. 
 
The Company is a small registered Alternative Investment Fund Manager under the 
European Union Directive. 
 
INVESTMENT OBJECTIVE AND POLICY 
 
Investment Objective 
 
The Company's investment objective is to achieve long-term capital growth. 
 
Investment Policy 
 
The Company's investment policy is to allocate assets to global investment 
opportunities through investment in equity, bond, commodity, real estate, 
currency and other markets. The Company's assets may have significant 
weightings to any one asset class or market, including cash. 
 
The Company will invest in pooled investment vehicles, exchange traded funds, 
futures, options, limited partnerships and direct investments in relevant 
markets. The Company may invest up to 15% of its net assets in direct 
investments in relevant markets. 
 
The Company will not follow any index with reference to asset classes, 
countries, sectors or stocks. Aggregate asset class exposure to any one of the 
United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or 
Emerging Markets and to any individual industry sector will be limited to 50% 
of the Company's net assets, such values being assessed at the time of 
investment and for funds by reference to their published investment policy or, 
where appropriate, the underlying investment exposure. 
 
The Company may invest up to 20% of its net assets in unlisted securities 
(excluding unquoted pooled investment vehicles) such values being assessed at 
the time of investment. 
 
The Company will not invest more than 15% of its net assets in any single 
investment, such values being assessed at the time of investment. 
 
Derivative instruments and forward foreign exchange contracts may be used for 
the purposes of efficient portfolio management and currency hedging. 
Derivatives may also be used outside of efficient portfolio management to meet 
the Company's investment objective. The Company may take outright short 
positions in relation to up to 30% of its net assets, with a limit on short 
sales of individual stocks of up to 5% of its net assets, such values being 
assessed at the time of investment. 
 
The Company may borrow up to 30% of net assets for short-term funding or 
long-term investment purposes. 
 
No more than 10%, in aggregate, of the value of the Company's total assets may 
be invested in other closed-ended investment funds except where such funds have 
themselves published investment policies to invest no more than 15% of their 
total assets in other listed closed-ended investment funds. 
 
Information on the Company's portfolio of assets with a view to spreading 
investment risk in accordance with its investment policy is given above. 
 
FINANCIAL REVIEW 
 
Net assets at 30th June 2017 amounted to GBP105,056,000 compared with GBP89,274,000 
at 30th June 2016. In the year under review, the NAV per Ordinary share 
increased by 17.7% from 125.70p to 147.92p. 
 
The Group's gross revenue rose to GBP1,715,000 (2016: GBP944,000). Last year the 
Company decided to increase its investment in income focused funds resulting in 
a significant increase in gross income during the year under review (2016: GBP 
nil). After deducting expenses and taxation the revenue profit for the year was 
GBP810,000 (2016: GBP193,000). 
 
Total expenses for the year amounted to GBP898,000 (2016: GBP751,000). In the year 
under review the investment management fee amounted to GBP622,000 (2016: GBP 
509,000). No performance fee was payable in respect of the year under review as 
the Company has not outperformed the cumulative hurdle rate. 
 
Dividends have not formed a central part of the Company's investment 
objective.  The increased investment in income focused funds has enabled the 
Directors to declare an increased dividend.  The Directors propose a final 
dividend of 0.8p per Ordinary share in respect of the year ended 30th June 2017 
(2016: 0.3p).  If approved at the Annual General Meeting, the dividend will be 
paid on 22nd November 2017 to shareholders on the register at the close of 
business on 15th November 2017 (ex-dividend 14th November 2017). 
 
The primary source of the Company's funding is shareholder funds. 
 
While the future performance of the Company is dependent, to a large degree, on 
the performance of international financial markets, which in turn are subject 
to many external factors, the Board's intention is that the Company will 
continue to pursue its stated investment objective in accordance with the 
strategy outlined above.  Further comments on the short-term outlook for the 
Company are set out in the Chairman's Statement and the Investment Manager's 
report. 
 
Throughout the year the Group's investments included seven funds managed by the 
Investment Manager (2016: seven).  No investment management fees were payable 
directly by the Company in respect of these investments. 
 
PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORS 
 
In order to measure the success of the Company in meeting its objectives, and 
to evaluate the performance of the Investment Manager, the Directors review at 
each meeting:  net asset value, income and expenditure, asset allocation and 
attribution, share price of the Company and the discount.  The Directors take 
into account a number of different indicators as the Company does not have a 
formal benchmark. 
 
PRINCIPAL RISKS AND UNCERTAINTIES 
The principal risks identified by the Board, and the steps the Board takes to 
mitigate them, are as follows: 
 
Investment strategy 
 
Inappropriate long-term strategy, asset allocation and manager selection could 
lead to underperformance.  The Board discusses investment performance at each 
of its meetings and the Directors receive reports detailing asset allocation, 
investment selection and performance. 
 
Business conditions and general economy 
 
The Company's future performance is heavily dependent on the performance of 
different equity and currency markets. The Board cannot mitigate the risks 
arising from adverse market movements. However, diversification within the 
portfolio will reduce the impact.  Further information is given in portfolio 
risks below. 
 
Portfolio risks - market price, foreign currency and interest rate risks 
 
Investment returns will be influenced by interest rates, inflation, investor 
sentiment, availability/cost of credit and general economic conditions in the 
UK and globally.  A proportion of the portfolio is in investments denominated 
in foreign currencies and movements in exchange rates could significantly 
affect their sterling value.  The Investment Manager takes all these factors 
into account when making investment decisions but the Company does not normally 
hedge against foreign currency movements.  The Board's policy is to hold a 
spread of investments in order to reduce the impact of the risks arising from 
the above factors by investing in a spread of asset classes and geographic 
regions. 
 
Net asset value discount 
 
The discount in the price at which the Company's shares trade to net asset 
value means that shareholders cannot realise the real underlying value of their 
investment. Over the last few years the Company's share price has been at a 
significant discount to the Company's net asset value.  The Directors review 
regularly the level of discount, however given the investor base of the 
Company, the Board is very restricted in its ability to control the discount to 
net asset value. 
 
Investment Manager 
 
The quality of the team employed by the Investment Manager is an important 
factor in delivering good performance and the loss of key staff could adversely 
affect returns. A representative of the Investment Manager attends each Board 
meeting and the Board is informed if any changes to the investment team 
employed by the Investment Manager are proposed. 
 
Tax and regulatory risks 
 
A breach of The Investment Trusts (Approved Companies) (Tax) Regulations 2011 
(the 'Regulations') could lead to capital gains realised within the portfolio 
becoming subject to UK capital gains tax. A breach of the UKLA Listing Rules 
could result in suspension of the Company's shares, while a breach of company 
law could lead to criminal proceedings, financial and/or reputational damage. 
The Board employs Brompton Asset Management LLP as Investment Manager, and 
Maitland Administration Services Limited as Secretary & Administrator, to help 
manage the Company's legal and regulatory obligations. 
 
Operational 
 
Disruption to, or failure of, the Investment Manager's or Administrator's 
accounting, dealing or payment systems, or the Custodian's records, could 
prevent the accurate reporting and monitoring of the Company's financial 
position. The Company is also exposed to the operational risk that one or more 
of its suppliers may not provide the required level of service. 
 
The Directors confirm that they have carried out an assessment of the risks 
facing the Company, including those that would threaten its business model, 
future performance, solvency and liquidity. 
 
VIABILITY STATEMENT 
 
The assets of the Company consist mainly of securities that are readily 
realisable or cash and it has no significant liabilities.  Investment income 
exceeds annual expenditure and current liquid net assets cover current annual 
expenses for many years.  Accordingly, the Company is of the opinion that it 
has adequate financial resources to continue in operational existence for the 
long term which is considered to be in excess of five years. Five years is 
considered a reasonable period for investors when making their investment 
decisions.  In reaching this view the Directors reviewed the anticipated level 
of annual expenditure against the cash and liquid assets within the portfolio. 
The Directors have also considered the risks the Company faces. 
 
ENVIRONMENTAL, SOCIAL AND COMMUNITY ISSUES 
 
The Company has no employees, with day-to-day management and administration of 
the Company being delegated to the Investment Manager and the Administrator. 
The Company's portfolio is managed in accordance with the investment objective 
and policy; environmental, social and community matters are considered to the 
extent that they potentially impact on the Company's investment returns. 
Additionally, as the Company has no premises, properties or equipment, it has 
no carbon emissions to report on. 
 
The Company has sought, wherever possible, and been provided with assurance 
from each of its main suppliers, that no slaves, forced labour, child labour, 
or labour employed at rates of pay below statutory minimums for the country of 
their operations, are being employed in the provision of services to the 
Company. 
 
GER DIVERSITY 
 
The Board of Directors comprises three male directors.  The Board recognises 
the benefits of diversity, however, the Board's primary consideration when 
appointing new directors is their knowledge, experience and ability to make a 
positive contribution to the Board's decision making regardless of gender. 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AT 30TH JUNE 2017 
 
                                         Year ended                  Year ended 
                                       30th June 2017              30th June 2016 
 
                                   Revenue  Capital             Revenue Capital 
                                    Return   Return    Total     Return  Return   Total 
                           Notes    GBP '000   GBP '000   GBP '000     GBP '000  GBP '000  GBP '000 
 
INVESTMENT INCOME            2       1,686        -    1,686        934       -     934 
 
Other operating income       2          29        -       29         10       -      10 
 
                                     1,715        -    1,715        944       -     944 
 
GAINS AND LOSSES ON 
INVESTMENTS 
 
Gains on investments at 
fair value through profit    9           -   14,814   14,814          -   7,921   7,921 
or loss 
 
Other exchange gains                     -      367      367          -   1,510   1,510 
 
Trail rebates                            -        4        4          -       9       9 
 
                                     1,715   15,185   16,900        944   9,440  10,384 
 
EXPENSES 
 
Management fees              3       (622)        -    (622)      (509)       -   (509) 
 
Other expenses               4       (276)        -    (276)      (242)       -   (242) 
 
                                     (898)        -    (898)      (751)       -   (751) 
 
PROFIT BEFORE FINANCE                  817   15,185   16,002        193   9,440   9,633 
COSTS AND TAX 
 
Finance costs                            -        -        -          -       -       - 
 
PROFIT BEFORE TAX                      817   15,185   16,002        193   9,440   9,633 
 
Tax                          5         (7)        -      (7)          -       -       - 
 
PROFIT FOR THE YEAR                    810   15,185   15,995        193   9,440   9,633 
 
EARNINGS PER SHARE 
 
Ordinary shares (pence)      7       1.14p   21.38p   22.52p      0.27p  13.29p  13.56p 
 
The total column of this statement represents the Group's profit and loss 
account, prepared in accordance with IFRS, as adopted by the European Union. 
The supplementary Revenue Return and Capital Return columns are both prepared 
under guidance published by the Association of Investment Companies. All 
revenue and capital items in the above statement derive from continuing 
operations. 
 
No operations were acquired or discontinued during the year. 
 
All income is attributable to the equity holders of the parent company. There 
are no minority interests. 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30TH JUNE 2017 
 
                                     Note   Share     Share Special Retained 
                                          capital   premium reserve earnings   Total 
                                           GBP '000    GBP '000  GBP '000   GBP '000  GBP '000 
 
AT 30TH JUNE 2016                             710    21,573  56,908   10,083  89,274 
 
Total comprehensive income for the              -         -       -   15,995  15,995 
year 
 
Dividend paid                         8         -         -       -    (213)   (213) 
 
AT 30TH JUNE 2017                             710    21,573  56,908   25,865 105,056 
 
Included within Retained earnings were GBP851,000 of Company reserves available 
for distribution. 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30TH JUNE 2016 
 
                                            Share     Share Special Retained 
                                          capital   premium reserve earnings   Total 
                                           GBP '000    GBP '000  GBP '000   GBP '000  GBP '000 
 
AT 30TH JUNE 2015                             710    21,573  56,908      663  79,854 
 
Total comprehensive income for the              -         -       -    9,633   9,633 
year 
 
Dividend paid                                   -         -       -    (213)   (213) 
 
AT 30TH JUNE 2016                             710    21,573  56,908   10,083  89,274 
 
Included within Retained earnings were GBP255,000 of Company reserves available 
for distribution. 
 
CONSOLIDATED BALANCE SHEET AT 30TH JUNE 2017 
 
                                                         Notes  30th June 30th June 
                                                                     2017      2016 
                                                                   GBP '000    GBP '000 
 
NON-CURRENT ASSETS 
 
Investments at fair value through profit or loss           9       91,730    79,467 
 
CURRENT ASSETS 
 
Other receivables                                         11           85        55 
 
Cash and cash equivalents                                 12       13,451     9,938 
 
                                                                   13,536     9,993 
 
TOTAL ASSETS                                                      105,266    89,460 
 
CURRENT LIABILITIES 
 
Other payables                                            13        (210)     (186) 
 
TOTAL ASSETS LESS CURRENT LIABILITIES                             105,056    89,274 
 
NET ASSETS                                                        105,056    89,274 
 
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS 
 
Called-up share capital                                   14          710       710 
 
Share premium                                             15       21,573    21,573 
 
Special reserve                                           15       56,908    56,908 
 
Retained earnings                                         15       25,865    10,083 
 
TOTAL EQUITY                                                      105,056    89,274 
 
NET ASSET VALUE PER ORDINARY SHARE (Pence)                16      147.92p   125.70p 
 
CONSOLIDATED CASH FLOW STATEMENTS AT 30TH JUNE 2017 
 
                                                      Notes   Year ended Year ended 
                                                               30th June  30th June 
                                                                    2017       2016 
                                                                   Group      Group 
                                                                  GBP '000     GBP '000 
 
NET CASH INFLOW FROM OPERATING 
ACTIVITIES                                                           808        212 
 
INVESTING ACTIVITIES 
 
Purchase of investments                                          (6,500)   (14,613) 
 
Sale of investments                                                9,051     11,153 
 
NET CASH INFLOW/(OUTFLOW) FROM 
INVESTING ACTIVITIES                                               2,551    (3,460) 
 
FINANCING 
 
Equity dividends paid                                   8          (213)      (213) 
 
NET CASH INFLOW/(OUTFLOW) AFTER                                    3,146    (3,461) 
FINANCING 
 
INCREASE/( DECREASE) IN CASH                                       3,146    (3,461) 
 
 
RECONCILIATION OF NET CASH FLOW 
TO MOVEMENT IN CASH & CASH 
EQUIVALENTS 
 
Increase/( decrease) in cash                                       3,146    (3,461) 
resulting from cash flows 
 
Exchange movements                                                   367      1,510 
 
Movement in net funds                                              3,513    (1,951) 
 
Net funds at start of the year                                     9,938     11,889 
 
CASH & CASH EQUIVALENTS AT                          17        13,451      9,938 
OF YEAR 
 
 
RECONCILIATION OF PROFIT BEFORE 
FINANCE COSTS AND TAXATION TO 
NET CASH FLOW FROM OPERATING 
ACTIVITIES 
 
Profit before finance costs and                         2         16,002      9,633 
taxation 
 
Gains on investments                                            (14,814)    (7,921) 
 
Exchange differences                                               (367)    (1,510) 
 
Capital trail rebates                                                (4)        (9) 
 
Net revenue gains before 
finance costs and taxation                                           817        193 
 
Increase in debtors                                                 (18)        (7) 
 
Increase in creditors                                                 24         19 
 
Taxation                                                            (19)        (2) 
 
Capital trail rebates                                                  4          9 
 
NET CASH INFLOW FROM OPERATING 
ACTIVITIES                                                           808        212 
 
NOTES TO THE ACCOUNTS FOR THE YEARED 30TH JUNE 2017 
 
1.            ACCOUNTING POLICIES 
 
The financial statements of the Group have been prepared in accordance with 
International Financial Reporting Standards ('IFRS'). These comprise standards 
and interpretations  approved by the International Accounting Standards Board 
('IASB'), together with  interpretations of the International Accounting 
Standards and Standing Interpretations Committee ('IASC') that remain in 
effect, and to the extent that they have been adopted by the European Union. 
 
These financial statements are presented in pounds sterling, the Group's 
functional currency, being the currency of the primary economic environment in 
which the Group operates, rounded to the nearest thousand. 
 
(a) Basis of preparation: The financial statements have been prepared on a 
going concern basis. The principal accounting policies adopted are set out 
below. 
 
Where presentational guidance set out in the Statement of Recommended Practice 
'Financial Statements of Investment Trust Companies and Venture Capital Trusts' 
('SORP') issued by the Association of Investment Companies ('AIC') in November 
2014 and updated in January 2017 with consequential amendments is consistent 
with the requirements of IFRS, the Directors have sought  to  prepare  the 
financial  statements  on  a  basis  compliant  with  the recommendations of 
the SORP. 
 
(b) Basis of consolidation: The consolidated financial statements include the 
accounts of the Company and its subsidiary made up to 30th June 2017. 
 
The parent company is an investment entity as defined by IFRS 10 and assets are 
held at their fair value.  The consolidated accounts include subsidiaries which 
are an integral part of the Group and not investee companies. 
 
Subsidiaries are consolidated from the date of their acquisition, being the 
date on which the Company obtains control, and continue to be consolidated 
until the date that such control ceases. The financial statements of the 
subsidiary used in the preparation of the consolidated financial statements are 
based on consistent accounting policies. All intra-group balances and 
transactions, including unrealised profits arising therefrom, are eliminated. 
Subsidiaries are valued at their NAV in the accounts of the Company. 
 
(c) Presentation of Statement of Comprehensive Income: In order to better 
reflect the activities of an investment trust company and in accordance with 
guidance issued by the AIC, supplementary information which analyses the 
consolidated statement of comprehensive income between items of a revenue and 
capital nature has been presented alongside the consolidated statement of 
comprehensive income. 
 
In accordance with the Company's Articles of Association, net capital returns 
may not be distributed by way of a dividend. Additionally, the net revenue 
profit is the measure the Directors believe is appropriate in assessing the 
Group's compliance with certain requirements set out in the Investment Trust 
(Approved Company) (Tax) Regulations 2011. 
 
(d) Use of estimates: The preparation of financial statements requires the 
Group to make estimates and assumptions that affect items reported in the 
consolidated and company balance sheets and consolidated statement of 
comprehensive income and the disclosure of contingent assets and liabilities at 
the date of the financial instruments.  Although these estimates are based on 
the Directors' best knowledge of current facts, circumstances and, to some 
extent, future events and actions, the Group's actual results may ultimately 
differ from those estimates, possibly significantly.  The most significant 
estimate relates to the valuation of unquoted investments. 
 
(e) Revenue: Dividends and other such distributions from investments are 
credited to the revenue column of the consolidated statement of comprehensive 
income on the day in which they are quoted ex-dividend.  Where the Company has 
elected to receive its dividends in the form of additional shares rather than 
in cash and the amount of the cash dividend is recognised as income, any excess 
in the value of the shares received over the amount recognised is credited to 
the capital reserve.  Deemed revenue from non-reporting funds is credited to 
the revenue account. Interest on fixed interest securities and deposits is 
accounted for on an effective yield basis. 
 
(f) Expenses: Expenses are accounted for on an accruals basis.  Management 
fees, administration and other expenses, with the exception of transaction 
charges, are charged to the revenue column of the consolidated statement of 
comprehensive income.  Transaction charges are charged to the capital column of 
the consolidated statement of comprehensive income. 
 
(g) Investments held at fair value: Purchases and sales of investments are 
recognised and derecognised on the trade date where a purchase or sale is under 
a contract whose terms require delivery within the timeframe established by the 
market concerned, and are initially measured at fair value. 
 
All investments are classified as held at fair value through profit or loss on 
initial recognition and are measured at subsequent reporting dates at fair 
value, which is either the bid price or the last traded price, depending on the 
convention of the exchange on which the investment is quoted. Investments in 
units of unit trusts or shares in OEICs are valued at the bid price for dual 
priced funds, or single price for non-dual priced funds, released by the 
relevant investment manager.  Unquoted investments are valued by the Directors 
at the balance sheet date based on recognised valuation methodologies, in 
accordance with International Private Equity and Venture Capital ('IPEVC') 
Valuation Guidelines such as dealing prices or third party valuations where 
available, net asset values and other information as appropriate. 
 
(h) Taxation: The charge for taxation is based on taxable income for the year. 
Withholding tax deducted from income received is treated as part of the 
taxation charge against income.  Taxation deferred or accelerated can arise due 
to temporary differences between the treatment of certain items for accounting 
and taxation purposes. Full provision is made for deferred taxation under the 
liability method on all temporary differences not reversed by the Balance Sheet 
date. No deferred tax provision is made against deemed reporting offshore 
funds.  Deferred tax assets are only recognised when there is more likelihood 
than not that there will be suitable profits against which they can be applied. 
 
(i) Foreign currency: Assets and liabilities denominated in foreign currencies 
are translated at the rates of exchange ruling at the balance sheet date. 
Foreign currency transactions are translated at the rates of exchange 
applicable at the transaction date.  Exchange gains and losses are taken to the 
revenue or capital column of the consolidated statement of comprehensive income 
depending on the nature of the underlying item. 
 
(j)  Capital reserve: The following are accounted for in this reserve: 
 
- gains and losses on the realisation of investments together with the related 
taxation effect; 
 
- foreign exchange gains and losses on capital transactions, including those on 
settlement, together with the related taxation effect; 
 
- revaluation gains and losses on investments; and 
 
- trail rebates received from the managers of the Company's investments. 
 
The capital reserve is not available for the payment of dividends. 
 
(k) Special reserve: The special reserve can be used to finance the redemption 
and/or purchase of shares in issue. 
 
(l) Cash and cash equivalents: Cash and cash equivalents comprise current 
deposits and balances with banks. Cash and cash equivalents may be held for the 
purpose of either asset allocation or managing liquidity. 
 
(m)Dividends payable: Dividends are recognised from the date on which they are 
irrevocably committed to payment. 
 
(n) Segmental Reporting: The Directors consider that the Group is engaged in a 
single segment of business with the primary objective of investing in 
securities to generate long term capital growth for its shareholders. 
Consequently no business segmental analysis is provided. 
 
(o) New standards, amendments to standards and interpretations effective for 
annual accounting periods beginning after 1 July 2016: 
 
There have been no new standards, amendment to standards and interpretations 
effective for annual accounting periods beginning after 1 July 2016 that impact 
these financial statements. 
 
(p) Accounting standards issued but not yet effective: Standards issued but not 
yet effective up to the date of issuance of the Group's Report & Accounts are 
listed below. This listing of standards and interpretations issued are those 
the Group reasonably expects will have an impact on disclosure, financial 
position and/or financial performance, when applied at a future date. The Group 
intends to adopt those standards (where applicable) when they become effective. 
 
 
The revised IFRS 9 Financial Instruments replaces IAS 39 and applies to the 
classification and measurement and impairment of financial assets and financial 
liabilities, and hedge accounting.  The adoption of IFRS 9 will have an effect 
on the classification but not the measurement of the Group's financial assets, 
but will potentially have no impact on the classification and measurement of 
financial liabilities.  It will also introduce a new expected loss impairment 
model requiring more timely recognition of expected credit losses and a 
reformed model for hedge accounting with enhanced disclosure of risk management 
activity.  The standard is effective for annual periods beginning on or after 1 
January 2018. 
 
2.            INVESTMENT INCOME 
 
                                                           Year ended  Year ended 
                                                            30th June   30th June 
                                                                 2017        2016 
                                                               GBP '000      GBP '000 
 
INCOME FROM INVESTMENTS 
 
UK net dividend income                                          1,540         877 
 
Unfranked investment income                                       146          57 
 
                                                                1,686         934 
 
OTHER OPERATING INCOME 
 
Bank interest receivable                                           28          10 
 
Loan interest income                                                1           - 
 
                                                                   29          10 
 
TOTAL INCOME COMPRISES 
 
Dividends                                                       1,686         934 
 
Other income                                                       29          10 
 
                                                                1,715         944 
 
The above dividend and interest income has been included in the profit before 
finance costs and taxation included in the cash flow statement. 
 
3.            MANAGEMENT FEES 
 
                                             Year ended              Year ended 
                                           30th June 2017          30th June 2016 
 
                                       Revenue Capital   Total  Revenue Capital  Total 
                                        GBP '000  GBP '000  GBP '000   GBP '000  GBP '000 GBP '000 
 
Investment management fee                  622       -     622      509       -    509 
 
Performance fee                              -       -       -        -       -      - 
 
                                           622       -     622      509       -    509 
 
At 30th June 2017 there were amounts accrued of GBP162,000 (2016: GBP138,000) for 
investment management fees. 
 
4.            OTHER EXPENSES 
 
                                                          Year ended   Year ended 
                                                           30th June    30th June 
                                                                2017         2016 
                                                              GBP '000       GBP '000 
 
Directors' remuneration                                           50           50 
 
Administrative and secretarial fee                                94           94 
 
Auditors' remuneration 
 
- Audit                                                           31           27 
 
- Interim review                                                   8            8 
 
-Taxation compliance services?                                     -           12 
 
Other                                                             93           51 
 
                                                                 276          242 
 
?The 2016 expenses cover two tax periods. 
 
Allocated to: 
 
- Revenue                                                        276          242 
 
- Capital                                                          -            - 
 
                                                                 276          242 
 
5.            TAXATION 
 
 1. Analysis of tax charge for the year: 
 
                                         Year ended                  Year ended 
                                       30th June 2017              30th June 2016 
 
                                   Revenue  Capital             Revenue Capital 
                                    Return   Return    Total     Return  Return   Total 
                                    GBP '000   GBP '000   GBP '000     GBP '000  GBP '000  GBP '000 
 
Overseas tax                            18        -       18          -       -       - 
 
Recoverable income tax                (11)        -     (11)          -       -       - 
 
Total current tax for the                7        -        7          -       -       - 
year 
 
Deferred tax                             -        -        -          -       -       - 
 
Total tax for the year                   7        -        7          -       -       - 
(note 5b) 
 
(b) Factors affecting tax charge for the year: 
 
The charge for the year of GBP7,000 (2016: GBPnil) can be reconciled to the profit 
per the consolidated statement of comprehensive income as follows: 
 
                                                           Year ended  Year ended 
                                                            30th June   30th June 
                                                                 2017        2016 
                                                               GBP '000      GBP '000 
 
Total profit before tax                                        16,002       9,633 
 
 
Theoretical tax at the UK corporation tax rate of 19.75%        3,162       1,927 
(2016: 20.0%) 
 
Effects of: 
 
Non-taxable UK dividend income                                  (304)       (176) 
 
Gains and losses on investments that are not taxable          (3,000)     (1,886) 
 
Excess expenses not utilised                                      153         144 
 
Overseas dividends which are not taxable                         (11)         (9) 
 
Overseas tax                                                       18           - 
 
Recoverable income tax                                           (11)           - 
 
Total tax for the year                                              7           - 
 
Due to the Company's tax status as an investment trust and the intention to 
continue meeting the conditions required to maintain approval of such status in 
the foreseeable future, the Company has not provided tax on any capital gains 
arising on the revaluation or disposal of investments. 
 
There is no deferred tax (2016: GBPnil) in the capital account of the Company. 
There is no deferred tax charge in the revenue account (2016: GBPnil). 
 
At the year-end there is an unrecognised deferred tax asset of GBP386,000 at 17% 
(2016: GBP420,000) as a result of excess expenses. 
 
6.            COMPANY RETURN FOR THE YEAR 
 
The Company's total return for the year was GBP15,995,000 (2016: GBP9,633,000). 
 
7.            RETURN PER ORDINARY SHARE 
 
 Total return per Ordinary share is based on the Group total return on ordinary 
activities after taxation of GBP15,995,000 (2016: GBP9,633,000) and on 71,023,695 
(2016: 71,023,695) Ordinary shares, being the weighted average number of 
Ordinary shares in issue during the year. 
 
Revenue return per Ordinary share is based on the Group revenue profit on 
ordinary activities after taxation of GBP810,000 (2016: GBP193,000) and on 
71,023,695 (2016: 71,023,695) Ordinary shares, being the weighted average 
number of Ordinary shares in issue during the year. 
 
Capital return per Ordinary share is based on net capital gains for the year of 
GBP15,185,000 (2016: GBP9,440,000) and on 71,023,695 (2016: 71,023,695) Ordinary 
shares, being the weighted average number of Ordinary shares in issue during 
the year. 
 
8.            DIVIDS ON EQUITY SHARES 
 
Amounts recognised as distributions in the year: 
 
                                                            Year ended   Year ended 
                                                             30th June    30th June 
                                                                  2017         2016 
                                                                GBP '000       GBP '000 
 
 
   Dividends paid during the year                                  213          213 
Dividends payable in respect of the year ended: 
 
30th June 2017: 0.8p (2016: 0.3p) per share                        568          213 
 
It is proposed that a dividend of 0.8p per share will be paid in respect of the 
current financial year. 
 
9.            INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                                                            Year ended   Year ended 
                                                             30th June    30th June 
                                                                  2017         2016 
                                                                GBP '000       GBP '000 
 
GROUP                                                           91,730       79,467 
 
ANALYSIS OF INVESTMENT 
 
PORTFOLIO - GROUP 
 
                                                          Listed*  Unlisted    Total 
                                                           GBP '000    GBP '000   GBP '000 
 
Opening book cost                                          58,833     4,325   63,158 
 
Opening investment holding gains/(losses)                  19,054   (2,745)   16,309 
 
Opening valuation                                          77,887     1,580   79,467 
 
Movement in period 
 
Purchases at cost                                           3,270     3,230    6,500 
 
Sales 
 
- Proceeds                                                (9,051)         -  (9,051) 
 
- Realised gains on sales                                   2,739         -    2,739 
 
Movement in investment holding gains for the year          12,075         -   12,075 
 
Closing valuation                                          86,920     4,810   91,730 
 
Closing book cost                                          55,791     7,555   63,346 
 
Closing investment holding gains/(losses)                  31,129   (2,745)   28,384 
 
Closing valuation                                          86,920     4,810   91,730 
 
* Listed investments include unit trust and OEIC funds. 
 
                                                           Year ended   Year ended 
                                                            30th June    30th June 
                                                                 2017         2016 
                                                               GBP '000       GBP '000 
 
ANALYSIS OF CAPITAL GAINS AND LOSSES 
 
Realised gains on sales of investments                          2,739        1,096 
 
Increase in investment holding gains                           12,075        6,825 
 
Net gains on investments attributable to ordinary              14,814        7,921 
shareholders 
 
The purchase and sale proceeds figures above include transaction costs on 
purchases of GBP2,282 (2016: GBP685) and on sales of GBPnil (2016: GBP6,373). 
 
10.          INVESTMENT IN SUBSIDIARY UNDERTAKING 
 
The Company owns the whole of the issued share capital (GBP1) of JIT Securities 
Limited, an investment company registered in England and Wales. 
 
The financial position of the subsidiary is summarised as follows: 
 
                                                           Year ended  Year ended 
                                                            30th June   30th June 
                                                                 2017        2016 
                                                               GBP '000      GBP '000 
 
Net assets brought forward                                        503         502 
 
Profit for year                                                     1           1 
 
Net assets carried forward                                        504         503 
 
11.          OTHER RECEIVABLES 
 
                                                            30th June   30th June 
                                                                 2017        2016 
                                                                Group       Group 
                                                               GBP '000      GBP '000 
 
Prepayments and accrued income                                     70          52 
 
Taxation                                                           15           3 
 
Amounts owed by subsidiary undertakings                             -           - 
 
                                                                   85          55 
 
 
12.          CASH AND CASH EQUIVALENTS 
 
                                                                30th June    30th June 
                                                                     2017         2016 
                                                                    Group        Group 
                                                                   GBP '000       GBP '000 
 
Cash at bank and on deposit                                        13,451        9,938 
 
13.          OTHER PAYABLES 
 
                                                           30th June     30th June 
                                                                2017          2016 
                                                               Group         Group 
                                                              GBP '000        GBP '000 
 
Accruals                                                         210           186 
 
14.          CALLED UP SHARE CAPITAL 
 
                                                             30th June    30th June 
                                                                  2017         2016 
                                                                GBP '000       GBP '000 
 
Authorised 
 
305,000,000 (2016: 305,000,000) Ordinary shares of GBP0.01         3,050        3,050 
each 
 
Issued and fully paid 
 
71,023,695 (2016: 71,023,695) Ordinary shares of GBP0.01             710          710 
each 
 
15.          RESERVES 
 
                                                            Share  Special Retained 
                                                          Premium  Reserve earnings 
                                                          account   GBP '000   GBP '000 
                                                           GBP '000 
 
GROUP 
 
At 30th June 2016                                          21,573   56,908   10,083 
 
Increase in investment holding gains                            -        -   12,075 
 
Net gains on realisation of investments                         -        -    2,739 
 
Gain on foreign currency                                        -        -      367 
 
Trail rebates                                                   -        -        4 
 
Retained revenue profit for year                                -        -      810 
 
Dividend paid                                                                 (213) 
 
At 30th June 2017                                          21,573   56,908   25,865 
 
The components of retained earnings are set out below: 
 
                                                            30th June    30th June 
                                                                 2017         2016 
                                                               GBP '000       GBP '000 
 
GROUP 
 
Capital reserve - realised                                    (3,522)      (6,632) 
 
Capital reserve - revaluation                                  28,384       16,309 
 
Revenue reserve                                                 1,003          406 
 
                                                               25,865       10,083 
 
 
16.          NET ASSET VALUE PER ORDINARY SHARE 
 
The net asset value per Ordinary share is calculated on net assets of GBP 
105,056,000 (2016: GBP89,274,000) and 71,023,695 (2016: 71,023,695) Ordinary 
shares in issue at year end. 
 
17.          ANALYSIS OF CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 
 
                                             At 1st     Cash   Exchange     At 30th 
                                          July 2016     flow   movement   June 2017 
                                             GBP '000                          GBP '000 
 
GROUP 
 
Cash at bank and on deposit                   9,938    3,146        367      13,451 
 
 
18.          FINANCIAL INFORMATION 
 
2017 Financial information 
 
The figures and financial information for 2017 are unaudited and do not 
constitute the statutory accounts for the year.  The preliminary statement has 
been agreed with the Company's auditors and the Company is not aware of any 
likely modification to the auditor's report required to be included with the 
annual report and accounts for the year ended 30th June 2017. 
 
2016 Financial information 
 
The figures and financial information for 2016 are extracted from the published 
Annual Report and Accounts for the year ended 30th June 2016 and do not 
constitute the statutory accounts for that year. The Annual Report and 
Accounts  (available on the Company's website www.nsitplc.com) has been 
delivered to the Registrar of Companies and includes the Report and Independent 
Auditors which was unqualified and did not contain a statement under either 
section 498(2) or section 498(3) of the Companies Act 2006. 
 
Annual Report and Accounts 
 
The accounts for the year ended 30th June 2017 will be sent to shareholders in 
October 2017 and will be available on the Company's website or in hard copy 
format at the Company's registered office, 1 Knightsbridge Green, London SW1X 
7QA. 
 
The Annual General Meeting of the Company will be held on 16th November 2017 at 
11.00am at 1 Knightsbridge Green, London SW1X 7QA. 
 
15th September 2017 
 
 
 
END 
 

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