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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sherborne Inv A | LSE:SIAG | London | Ordinary Share | GG00BFH56B54 | A' ORD SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 400.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMSIAG
RNS Number : 2184J
Sherborne Investors (Guernsey) A
03 August 2012
3 August 2012
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
Half-Yearly Report and Consolidated Financial Statements
For the period from 1 January 2012 to 30 June 2012
CHAIRMAN'S STATEMENT
Our investment in F&C Asset Management plc ("F&C") continues to progress following the announcement of the results of F&C's second phase of the strategic review on 15 May 2012.
At 30 June 2012, we held an economic interest relating to 116,191,738 ordinary shares, or 21.41% of the outstanding shares in F&C, through a holding of 19.99% in ordinary shares and the balance in total return equity swaps. As at 30 June 2012 our investment cost basis, net of dividends received from F&C and gross gains realised on contracts for difference in prior periods, was GBP69,385,222, or 59.72 pence per share. As at the date of this letter our economic exposure to F&C remains unchanged.
During the first half of 2012 the Company's investment subsidiary, SIGA, LP, also made purchases of shares in the Company. The shares were trading at a material discount to the market value of their net assets, which consisted substantially of cash and shares in F&C. As at 30 June 2012 SIGA, LP held 7,604,903 ordinary shares, or 7.24% of the outstanding shares in the Company. The shares remain outstanding and available for sale by SIGA, LP. However, for accounting purposes these shares are reflected as treasury shares in the Company's consolidated financial statements.
Dividend
On 25 May 2012, F&C paid a dividend of 2.0 pence per share to shareholders on the register at 30 March 2012, of which the Company was one. The Company's Board, in turn, declared a dividend on 6 June 2012 of 1.9 pence per share which was paid on 18 July 2012 to shareholders on the register at 15 June 2012.
Net Asset Value
At 30 June 2012, the net asset value attributable to shareholders of the Company was GBP111,992,161 or 114.99 pence per share. The Company's net asset value was based on the closing price of 83.00 pence as at 29 June 2012 for the shares of F&C.
We look forward to updating you on further developments at the time of the annual results.
Ian Brindle,
Chairman
Sherborne Investors (Guernsey) A Limited
2 August 2012
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
DIRECTORS' REPORT
The directors present their half-yearly report on the affairs of the Company and its subsidiary (together, the "Group"), together with the financial statements and auditor's independent review report, for the period from 1 January 2012 to 30 June 2012.
Principal activities and investing policy
Sherborne Investors (Guernsey) A Limited (the "Company") is a Guernsey domiciled company incorporated on 18 January 2010 with limited liability. The Company's shares were admitted to trading on AIM on 9 March 2010.
The Company is a limited partner in SIGA, LP (the "Investment Partnership"), a limited partnership registered in Guernsey on 19 January 2010, holding a 99.98% capital interest. The Company aims to provide investors with capital growth through its investment in the Investment Partnership to which it has committed GBP100 million, representing substantially all of the Company's net proceeds from its initial public offering. The Company will effect its investment policy indirectly through the Investment Partnership, which will seek to acquire a significant minority (less than 29.9 per cent) equity investment in a "Selected Target Company". The Group intends that the holding in the Selected Target Company shall not reach such a level as to require the Group to make a bid for the entire Selected Target Company and, therefore, the Group will not have control over the Selected Target Company.
The Group's investment policy is to invest in one target company at a time. Therefore, the Group will not seek to reduce risk through diversification. If, after acquiring a shareholding, the share price of the Selected Target Company rises to a level at which further investment and the effort of a Turnaround is, in the Investment Manager's opinion, no longer justified or otherwise no longer presents a viable Turnaround opportunity, the Investment Partnership intends to sell (and distribute the proceeds to the Company) or distribute in kind the holding to the limited partners, rather than seeking to join the board of directors or otherwise to engage with the company. In these circumstances, the Company intends to distribute any realised net profits received from the Investment Partnership to the Shareholders. In such event, an amount equal to the Company's capital contribution for the initial Selected Target Company (less any losses on the sale) may be recalled by the Investment Partnership and invested into a new target (a "New Target Company"). This process may be repeated until a Turnaround has been effected.
The investment in the Selected Target Company may be in shares but can also be in warrants, convertibles, derivatives and any other equity, debt or other securities. The holding period for the investment in the Selected Target Company is neither fixed nor predictable, but the Company expects that a typical holding period would be greater than one year.
During the period ended 31 December 2010, the board of directors of the Company approved a Selected Target Company, F&C Asset Management plc ("F&C"). At 30 June 2012, the Investment Partnership held an economic interest of 21.41% of the Selected Target Company's outstanding shares, through a holding of 19.99% in ordinary shares and the balance in total return equity swaps.
Dividend policy
The Company's dividend policy, subject to the discretion of the directors who reserve the right to retain amounts for working capital, is to pay dividends to Shareholders following receipt of any distributions from the Investment Partnership. This will be dependent on the frequency with which the Selected Target Company pays dividends to its shareholders (of which the Investment Partnership will be one).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
DIRECTORS' REPORTcontinued
If dividends are received from the Selected Target Company, the Investment Partnership intends to distribute to its limited partners substantially all of the dividend proceeds after allowing for the Investment Partnership's expenses. The Company, in turn, intends promptly to distribute to Shareholders substantially all of the dividend proceeds after allowing for the Company's expenses.
Business review
A review of the Company's business during the period and an indication of likely future developments are contained in the Chairman's Statement.
Capital
Details of the Company's capital are provided in note 9 to the consolidated financial statements. All shares carry equal voting rights.
Substantial interests
As of the date of this report the Company had received notification of the following material shareholdings:
Hot Features
Premium
Number of % of issued
Ordinary share
Shareholder Shares capital
--------------------------------- ----------- ------------
Sherborne Investors GP,
LLC 27,604,903 26.3%
Aviva plc 20,783,592 19.8%
Ameriprise Financial,
Inc. 16,181,489 15.4%
AEGON UK Group of Companies 12,500,000 11.9%
Lloyds Banking Group plc 5,418,035 5.2%
Ritchie European Multi-Strategy
Trading, Ltd. 5,000,000 4.8%
BlackRock UK Emerging
Companies Hedge Fund 3,400,000 3.2%
--------------------------------- ----------- ------------
Post balance sheet events
Details of events that have occurred after the date of the consolidated Statement of Financial Position are provided in note 12 to the consolidated interim financial statements.
Dividend
An interim dividend payment in the amount of GBP1,995,000 (equating to 1.9 pence per share) has been made in respect of the year ending 31 December 2012 and was paid on 18 July 2012.
Independent Auditor
Deloitte LLP was reappointed as auditor to the Company at the Annual General Meeting on 27 April 2012.
By order of the Board of Directors
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from 1 January 2012 to 30 June 2012
1 January 1 January 1 January 2011
2012 to 2011 to to
30 June 2012 30 June 2011 31 December
2011
(unaudited) (audited) (audited)
Notes GBP GBP GBP GBP GBP GBP
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
Income 1(e)
Unrealised
gain/(loss)
on investment
held at fair
value through
profit or 1(d),
loss 5 20,074,680 (8,917,104) (18,596,596)
Realised gain
on investment - 23,616 23,616
Dividend income 2,127,943 1,954,800 3,007,634
Bank interest
income 107,878 142,132 297,917
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
22,310,501 (6,796,556) (15,267,429)
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
Expenses 1(f)
Professional
fees 128,998 426,616 569,836
Trading and
custodian
fees 42,775 78,343 116,233
Administrative
fees 240,087 226,817 413,085
Other fees 17,723 113,317 45,184
Management
fees 392,838 394,982 761,169
Directors'
fees 2 55,000 55,202 110,202
Tax services 9,610 - 14,613
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
(887,031) (1,295,277) (2,030,322)
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
Consolidated
comprehensive
gain / (loss)
for the period 21,423,470 (8,091,833) (17,297,751)
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
Income/(Loss)
attributable
to:
Shareholders 19,661,188 (7,274,079) (17,294,318)
Non-controlling 1(k),
interest 13 1,762,282 (817,754) (3,433)
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
Weighted average
number of
shares outstanding 101,075,376 105,000,000 105,000,000
Basic and
diluted gain
/ (loss) per
share (pence) 4 19.45 (6.93) (16.47)
--------------------- ------ -------- ------------ ------------- ------------ -------- -------------
All revenue and expenses are derived
from continuing operations.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2012
30 June 2012 30 June 2011 31 December
(audited) 2011 (audited)
(unaudited)
Notes GBP GBP GBP GBP GBP GBP
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Non-current
Assets
Financial
assets at
fair value
through
profit or
loss 5 96,439,142 75,824,292 72,048,100
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
96,439,142 75,824,292 72,048,100
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Current
Assets
Prepaid
expenses 6 25,879 25,087 31,628
Cash and
cash equivalents 7 19,650,397 36,575,258 28,482,761
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
19,676,276 36,600,345 28,514,389
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Current
Liabilities
Trade and
other payables 8 (2,345,303) (1,903,797) (191,867)
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Net Current
Assets 17,330,973 34,696,548 28,322,522
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Net Assets GBP 113,770,115 GBP 110,520,840 GBP 100,370,622
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Capital
and Reserves
Called up
share capital
and share
premium 9 102,646,625 102,646,625 102,646,625
Shares held
in treasury 15 (6,030,647) - -
Retained
earnings 15,376,183 7,375,921 (2,290,005)
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Equity attributable
to the Company 111,992,161 110,022,546 100,356,620
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Non-controlling 1(k),
interest 13 1,777,954 498,294 14,002
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
Total Equity GBP 113,770,115 GBP 110,520,840 GBP 100,370,622
--------------------- ------ ------------ ------------ ------------ ------------ ----------- ------------
The consolidated financial statements were approved by the Board of Directors for issue on 2 August 2012.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2012 to 30 June 2012 (unaudited)
Share
Capital Shares Non-
and Share Retained held in Controlling Total
Premium Earnings Treasury Interest Equity
Notes GBP GBP GBP GBP GBP
--------------------- ------ ------------ ------------ ------------ ------------- ------------
Balance at
1 January
2012 102,646,625 (2,290,005) - 14,002 100,370,622
--------------------- ------ ------------ ------------ ------------ ------------- ------------
Total comprehensive
income for
the period - 21,419,185 - 4,285 21,423,470
Incentive
allocation 13 - (1,757,997) - 1,757,997 -
Share purchases 15 - - (6,030,647) - (6,030,647)
Dividends 11 - (1,995,000) - - (1,995,000)
Investment
by non-controlling
interest 1(b) - - - 1,670 1,670
--------------------- ------ ------------ ------------ ------------ ------------- ------------
Balance at
30 June 2012 102,646,625 15,376,183 (6,030,647) 1,777,954 113,770,115
--------------------- ------ ------------ ------------ ------------ ------------- ------------
For the period from 1 January 2011 to 31 December 2011 (audited)
Share
Capital Shares Non-
and Share Retained held in Controlling Total
Premium Earnings Treasury Interest Equity
Notes GBP GBP GBP GBP GBP
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Balance at
1 January
2011 102,646,625 16,435,000 - 1,314,848 120,396,473
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Total comprehensive
(loss) for
the period - (17,294,318) - (3,433) (17,297,751)
Incentive
allocation 13 - 1,299,313 - (1,299,313) -
Dividends 11 - (2,730,000) - - (2,730,000)
Investment
by non-controlling
interest 1(b) - - - 1,900 1,900
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Balance at
31 December
2011 102,646,625 (2,290,005) - 14,002 100,370,622
------------------------- ------ ------------ ------------- ---------- ------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2011 to 30 June
2011 (unaudited)
Share
Capital Shares Non-
and Share Retained held in Controlling Total
Premium Earnings Treasury Interest Equity
Notes GBP GBP GBP GBP GBP
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Balance at
1 January
2011 102,646,625 16,435,000 - 1,314,848 120,396,473
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Total comprehensive
(loss) for
the period - (8,090,215) - (1,618) (8,091,833)
Incentive
allocation - 816,136 - (816,136) -
Dividends - (1,785,000) - - (1,785,000)
Investment
by non-controlling
interest - - - 1,200 1,200
------------------------- ------ ------------ ------------- ---------- ------------- -------------
Balance at
30 June 2011 102,646,625 7,375,921 - 498,294 110,520,840
------------------------- ------ ------------ ------------- ---------- ------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from 1 January 2012 to 30 June 2012
1 January
2011 to
1 January
1 January 2011 to 30 31 December
2012 to June 2011 2011
30 June
2012 (unaudited) (audited) (audited)
GBP GBP GBP
---------------------------------- ------------------- ------------ -------------
Net cash flow from operating
activities (614,968) (1,547,619) (2,060,350)
---------------------------------- ------------------- ------------ -------------
Investing activities
Purchase of investments (1,510,334) (8,452,963) (11,882,903)
Purchase of contracts
for difference (2,806,028) - (2,473,360)
Proceeds from termination
of contracts for difference - 23,616 23,616
Dividend income 2,127,943 1,954,800 3,007,634
---------------------------------- ------------------- ------------ -------------
Net cash flows used
in investing activities (2,188,419) (6,474,547) (11,325,013)
---------------------------------- ------------------- ------------ -------------
Financing activities
Commitments from non-controlling
interest 1,670 1,200 1,900
Purchase of own shares
to hold in treasury (6,030,647) - -
Dividends remittance - - (2,730,000)
Net cash flows from
financing activities (6,028,977) 1,200 (2,728,100)
---------------------------------- ------------------- ------------ -------------
Net (decrease)/increase
in cash and cash equivalents (8,832,364) (8,020,966) (16,113,463)
Cash and cash equivalents
at beginning of period 28,482,761 44,596,224 44,596,224
---------------------------------- ------------------- ------------ -------------
Cash and cash equivalents
at period end 19,650,397 36,575,258 28,482,761
---------------------------------- ------------------- ------------ -------------
Cash flow from operating
activities
---------------------------------- ------------------- ------------ -------------
Total consolidated comprehensive
income / (loss) for
the period 21,423,470 (8,091,833) (17,297,751)
Dividend income (2,127,943) (1,954,800) (3,007,634)
Realised gain on investment - (23,616) (23,616)
Fair value (gain)/loss
on financial assets (20,074,680) 8,917,104 18,596,596
Decrease / (increase)
in prepaid expenses 5,749 (17,133) (23,674)
Increase / (decrease)
in amounts payable 158,436 (377,341) (304,271)
---------------------------------- ------------------- ------------ -------------
Net cash flow from operating
activities (614,968) (1,547,619) (2,060,350)
---------------------------------- ------------------- ------------ -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
1 Summary of significant accounting policies
Reporting entity
Sherborne Investors (Guernsey) A Limited (the "Company") is a closed-ended investment company with limited liability formed under The Companies (Guernsey) Law, 2008. The Company was incorporated and registered in Guernsey on 18 January 2010 and its shares were admitted to trading on the London Stock Exchange's AIM market on 9 March 2010. The Company's registered office is Ogier House, St Julian's Avenue, St Peter Port, Guernsey. The "Group" is defined as the Company and its subsidiary, SIGA, LP.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The consolidated set including the Half-Yearly Report and Consolidated Financial Statements have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".
These consolidated financial statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments and financial instruments.
There have been no material changes in accounting policies during the period.
The information for the period ended 30 June 2012 does not constitute statutory accounts as defined in section 244 of The Companies (Guernsey) Law, 2008.
Going concern
The consolidated financial statements have been prepared on the going concern basis. The Group currently holds significant cash balances. After making enquiries, and on the strength of its consolidated Statement of Financial Position, the directors are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future. The Board is therefore of the opinion that the going concern basis should be adopted in the preparation of the consolidated financial statements.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the Group's consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies at the date of the Group's consolidated financial statements and revenue and expenses during the reported period. Actual results could differ from those estimated. There are no significant estimates utilised for the preparation of the Group's consolidated financial statements as at 30 June 2012 due to the nature of the activities that have occurred in this period, together with the sole investment held by the Group being quoted on the London Stock Exchange. Fair value of financial assets held through profit or loss is therefore based on the quoted closing bid price at 30 June 2012.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
1 Summary of significant accounting policies continued
Adoption of new and revised standards
(i) Standards, amendments and interpretations effective but not relevant:
IFRS 1 (amendment), 'First-time Adoption of International Financial Reporting Standards';
(ii) Standards, amendments and interpretations in issue but not yet effective:
IFRS 9, 'Financial Instruments - classification and measurement';
IFRS 10, (amendment), 'Consolidated Financial Statements';
IFRS 11, 'Joint Arrangements';
IFRS 12, 'Disclosure of Interest of Other Entities';
IFRS 13, 'Fair Value Measurements'
The directors acknowledge these standards and are considering their impact on the financial statements.
a. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and an entity controlled by the Company (its subsidiary). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Non-controlling interests in the net assets of the consolidated subsidiary are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling entities' share of changes in equity since the date of the combination. Losses applicable to the non-controlling entities in excess of their interest in the subsidiary's equity are allocated against their interests to the extent that this would create a negative balance.
Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used into line with those used by the Group.
All intra-group transactions, balances and expenses are eliminated on consolidation.
The Company owns 99.98% of the capital interest in SIGA, LP. Whilst the general partner of SIGA, LP, Sherborne Investors (Guernsey) GP, LLC, a company registered in Delaware, USA, is responsible for directing the day to day operations of SIGA, LP, the Company, through its majority interest in SIGA, LP, has the ability to approve the proposed investment of SIGA, LP and to remove the general partner. Hence, the Company has consolidated SIGA, LP in its financial statements.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
1 Summary of significant accounting policies continued
b. Business combinations
On 4 March 2010, the Company subscribed to commit GBP100 million (one hundred million pounds) to SIGA, LP (the "Investment Partnership"), a Guernsey limited partnership.
The objective of this business combination is for the Investment Partnership to realise capital growth from investment in a selected target company identified by the Investment Manager with the aim of generating a significant capital return for Shareholders.
The acquisition of the subsidiary is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under International Financial Reporting Standard 3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds cost of the business combination, the excess is recognised immediately in profit or loss. Goodwill is reviewed for impairment annually.
The interest of non-controlling parties in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.
c. Functional currency
Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in GBP(GBP), which is the Group's functional and presentational currency.
Transactions in currencies other than GBP are translated at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are retranslated into sterling at the rate of exchange ruling at that date.
Foreign exchange differences arising on retranslation are recognised in the consolidated statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the rate of exchange at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated into GBP at foreign exchange rates ruling at the dates the fair value was determined.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
1 Summary of significant accounting policies continued
d. Financial assets at fair value through profit or loss
Investments, including equity and loan investments in associates, are designated as fair value through profit or loss in accordance with International Accounting Standard 39 ("IAS 39") "Financial Instruments: Recognition and Measurement", as the Company is an investment company whose business is investing in financial assets with a view to profiting from their total return in the form of interest and changes in fair value. Investments in votings shares and contracts for difference are initially recognised at cost. The investments in voting shares and contracts for difference are subsequently re-measured at fair value, as determined by the directors. Unrealised gains or losses arising from the revaluation of investments in voting shares and contracts for difference are taken directly to the consolidated Statement of Comprehensive Income.
Fair Value is determined as follows:
Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level I - An unadjusted quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. As required by IFRS 7, the Group will not adjust the quoted price for these investments, even in situations where it holds a large position and a sale could reasonably impact the quoted price.
Level II - Inputs are other than unadjusted quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.
Level III- Inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.
The investment held by the Group at the period end is classified as meeting the definition of Level I.
e. Revenue recognition
Dividend income is recognised when the Group's right to receive payment has been established. Tax suffered on dividend income for which no relief is available is treated as an expense.
Interest receivable from short-term deposits and investment income are recognised on an accruals basis. Where receipt of investment income is not likely until the maturity or realisation of an investment then the investment income is accounted for as an increase in the fair value of the investment.
f. Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the consolidated Statement of Comprehensive Income. SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
1 Summary of significant accounting policies continued
g. Cash and cash equivalents
Cash and cash equivalents comprises cash in hand, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the consolidated Statement of Cash Flows.
h. Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method.
i. Financial instruments
Financial instruments and financial liabilities are recognised in the Group's consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
j. Segmental reporting
As the Group invests in one investee company, there is no segregation between industry, currency or geographical location. No further disclosures have been made in conjunction with IFRS 8 Operating Segments as it is deemed not to be applicable.
k. Incentive allocation
The incentive allocation is accounted for on an accruals basis, the calculation is disclosed in Note 13. The allocation was calculated as GBPnil at 31 December 2011 and at 30 June 2012 it has been calculated as GBP1,757,997. This is a movement of GBP1,757,997 which is recognised in the Consolidated Statement of Changes in Equity on page 13.
2 Comprehensive income / (loss)
The consolidated comprehensive income / (loss) has been arrived at after charging:
1 January
1 January 1 January 2011 to 31
2012 to 30 2011 to 30 December
June 2012 June 2011 2011
GBP GBP GBP
------------------------ ------------ ------------ ------------
Directors' fees 55,000 55,202 110,202
Auditor's remuneration 19,250 19,250 40,340
------------------------ ------------ ------------ ------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
3 Tax on ordinary activities
The Company has been granted exemption from income tax in Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable to pay an annual fee (currently GBP600) under the provisions of the Ordinance. As such it will not be liable to income tax in Guernsey other than on Guernsey source income (excluding deposit interest on funds deposited with a Guernsey bank). No withholding tax is applicable to distributions to Shareholders by the Company.
The Investment Partnership will not itself be subject to taxation in Guernsey. No withholding tax is applicable to distributions to partners of the Investment Partnership.
Income which is wholly derived from the business operations conducted on behalf of the Investment Partnership with, and investments made in, persons or companies who are not resident in Guernsey will not be regarded as Guernsey source income. Such income will not therefore be liable to Guernsey tax in the hands of non-Guernsey resident limited partners.
Dividend income is shown gross of any withholding tax.
4 Gain per share
The calculation of basic and diluted gain/(loss) per share is based on the return on ordinary activities less income attributable to the Non-Controlling Interest (including the incentive allocation) and on there being 97,395,097 shares in issue, consisting of the original 105 million shares in issue less 7,604,903 treasury shares.
5 Financial assets at fair value through profit or loss
As at 31
As at 30 As at 30 December
June 2012 June 2011 2011
GBP GBP GBP
--------------------------- ----------- ------------ -------------
Opening fair value
at the beginning of
the period 72,048,100 76,288,433 76,288,433
Purchases at cost 4,316,362 8,452,963 14,356,263
Fair value adjustments 20,074,680 (8,917,104) (18,596,596)
--------------------------- ----------- ------------ -------------
Closing fair value
at the end of the period 96,439,142 75,824,292 72,048,100
--------------------------- ----------- ------------ -------------
Percentage holding
of F&C 21.41% 19.00% 20.69%
--------------------------- ----------- ------------ -------------
As at 30 June 2012, the Company holds 108,531,710 ordinary shares of F&C Asset Management plc ("F&C"), and 7,660,028 shares of F&C in total return equity swaps. This equates to an economic interest of 21.41% in F&C.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
6 Prepaid Expenses
As at 31
As at 30 As at 30 December
June 2012 June 2011 2011
GBP GBP GBP
------------------------- ----------- ----------- ----------
Prepaid directors and
officers insurance 16,401 15,472 31,628
Prepaid nominal advisor
fee - 9,615 -
Other prepaid expenses 9,478 - -
------------------------- ----------- ----------- ----------
25,879 25,087 31,628
------------------------- ----------- ----------- ----------
7 Cash and cash equivalents
Cash and cash equivalents comprises cash held by the Group and short term deposits held with Ogier Treasury (Guernsey) Limited which are invested with underlying banks. The carrying amount of these assets approximates their fair value.
8 Trade and other payables
As at 31
As at 30 As at 30 December
June 2012 June 2011 2011
GBP GBP GBP
---------------- ----------- ----------- ----------
Other payables 2,345,303 1,903,797 191,867
---------------- ----------- ----------- ----------
2,345,303 1,903,797 191,867
---------------- ----------- ----------- ----------
9 Share capital and share premium
As at 31
As at 30 As at 30 December
June 2012 June 2011 2011
Consolidated Consolidated Consolidated
------------------ ------------- ------------- -------------
Authorised share
capital No. No. No.
Ordinary Shares
of no par value Unlimited Unlimited Unlimited
------------------ ------------- ------------- -------------
Issued and fully
paid No. No. No.
Ordinary Shares
of no par value 105,000,000 105,000,000 105,000,000
------------------ ------------- ------------- -------------
As at 31
As at 30 As at 30 December
June 2012 June 2011 2011
Consolidated Consolidated Consolidated
------------------- ------------- ------------- -------------
Share premium
account GBP GBP GBP
Beginning balance 102,646,625 102,646,625 102,646,625
Ending balance 102,646,625 102,646,625 102,646,625
------------------- ------------- ------------- -------------
On 9 March 2010 the Company completed its initial public offering and its shares were admitted to trading on AIM. The share issue of 105,000,000 shares at GBP1 each raised gross cash proceeds of GBP105,000,000. Costs associated with the issue were GBP2,353,375, which are deductible against the share premium reserve. This equates to a cost of GBP0.022 per share.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
10 Net asset value per share
No. of Consolidated
Shares Pence per
Share
------------------- ------------ -------------
30 June 2012
Ordinary shares
Basic and diluted 97,395,097 114.99
30 June 2011
Ordinary shares
Basic and diluted 105,000,000 104.78
31 December 2011
Ordinary shares
Basic and diluted 105,000,000 95.58
------------------- ------------ -------------
11 Dividend
A dividend payment for the amount of GBP1,995,000 (2011: GBP2,730,000) has been declared, as of 30 June 2012.
12 Events after the balance sheet date
The interim dividend declared was paid on 18 July 2012.
Since 30 June 2012, the F&C share price has risen from 83.00 pence to 88.00 pence as at 31 July 2012. If this share price was used to value the F&C shares at 30 June 2012 it would have resulted in an increase in the closing fair value from GBP96,439,142 to GBP102,248,729.
13 Related party transactions
The Investment Partnership and its General Partner, Sherborne Investors (Guernsey) GP, LLC, have engaged Sherborne Investors Management (Guernsey) LLC to serve as Investment Manager who is responsible for identifying the Selected Target Company, subject to approval by the board of directors of the Company, as well as day to day management activities of the Investment Partnership. The Investment Manager is entitled to receive from the Investment Partnership a monthly management fee equal to one-twelfth of 1% of the net asset value of the Investment Partnership, less cash and cash equivalents and certain other adjustments.
The sole member of Sherborne Investors (Guernsey) GP, LLC is Sherborne Investors LP (the non-controlling interest), which also serves as the Special Limited Partner of the Investment Partnership. The Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to partners of the Investment Partnership, of which one is the Company, equal 110% of capital contributions to the Investment Partnership, excluding amounts contributed attributable to management fees. At the period end the accrued incentive allocation is GBP1,757,997 (2011: GBPnil). The incentive allocation is computed at 10% of the distributions to all partners in excess of 110% and increases to 20% of the distributions to all partners in excess of 150%. As this represents a potential distribution to the Special Limited Partner, a Limited Partner of SIGA, LP, any accrued allocation would be allocated to the non-controlling interest.
The Investment Manager and the Special Limited Partner are related parties due to having common majority ownership of themselves or their parent entities.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
13 Related party transactions continued
The Investment Manager and the Special Limited Partner are related parties due to having common majority ownership of themselves or their parent entities.
Each of the directors (other than the Chairman) receives a fee payable by the Company currently at a rate of GBP30,000 per annum. The Chairman of the Audit Committee receives GBP5,000 per annum in addition to such fee. The Chairman receives a fee payable by the Company currently at the rate of GBP45,000 per annum.
Individually and collectively, the Directors of the Company hold no shares of the Company as at 30 June 2012.
14 Financial risk factors
The Group's investment objective is to realise capital growth from investment in the Selected Target Company, identified by the Investment Manager with the aim of generating significant capital return for Shareholders. Consistent with that objective, the Group's financial instruments mainly comprise of an investment in a Selected Target Company. In addition, the Group holds cash and cash equivalents as well as having trade and other receivables and trade and other payables that arise directly from its operations.
Liquidity risk
The Group has yet to invest some of the funds raised from the listing of the Company, and as a result has a high level of cash and cash equivalents at the date of the consolidated Statement of Financial Position. The Group's cash and cash equivalents are placed with a range of financial institutions having utilised the services of Ogier Treasury (Guernsey) Limited.
The following table details the liquidity analysis for financial liabilities at the date of the consolidated statement of financial position:
As at 30 June 2012 Less than 1 - 3
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ---------- -------- ----------
Trade and other payables 2,263,718 81,585 2,345,303
-------------------------- ---------- -------- ----------
2,263,718 81,585 2,345,303
-------------------------- ---------- -------- ----------
As at 30 June 2011 Less than 1 - 3
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ---------- -------- ----------
Prepaid expenses 1,810,128 93,669 1,903,797
-------------------------- ---------- -------- ----------
1,810,128 93,669 1,903,797
-------------------------- ---------- -------- ----------
As at 31 December 2011 Less than 1 - 3
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ---------- -------- ----------
Trade and other payables 119,006 72,861 191,867
-------------------------- ---------- -------- ----------
119,006 72,861 191,867
-------------------------- ---------- -------- ----------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
14 Financial risk factors continued
Credit risk
The Company is exposed to credit risk in respect of its cash and cash equivalents, arising from possible default of the relevant counterparty, with a maximum exposure equal to the carrying value of those assets. The credit risk on liquid funds is limited through the Group's utilisation of Ogier Treasury (Guernsey) Limited. Ogier Treasury (Guernsey) Limited provides a service where it places cash and cash equivalents with a range of counterparty banks with high credit-ratings assigned by international credit-rating agencies. The Company monitors the placement of cash balances on an ongoing basis.
Market risk
Market price risk arises as a result of the Group's exposure to the future values of the share price of the Selected Target Company. It represents the potential loss that the Group may suffer through investing in the Selected Target Company. Given the Group's exposure to a single investment there is no way of mitigating this exposure. The Group is reliant on gaining sufficient interests in the Selected Target Company which will allow the Investment Manager to gain an element of control, including board representation. If there were to be a 10% movement in the quoted share price of the Selected Target Company at the date of the consolidated statement of financial position, this would have a positive or negative effect on the net asset value and total comprehensive income of GBP9,643,914 (2011: GBP7,204,818).
Interest rate risk
The Group is subject to risks associated with changes in interest rates in respect of interest earned on its cash and cash equivalent balances. The Group seeks to mitigate this risk by monitoring the placement of cash balances on an ongoing basis in order to maximise the interest rates obtained. This risk is also mitigated through the Company's use of Ogier Treasury (Guernsey) Limited which has negotiated varying preferential interest rates with counterparties.
As at 30 June 2012
Interest bearing
----------------------------------
Less 1 month 3 months Non-
than to to interest
1 month 3 months 1 year bearing Total
GBP GBP GBP GBP GBP
------------------- ----------- ---------- --------- ------------ ------------
Assets
Cash and cash
equivalents 19,650,397 - - - 19,650,397
Investments
held at fair
value through
profit or loss - - - 96,439,142 96,439,142
Prepaid expenses - - - 25,879 25,879
------------------- ----------- ---------- --------- ------------ ------------
Total Assets 19,650,397 - - 96,465,021 116,115,418
------------------- ----------- ---------- --------- ------------ ------------
Trade and other
payables - - - (2,345,303) (2,345,303)
------------------- ----------- ---------- --------- ------------ ------------
Total Liabilities - - - (2,345,303) (2,345,303)
------------------- ----------- ---------- --------- ------------ ------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
14 Financial risk factors continued
Interest rate risk continued
As at 30 June 2011
Interest bearing
----------------------------------
Less 1 month 3 months Non-
than to to interest
1 month 3 months 1 year bearing Total
GBP GBP GBP GBP GBP
------------------- ----------- ---------- --------- ------------ ------------
Assets
Cash and cash
equivalents 36,575,258 - - - 36,575,258
Investments
held at fair
value through
profit or loss - - - 75,824,292 75,824,292
Prepaid expenses - - - 25,087 25,087
------------------- ----------- ---------- --------- ------------ ------------
Total Assets 36,575,258 - - 75,849,379 112,424,637
------------------- ----------- ---------- --------- ------------ ------------
Trade and other
payables - - - (1,903,797) (1,903,797)
------------------- ----------- ---------- --------- ------------ ------------
Total Liabilities - - - (1,903,797) (1,903,797)
------------------- ----------- ---------- --------- ------------ ------------
As at 31 December 2011
Interest bearing
----------------------------------
Less 1 month 3 months Non-
than to to interest
1 month 3 months 1 year bearing Total
GBP GBP GBP GBP GBP
------------------- ----------- ---------- --------- ----------- ------------
Assets
Cash and cash
equivalents 28,482,761 - - - 28,482,761
Investments
held at fair
value through
profit or loss - - - 72,048,100 72,048,100
Prepaid expenses - - - 31,628 31,628
------------------- ----------- ---------- --------- ----------- ------------
Total Assets 28,482,761 - - 72,079,728 100,562,489
------------------- ----------- ---------- --------- ----------- ------------
Trade and other
payables - - - (191,867) (191,867)
------------------- ----------- ---------- --------- ----------- ------------
Total Liabilities - - - (191,867) (191,867)
------------------- ----------- ---------- --------- ----------- ------------
As at 30 June 2012, the total interest sensitivity gap for interest bearing items was GBP19,650,397 (2011: GBP28,482,761).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2012 to 30 June 2012
14 Financial risk factors continued
Interest rate risk continued
As at 30 June 2012, interest rates reported by the Bank of England were 0.5% which would equate to income of GBP98,252 per annum (2011: GBP142,414) if interest bearing assets remained constant. If interest rates were to fluctuate by 0.25%, this would have a positive or negative effect of GBP49,126 (2011: GBP71,207) on the Group's annual income.
Capital risk management
The capital structure of the Company consists of proceeds raised from the issue of Ordinary Shares.
As at 30 June 2012, the Group is not subject to any external capital requirement.
The board of directors believe that at the date of the consolidated statement of financial position there were no material risks associated with the management of the Company's capital.
15 Shares held in treasury
The Company held 7,604,903 ordinary shares purchased at an average price of 79.30 pence as at 30 June 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGGRRZLGZZM
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