TIDMSIAG
RNS Number : 9022K
Sherborne Investors (Guernsey) A
05 August 2013
5 August 2013
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
Half-Yearly Report and Consolidated Financial Statements
For the period from 1 January 2013 to 30 June 2013
CHAIRMAN'S STATEMENT
We continue to hold our investment in F&C Asset Management
plc ("F&C"). At 30 June 2013, we held an economic interest
relating to 118,910,771 ordinary shares, or 21.16% of the
outstanding shares in F&C (June 2012: 116,191,738 shares or
21.41%), through a holding of 19.80% (June 2012: 19.99%) in
ordinary shares and the balance in derivative contracts. As at 30
June 2013, our investment cost basis, net of dividends received
from F&C and gross gains realised on derivative contracts in
prior periods, was GBP68,519,739, or 57.62 pence per share (June
2012: GBP69,385,222 or 59.72 pence per share). As at the date of
this letter our economic exposure to F&C remains unchanged.
The Company's investment partnership, SIGA, LP, also continues
to hold shares in the Company. At the time of purchase, 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 2013 SIGA, LP held 7,764,903 ordinary
shares, or 7.40% of the outstanding shares in the Company (June
2012: 7,604,903 or 7.24%). 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 24 May 2013, F&C paid a dividend of 2.0 pence per share
(June 2012: 2.0 pence per share) to shareholders on the register at
5 April 2013 , of which the Company was one. The Company's Board
declared a dividend of 2.2 pence per share (June 2012: 2.2 pence
per share) which was paid on 24 July 2013 to shareholders on the
register as at 14 June 2013.
Net Asset Value
At 30 June 2013, the net asset value attributable to
shareholders of the Company was GBP113,789,353 or 117.02 pence per
share (June 2012: GBP111,992,161 or 114.99 pence per share). The
Company's net asset value was based on the closing price of 95.30
pence as at 30 June 2013 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 2013
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
DIRECTORS' REPORT
The directors present their half-yearly report on the affairs of
Sherborne Investors (Guernsey) A Limited (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 2013 to 30 June 2013.
Principal activities and investing policy
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 2013, the Investment
Partnership held an economic interest of 21.16% of the Selected
Target Company's outstanding shares, through a holding of 19.80% in
ordinary shares and the balance in derivative contracts.
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:
Number of % of issued
Ordinary share
Shareholder Shares capital
--------------------------------- ----------- ------------
Sherborne Investors GP,
LLC 27,764,903 26.44%
Aviva plc 20,983,592 19.98%
Ameriprise Financial,
Inc. 16,181,489 15.41%
Kames Capital 11,412,867 10.87%
Lloyds Banking Group plc 5,418,035 5.16%
Ritchie European Multi-Strategy
Trading, Ltd. 5,000,000 4.76%
BlackRock UK Emerging
Companies Hedge Fund 3,400,000 3.24%
--------------------------------- ----------- ------------
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
On 24 July 2013, the Company paid an interim dividend of
GBP2,310,000 (equating to 2.2 pence per share) for the year ending
31 December 2013 of which GBP170,828 was eliminated on
consolidation.
Independent Auditor
Deloitte LLP was reappointed as auditor to the Company at the
Annual General Meeting on 29 April 2013.
By order of the Board of Directors
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from 1 January 2013 to 30 June 2013
1 January 1 January 2012 1 January 2012
2013 to to to
30 June 2013 30 June 2012 31 December
2012
(unaudited) (unaudited) (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 (9,174,358) 20,074,680 42,461,738
Realised gain
on investment 1,000,665 - -
Dividend income 2,360,475 2,127,943 3,366,893
Bank interest
income 31,255 107,878 178,398
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
(5,781,963) 22,310,501 46,007,029
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
Expenses 1(f)
Professional
fees 152,105 128,998 203,803
Trading and
custodian
fees 10,768 42,775 55,437
Administrative
fees 118,149 240,087 335,691
Other fees 10,805 17,723 35,416
Management
fees 13 642,355 392,838 969,229
Directors'
fees 2 55,000 55,000 110,000
Tax services - 9,610 10,812
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
(989,182) (887,031) (1,720,388)
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
Consolidated
comprehensive
gain / (loss)
for the period (6,771,145) 21,423,470 44,286,641
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
Income/(Loss)
attributable
to:
Shareholders (6,769,908) 19,661,188 44,277,120
Non-controlling
interest (1,237) 1,762,282 9,521
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
Weighted average
number of
shares outstanding 97,235,097 101,075,376 99,177,094
Basic and
diluted gain
/ (loss) per
share (pence) 4 (6.96) 19.45 44.64
--------------------- ------ -------- ------------ --------------- ------------- -------- ------------
All revenue and expenses are derived
from continuing operations.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2013
30 June 2013 30 June 2012 31 December
(unaudited) 2012 (audited)
(unaudited)
Notes GBP GBP GBP GBP GBP GBP
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Non-current
Assets
Financial
assets at
fair value
through
profit or
loss 5 113,321,965 96,439,142 120,129,734
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
113,321,965 96,439,142 120,129,734
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Current
Assets
Trade and
other receivables 6 182,120 25,879 216,373
Cash and
cash equivalents 7 7,209,645 19,650,397 7,204,307
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
7,391,765 19,676,276 7,420,680
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Current
Liabilities
Trade and
other payables 8 (2,259,602) (2,345,303) (185,969)
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Net Current
Assets 5,132,163 17,330,973 7,234,711
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Net Assets GBP 118,454,128 GBP 113,770,115 GBP 127,364,445
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Capital and
Reserves
Called up
share capital
and share
premium 9 94,478,877 102,646,625 94,478,877
Shares held
in treasury 15 (6,206,647) (6,030,647) (6,206,647)
Retained
earnings 25,517,123 15,376,183 33,356,181
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Equity attributable
to the Company 113,789,353 111,992,161 121,628,411
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Non-controlling
interest 4,664,775 1,777,954 5,736,034
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
Total Equity GBP 118,454,128 GBP 113,770,115 GBP 127,364,445
--------------------- ------ ------------ ------------ ------------ ------------ ---------- ------------
The consolidated financial statements were approved by the Board
of Directors for issue on 2 August 2013.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2013 to 30 June 2013
(unaudited)
Share
Capital Shares Non-
and Share Retained held Controlling Total
Premium Earnings in Treasury Interest Equity
Notes GBP GBP GBP GBP GBP
---------------------- ------ ----------- ------------ ------------- ------------- ------------
Balance at
1 January 2013 94,478,877 33,356,181 (6,206,647) 5,736,034 127,364,445
---------------------- ------ ----------- ------------ ------------- ------------- ------------
Total comprehensive
loss for the
period - (6,769,908) - (1,237) (6,771,145)
Incentive allocation 13 - 1,070,022 - (1,070,022) -
Dividends 11 - (2,139,172) - - (2,139,172)
Balance at
30 June 2013 94,478,877 25,517,123 (6,206,647) 4,664,775 118,454,128
---------------------- ------ ----------- ------------ ------------- ------------- ------------
For the period from 1 January 2012 to 31 December 2012
(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 2012 102,646,625 (2,290,005) - 14,002 100,370,622
----------------------- ------ ------------ ------------ ------------ ------------- -------------
Total comprehensive
income for
the period - 44,277,120 - 9,521 44,286,641
Incentive allocation 13 - (5,710,841) - 5,710,841 -
Repurchase
of shares 15 - - (6,206,647) - (6,206,647)
Dividends 11 (8,167,748) (2,920,093) - - (11,087,841)
Investment
by non-controlling
interest 1(b) - - - 1,670 1,670
----------------------- ------ ------------ ------------ ------------ ------------- -------------
Balance at 31
December 2012 94,478,877 33,356,181 (6,206,647) 5,736,034 127,364,445
------------------------------- ------------ ------------ ------------ ------------- -------------
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
(loss) for
the period - 21,419,185 - 4,285 21,423,470
Incentive
allocation 13 - (1,757,997) - 1,757,997 -
Repurchase
of shares 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
------------------------------- ------------ ------------ ------------ ------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the period from 1 January 2013 to 30 June 2013
1 January
2012 to
1 January
1 January 2012 to 30 31 December
2013 to June 2012 2012
30 June
2013 (unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------- ------------------- ------------- -------------
Net cash flow from operating
activities (989,213) (614,968) (1,732,633)
---------------------------------- ------------------- ------------- -------------
Investing activities
Purchase of ordinary
shares (1,356,728) (1,510,334) (2,813,867)
Purchase of derivative
contracts (1,009,861) (2,806,028) (2,806,029)
Realised gain on investment 1,000,665 - -
Dividend income 2,360,475 2,127,943 3,366,893
---------------------------------- ------------------- ------------- -------------
Net cash flows from/(
used in) investing activities 994,551 (2,188,419) (2,253,003)
---------------------------------- ------------------- ------------- -------------
Financing activities
Commitments from non-controlling
interest - 1,670 1,670
Purchase of own shares
to hold in treasury - (6,030,647) (6,206,647)
Dividends remittance - - (11,087,841)
Net cash flows from
financing activities - (6,028,977) (17,292,818)
---------------------------------- ------------------- ------------- -------------
Net (decrease)/increase
in cash and cash equivalents 5,338 (8,832,364) (21,278,454)
Cash and cash equivalents
at beginning of period 7,204,307 28,482,761 28,482,761
---------------------------------- ------------------- ------------- -------------
Cash and cash equivalents
at period end 7,209,645 19,650,397 7,204,307
---------------------------------- ------------------- ------------- -------------
Cash flow from operating
activities
---------------------------------- ------------------- ------------- -------------
Total consolidated comprehensive
income / (loss) for
the period (6,771,145) 21,423,470 44,286,641
Dividend income (2,360,475) (2,127,943) (3,366,893)
Realised gain on investment (1,000,665) - -
Fair value (gain)/loss
on financial assets 9,174,358 (20,074,680) (42,461,738)
Decrease / (increase)
in trade and other receivables 34,253 5,749 (184,745)
Increase / (decrease)
in amounts payable (65,539) 158,436 (5,898)
---------------------------------- ------------------- ------------- -------------
Net cash flow from operating
activities (989,213) (614,968) (1,732,633)
---------------------------------- ------------------- ------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
For the period from 1 January 2013 to 30 June 2013
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 (together, the
"Group").
Basis of preparation
The consolidated financial statements of the Group are prepared
in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union, which comprise standards
and interpretations approved by the International Accounting
Standards Board ("IASB") and International Accounting Standards and
Standing Interpretations Committee interpretations approved by the
International Accounting Standards Committee ("IASC") that remain
in effect, together with applicable legal and regulatory
requirements of Guernsey law. 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 2013 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 2013 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. However, some uncertainty does exist over the value of
the investment in F&C as the eventual value may differ on
realisation, and this could also impact the level of incentive paid
to the Special Limited Partners. Fair value of financial assets
held through profit or loss is therefore based on the quoted
closing bid price at 30 June 2013.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
1 Summary of significant accounting policies continued
Adoption of new and revised standards
(i) Amendments early adopted by the Company
There were no standards, amendments and interpretations adopted
early by the Company
(II) Standards, amendments and interpretations effective and
relevant to the Company's operations
IAS 27, Separate financial statements (as revised in 2011)
IFRS 7, Financial instruments, disclosures - enhanced
derecognition disclosure requirements (amendments)
IFRS 10, Consolidated financial statements
IFRS 11, Joint arrangements
IFRS 12, Disclosure of interests in other entities
IFRS 13, Fair value measurement
(iii) Standards, amendments and interpretations effective but
not relevant
IAS 19, Employee benefits (revised)
IAS 28, Investments in associates and joint ventures (as revised
in 2011)
IFRS 1, Government loans (amendments)
IFRIC 20, Stripping costs in the production phase of a surface
mine
(iv) Standards, amendments and interpretations in issue but not
yet effective:
IFRS 9, 'Financial Instruments - classification and
measurement';
IAS 32 Offsetting financial assets and financial liabilities
(amendments)
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 2013 to 30 June 2013
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. This commitment
constitutes 99.98% of overall commitments to the Investment
Partnership.
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.
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 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 2013 to 30 June 2013
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 derivative contracts are initially recognised at
cost. The investments in voting shares and derivative contracts 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 derivative contracts 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 ordinary shares investment held by the Group at the year end
is classified as meeting the definition of Level I and the
investment in derivative contracts is classified as meeting the
definition of Level II.
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.
g. Trade and other receivables
Trade and other receivables are initially recongised at fair
value. A provision for impairment of trade receivables is
established when there is objective evidence the Group will not be
able to collect all amounts due according to the original terms of
the receivables.
h. 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.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
1 Summary of significant accounting policies continued
i. 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.
j. 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.
k. 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.
l. Incentive allocation
The incentive allocation is accounted for on an accruals basis,
the calculation is disclosed in note 13. The allocation as at 30
June 2013 is accounted for in the Consolidated Statement of Changes
in Equity.
m. Treasury shares
Treasury shares held by the Group are deducted from the
Company's equity and disclosed separately on the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
2 Loss/ Gain on ordinary activities
The consolidated (loss) gain on ordinary activities has been
arrived at after charging:
1 January 1 January
2013 to 1 January 2012 to
30 June 2012 to 31 December
2013 30 June 2012 2012
GBP GBP GBP
------------------------ ---------- -------------- -------------
Directors' fees 55,000 55,000 110,000
Auditor's remuneration 26,693 19,250 42,482
------------------------ ---------- -------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
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 Loss/Gain per share
The calculation of basic and diluted (loss)/gain per share is
based on the return on ordinary activities less income attributable
to the Non-Controlling Interest and on there being 97,235,097
shares in issue, consisting of the original 105 million shares in
issue less 7,764,903 treasury shares.
5 Financial assets at fair value through profit or loss
As at 31
As at 30 As at 30 December
June 2013 June 2012 2012
GBP GBP GBP
--------------------------- ------------ ----------- --------------------
Opening fair value
at the beginning of
the period 120,129,734 72,048,100 72,048,100
Purchases at cost 2,366,589 4,316,362 5,619,896
Fair value adjustments (9,174,358) 20,074,680 42,461,738
--------------------------- ------------ ----------- --------------------
Closing fair value
at the end of the period 113,321,965 96,439,142 120,129,734
--------------------------- ------------ ----------- --------------------
Percentage holding
of F&C 21.16% 21.41% 21.17%
--------------------------- ------------ ----------- --------------------
No. of shares held in F&C 118,910,771 116,191,738
117,543,771
During the period the Group terminated derivative contracts at a
realized gain of GBP1,000,665 (June 2012: nil).
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
6 Trade and other receivables
As at 31
As at 30 As at 30 December
June 2013 June 2012 2012
GBP GBP GBP
------------------------ ----------- ----------- ----------
Dividend receivable 119,280 - 150,280
Prepaid directors and
officers insurance 43,938 16,401 27,500
Other prepaid expenses 18,902 9,478 38,593
------------------------ ----------- ----------- ----------
182,120 16,401 216,373
------------------------ ----------- ----------- ----------
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 30 As at 30 As at 31
June June December
2013 2012 2012
GBP GBP GBP
------------------------ ------------------------ ------------------------ -------------------------
Dividends payable 2,139,172 1,995,000 191,867
Investments awaiting
settlement 34,342 264,757 103,797
Accrued administrative
fee 32,650 22,108 41,160
Accrued audit
fee 50,368 39,050 37,571
Other payables 3,070 24,388 3,441
------------------------ ------------------------ ------------------------ -------------------------
2,259,602 2,345,303 185,969
------------------------ ------------------------ ------------------------ -------------------------
9 Share capital and share premium
As at 31
As at 30 As at 30 December
June 2013 June 2012 2012
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.
Balance at the
beginning of the
period 97,235,097 105,000,000 105,000,000
Repurchase of
shares - (7,604,903) (7,764,903)
-------------------- ------------- ------------- -------------
Balance at the
end of the period 97,235,097 97,395,097 97,235,097
-------------------- ------------- ------------- -------------
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
9 Share capital and share premium (continued)
As at 31
As at 30 As at 30 December
June 2013 June 2012 2012
Consolidated Consolidated Consolidated
------------------- -------------------- --------------------- --------------------
Share premium
account GBP GBP GBP
Balance at the
beginning of the
period 94,478,977 102,646,625 102,646,625
Return of capital - - (8,167,748)
Ending balance 94,478,877 102,646,625 94,478,877
------------------- -------------------- --------------------- --------------------
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.
10 Net asset value per share
No. of Consolidated
Shares Pence per
Share
------------------- ----------- -------------
30 June 2013
Ordinary shares
Basic and diluted 97,235,097 117.02
30 June 2012
Ordinary shares
Basic and diluted 97,395,097 114.99
31 December 2012
Ordinary shares
Basic and diluted 97,235,097 125.09
------------------- ----------- -------------
11 Dividend
Distributions to shareholders in the amount of GBP2,139,172 have
been made in respect of the year ending 31 December 2013 as a pass
through of dividends received from F&C Asset Management
plc.
The amount distributed during the period is shown net of
distributions eliminated on consolidation. The Company paid a total
distribution of GBP2,310,000 for the year ending 31 December 2013
of which GBP170,828 was eliminated on consolidation.
12 Events after the balance sheet date
The interim dividend declared was paid on 24 July 2013.
Since 30 June 2013, the F&C share price has risen from 95.30
pence to 100.00 pence as at 31 July 2013. If this share price was
used to value the F&C shares at 30 June 2013 it would have
resulted in an increase in the closing fair value from
GBP113,321,965 to GBP118,910,771.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
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 GBP4,640,819 (June 2012:
GBP1,757,997). 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%
including any return on the shares of the Company held by SIGA LP.
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.
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 2013.
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.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
14 Financial risk factors (continued)
The following table details the liquidity analysis for financial
liabilities at the date of the consolidated statement of financial
position:
As at 30 June 2013 Less than 1 - 3
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ---------- -------- ----------
Trade and other payables 2,173,514 86,088 2,259,602
-------------------------- ---------- -------- ----------
2,173,514 86,088 2,259,602
-------------------------- ---------- -------- ----------
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 31 December 2012 Less than 1 - 3
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ---------- -------- ----------
Trade and other payables 148,398 37,571 185,969
-------------------------- ---------- -------- ----------
148,398 37,571 185,969
-------------------------- ---------- -------- ----------
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 Services Limited. Ogier
Treasury Services 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. As
funds are held by Ogier Treasury Services Limited in segregated
bank accounts, the credit risk lies with the individual banks. 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
GBP11,332,196 (2012: GBP9,643,914).
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 Services
Limited which has negotiated varying preferential interest rates
with counterparties.
SHERBORNE INVESTORS (GUERNSEY) A LIMITED
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the period from 1 January 2013 to 30 June 2013
14 Financial risk factors continued
Interest rate risk continued
As at 30 June 2013
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 7,209,645 - - - 7,209,645
Investments
held at fair
value through
profit or loss - - - 113,321,965 113,321,965
Trade and other
receivables - - - 182,120 182,120
-------------------- ---------- ----- ---- ------------ ------------
Total Assets 7,209,645 - - 113,504,085 120,713,730
-------------------- ---------- ----- ---- ------------ ------------
Trade and other
payables - - - (2,259,602) (2,259,602)
-------------------- ---------- ----- ---- ------------ ------------
Total Liabilities - - - (2,259,602) (2,259,602)
-------------------- ---------- ----- ---- ------------ ------------
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
Trade and other
receivables - - - 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 2013 to 30 June 2013
14 Financial risk factors continued
Interest rate risk continued
As at 31 December 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 7,204,307 - - - 7,204,307
Investments
held at fair
value through
profit or loss - - - 120,129,734 120,129,734
Trade and other
receivables - - - 216,373 216,373
------------------- ---------- ---------- --------- ------------ ------------
Total Assets 7,204,307 - - 120,346,107 127,550,414
------------------- ---------- ---------- --------- ------------ ------------
Trade and other
payables - - - (185,969) (185,969)
------------------- ---------- ---------- --------- ------------ ------------
Total Liabilities - - - (185,969) (185,969)
------------------- ---------- ---------- --------- ------------ ------------
As at 30 June 2013, the total interest sensitivity gap for
interest bearing items was GBP7,239,550 (June 2012:
GBP19,650,397).
As at 30 June 2013, interest rates reported by the Bank of
England were 0.5% which would equate to income of GBP36,198 per
annum (June 2012: GBP98,252) if interest bearing assets remained
constant. If interest rates were to fluctuate by 0.25%, this would
have a positive or negative effect of GBP18,099 (June 2012:
GBP49,126) 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 2013, 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 has 7,764,903 ordinary shares held in treasury
carried at a cost of GBP6,606,647 at 30 June 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMGGRVDVGFZM
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