WEISS KOREA OPPORTUNITY FUND LTD.
LEI 213800GXKGJVWN3BF511
(Classified Regulated Information, under DTR 6 Annex 1 section
1.2)
The following replaces the RNS 'Half
Year Report' announcement released on 9 September 2019 at
15:49.
The statement in the Chairman’s Review: “We are pleased to
provide the 2019 Half Yearly Financial Report on the Company.
During the period from 31 December
2018 to 30 June 2019 (the
“Period”), the Company’s net asset value increased by
10.82%,[1] outperforming the reference MSCI Korea 25/50
Net Total Return Index (the “Korea Index”), which decreased 1.38%
in pounds sterling. [2]” should read: “We are pleased to
provide the 2019 Half Yearly Financial Report on the Company.
During the period from 31 December
2018 to 30 June 2019 (the
“Period”), the Company’s net asset value increased by
10.82%,[1] outperforming the reference MSCI Korea 25/50
Net Total Return Index (the “Korea Index”), which increased 2.59%*
in pounds sterling. [2]”
The change has been marked with an asterisk. All other
information remains unchanged. The correct version of the
announcement is below:
HALF-YEARLY FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 2019
Weiss Korea Opportunity Fund Ltd. (the “Company”) has today,
released its Half-Yearly Financial Report for the period ended
30 June 2019. The Report will shortly
be available for inspection via the
Company's website www.weisskoreaopportunityfund.com.
For further information, please contact:
N+1 Singer
James Maxwell – Nominated Adviser
James Waterlow – Sales |
+44 20 7496 3000 |
Northern Trust International Fund Administration
Services (Guernsey) Limited
Samuel Walden |
+44 1481 745385 |
Summary Information
The Company
Weiss Korea Opportunity Fund Ltd. (“WKOF” or the “Company”) was
incorporated with limited liability in Guernsey, as a closed-ended
investment company on 12 April 2013.
The Company’s Shares were admitted to trading on the Alternative
Investment Market (“AIM”) of the London Stock Exchange (the “LSE”)
on 14 May 2013.
The Company is managed by Weiss Asset Management LP (the
“Investment Manager”), a Boston-based investment management company
registered with the Securities and Exchange Commission in
the United States of America.
Investment Objective and Dividend
Policy
The Company's investment objective is to provide Shareholders
with an attractive return on their investment, predominantly
through long-term capital appreciation. The Company is
geographically focussed on South Korean companies. Specifically,
the Company invests primarily in listed preferred shares issued by
companies incorporated in South
Korea, which in many cases trade at a discount to the
corresponding common shares of the same companies. Since the
Company's Admission to AIM, the Investment Manager has assembled a
portfolio of South Korean preferred shares that it believes are
undervalued and could appreciate based on the criteria that it
selects. The Company may, in accordance with its investment policy,
also invest some portion of its assets in other securities,
including exchange-traded funds, futures contracts, options, swaps
and derivatives related to Korean equities, and cash and cash
equivalents. The Company does not have any concentration
limits.
The Company intends to return to Shareholders all dividends
received, net of withholding tax, on an annual basis.
Investment Policy
The Company is geographically focused on South Korean companies.
Some of the considerations that affect the Investment Manager’s
choice of securities to buy and sell may include the discount at
which a preferred share is trading relative to its respective
common share, its dividend yield, its liquidity, and the weighting
of its common share (if any) in the MSCI Korea 25/50 Net Total
Return Index (the “Korea Index”), among other factors. Not all of
these factors will necessarily be satisfied for particular
investments. The Investment Manager does not generally make
decisions based on corporate fundamentals or its view of the
commercial prospects of an issuer. Preferred shares are selected by
the Investment Manager at its sole discretion, subject to the
overall control of the board of directors of the Company (the
“Board”).
The Company purchased certain credit default swaps on the
sovereign debt of South Korea and
put options on iShares MSCI South Korea as general market and
portfolio hedges, but generally did not hedge its exposure to
interest rates or foreign currencies during the period ended
30 June 2019 (2018: Nil). Please see
additional information about the nature of these hedges in the
Investment Manager’s Report.
Realisation Opportunity
In accordance with the Company’s Articles of Association and its
Admission Document, the Company offers all Shareholders the right
to elect to realise some or all of the value of their Ordinary
Shares (the “Realisation Opportunity”), less applicable costs and
expenses, on or prior to the fourth anniversary of Company’s
admission to AIM and, unless it has already been determined that
the Company be wound-up, every two years thereafter, the most
recent being 15 May 2019 (the “Realisation Date”).
On 20 March 2019, the Company
announced that pursuant to the Realisation Opportunity,
Shareholders who were on the register as at the record date could
elect, during the Election Period, to redesignate all or part of
their Ordinary Shares as Realisation Shares. The Election Period
commenced on 15 April 2019 and closed
on 8 May 2019. Elections were received from shareholders
totalling of 2,747,153 Ordinary Shares, representing 3.3 per cent
of the Company’s issued share capital.
Following the Realisation Date, the Ordinary Shares held by the
Shareholders who elected for Realisation were redesignated as
Realisation Shares and the Portfolio was split into two separate
and distinct Pools, namely the Continuation Pool (comprising the
assets attributable to the continuing Ordinary Shares) and the
Realisation Pool (comprising the assets attributable to the
Realisation Shares).
Shareholder Information
Northern Trust International Fund Administration Services
(Guernsey) Limited (the “Administrator”) is responsible for
calculating the Net Asset Value (“NAV”) per Share of the Company.
The unaudited NAV per Ordinary Share is calculated on a weekly
basis and at the month end by the Administrator, and is announced
by a Regulatory News Service and is available through the Company’s
website www.weisskoreaopportunityfund.com.
Company financial highlights and
performance summary for the period ended 30
June 2019
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As
at |
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As
at |
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|
|
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30
June 2019 |
|
31
December 2018 |
|
|
|
|
|
£ |
|
£ |
Total Net Assets |
|
|
|
|
129,777,368 |
|
126,489,595 |
NAV per share |
|
|
|
|
1.5901 |
|
1.4993 |
Basic and
diluted earnings/(loss) per share |
|
|
0.1281 |
|
(0.3780) |
Mid-Market Share
price |
|
|
|
|
1.59 |
|
1.47 |
Premium/(discount) to
NAV |
|
|
|
|
- |
|
(2.0%) |
As at close of business on 6 September
2019, the latest published NAV per Share had decreased to
£1.4368 (as at 3 September 2019) and the Share price stood at
£1.45.
Total expense ratio
The annualised total expense ratio for the period ended
30 June 2019 was 1.82%
(31 December 2018: 1.89%). The annualised total expense
ratio includes charges paid to the Investment Manager and other
expenses divided by the average NAV for the period.
Chairman’s
Review
We are pleased to provide the 2019 Half Yearly Financial Report
on the Company. During the period from 31
December 2018 to 30 June 2019
(the “Period”), the Company’s net asset value increased by
10.82%,[1] outperforming the reference MSCI Korea 25/50 Net Total
Return Index (the “Korea Index”), which increased 2.59% in pounds
sterling.[2] Since the admission of the Company to AIM in
May 2013, the net asset value has
increased by 80.21% including reinvested dividends, or 78.55%
without dividend reinvestment,[2] compared to the Korea Index
returns of 42.00%.[3]
A report from the Investment Manager follows.
As described in the circular to Shareholders published on
20 March 2019, the Company made
available its second Realisation Opportunity enabling Shareholders
to elect to realise all, or a part, of their shareholding.
Realisation opportunities are now scheduled to occur every two
years on or about the anniversary of the Company’s listing. We are
pleased to offer this feature to our investors, and proud to note
that it has been copied elsewhere in the market as a model of good
corporate governance.
On 8 May 2019, the Election Period
for the Realisation Opportunity closed; valid elections were
received from Shareholders totalling 2,747,153 Ordinary Shares,
representing approximately 3.3 per cent. of the Company’s issued
share capital. On 15 May 2019, these
electing Ordinary Shares were redesignated as Realisation Shares,
and on 18 June 2019 a full cash
redemption was paid out to holders of Realisation Shares, and the
shares were cancelled.
None of the Directors and personnel associated with the
Investment Manager participated in the Realisation Opportunity in
respect of all, or any part of, their respective shareholdings.
Indeed, certain personnel associated with the Investment Manager
acquired additional shares during the Period.
Due to the rather small number of shares electing for
Realisation, the Company was able to effect the Realisation
relatively quickly. Shareholders should not necessarily expect a
similar timetable in future Realisation Opportunities. If in a
future Realisation Opportunity, the Realisation Pool is of
significant size, it is likely that a full cash distribution would
take considerable time.
The Directors declared a dividend of 4.1195 pence Sterling per share, Ex-Dividend Date
9 May 2019, Record Date 10 May 2019, to distribute the income received by
the Company in respect of the year ended 31 December 2018.[4] This
dividend was paid to all Shareholders on 31
May 2019 regardless of any election made under the
Realisation Opportunity.
In addition to the Realisation Opportunity, the Company has an
active share repurchase program as part of its discount management
strategy. The Board is authorised to repurchase up to 40% of the
Company's outstanding Ordinary Shares in issue as at 25 July 2019 (on which date the Company had
81,617,828 Ordinary Shares in issue). As the Company traded at a
narrow discount or premium to net asset value during the first half
of 2019, there were no share repurchases during the Period.
Since Admission almost six years ago, and as at the date of this
document, the Company has repurchased, at a discount to NAV,
12,590,250 Ordinary Shares of the original 105,000,000 Ordinary
Shares issued at Admission. The Board also has in place standing
instructions with the Company’s broker, N+1 Singer Advisory LLP,
for the repurchase of the Company’s Shares during closed periods
when the Board is not permitted to give individual instructions;
such closed periods typically occur around the preparation of the
Annual and Half-Yearly Financial Reports. The Board intends to
continue to aggressively repurchase Shares if the Company’s
discount is greater than 5% of the Company’s net asset value. We
will continue to keep Shareholders informed of any share
repurchases through public announcements.
As discussed in previous communications, the Company has
purchased certain derivatives as general market hedges. Please see
additional information about the nature of these hedges in the
Investment Manager’s Report within.
If you would like to speak with the Investment Manager or learn
about potential opportunities to meet with them, please contact the
Company’s broker, N+1 Singer. I would like to thank Shareholders
for their support and look forward to the continued success of the
Company in the future.
Norman
Crighton
Chairman
9 September 2019
[[1]] This return includes the annual cash dividend paid to the
Company’s Shareholders but does not assume such dividends are
reinvested.
[2] This return includes all dividends paid to the Company’s
Shareholders and assumes that these dividends were reinvested in
WKOF shares at the next date for which the Company reports a NAV,
at the NAV for that date.
[3] MSCI total return indices are calculated as if any dividends
paid by constituents are reinvested at their respective closing
prices on the ex-date of the distribution.
[4] The Ex-Date for this dividend was 9
May 2019, and Payment Date was 31 May
2019.
Investment Manager’s Report
For the period ended 30 June 2019
In the first half of 2019, NAV of WKOF was up 10.82 per cent,
outperforming the reference MSCI Korea 25/50 Net Total Return
Index, which was down 1.38 per cent in pounds sterling. From its
inception in May 2013, WKOF has
significantly outperformed the Korean market. The total return to
an investor in WKOF since inception was 80.21 per cent including
reinvested dividends,[5] or 78.55 per cent without dividend
reinvestment, compared to returns of 42.00 per cent for the Korea
Index over the same period.
In the past, we have repeatedly noted that we do not expect our
investment thesis in Korean preference shares to play out
overnight, and that investors should expect periods of poor
performance. Nevertheless, the strong performance in the
first half of 2019 was welcome after a very disappointing 2018 for
both the South Korean market in general and Korean Preference
Shares in particular.
The outperformance during the Period was due to several factors.
The largest contributor was that the Company generally had more
favourable weightings to positive and negative performing names
than the Index. In other words, a portfolio holding the respective
ordinary shares of the companies whose preference shares WKOF owns
would have performed well relative to the Index. The other major
contributor to the Fund’s outperformance was a moderate narrowing
of preferred share discounts.
While we continue to believe that preferred shares discounts
will narrow over the long term, we would not expect to see such
strong stock performance due to company selection as we saw in the
first half of the year. Our focus on preference shares means that
we generally have little exposure to companies unless they have
issued preference shares.[6] Within this subset of the Korean
market, when constructing the portfolio weightings, major
considerations include preference share discount and liquidity, as
well as dividend yield. We do not believe any of these are strongly
indicative of ordinary share performance.
Update on Portfolio Allocation
As described in the 2018 year-end report, we plan to rebalance
the Company’s portfolio, over time, toward larger discount Korean
preference shares. In the first half of 2019 we began this rotation
primarily through the gradual selling of the Company’s holdings of
Samsung Electronics (“Samsung”) preference shares. The Company
reduced exposure to Samsung from approximately 25% on 31 March 2019 to 21% at 30
June 2019. The Company intends to continue using liquidity
provided from portfolio sales (mainly ETF holdings and Samsung) to
continue purchasing wider discount, less liquid, names as market
volumes allow. As we rebalance toward preference shares trading at
wider discounts, absent a general narrowing of discounts, we would
generally anticipate that the portfolio’s weighted average discount
will widen.
Update on Dividends
Following the 2018/2019 annual general meeting and dividend
announcement season, we are pleased to observe that dividend yield
for the KOSPI 200 reached 2% for the first time since 2005. Korean
listed companies paid approximately 30.5
trillion KRW (approximately 20.8
billion GBP) of dividends in FY 2018, a roughly 15% increase
from previous year and the highest amount in history. According to
the Korea Corporate Governance Service, the number of shareholder
proposals in annual general meetings for a higher dividend payout
has been increasing in each of the last two years, with 31 such
proposals in 2016, 66 in 2017, and 92 in 2018. The renewed focus on
dividends is generally a positive catalyst for the portfolio. Not
only are Korean preferred share discounts generally inversely
correlated with common share dividend yields, increased shareholder
payouts generally have a positive effect on the common share stock
price as well.
Update on South Korean Corporate
Governance
NPS Activity
The first half of 2019 was an eventful period for corporate
governance updates in Korea. We are pleased to see increased
corporate engagement from the National Pension Service (“NPS”) in
multiple areas, as well as additional forays by activist investors.
We observed the following noteworthy activity during the
period:
LG Electronics Inc (“LGE”) nearly doubled its dividend payout,
declaring an annual dividend per share of 750 KRW (approximately 0.5
GBP), an 87% increase over 2017. LGE is one of the companies
NPS has been asking to increase its dividend payout ratio, and the
market generally believes the increase was in part due to pressure
from the pension fund. While the total yield for the company’s
common shares is still low at 1%, the dividend increase had a
disproportional effect on preferred share yields (now at 2.7%)
since LGE preferred shares are trading at a 60% discount to common
shares.
NPS also pressured Namyang Dairy Products Co Ltd (“Namyang”), to
install a dividend committee, after pushing the company to increase
its dividend payout ratio. The proposed dividend committee would
operate independently of Namyang’s Board and would advise the Board
on dividend policies. Although Namyang declined both
proposals, it demonstrates that NPS is acting on the tenets set out
in the Stewardship Code.
In the proxy battle between Hyundai Motor Co (“Hyundai”) and
Elliott Associates (“Elliott”), at the Hyundai annual general
meeting NPS voted in favor of all of Hyundai’s proposals and
against Elliott’s proposal for a large one-off special dividend.
This decision was not unexpected, as both major proxy advisory
firms ISS and Glass Lewis, also recommended voting against
Elliott.
Activist Activity
A group of activist investors led by Dalton Investments and
supported by Brandes Investment Partners, Korea Corporate
Governance Improvement Fund (“KCGI”), Ruane, Cunniff &
Goldfarb, and Value Partners submitted letters to the NPS and
Korean government to propose ways to reduce the “Korean discount”
on listed stocks. Some of their proposals included:
- Focus on dividend payout ratios that match global
standards;
- Exercise shareholder rights;
- Focus on capital allocation;
- Reduce tax rates on dividends;
- Various other corporate governance initiatives.
The above-mentioned activist group also submitted proposals to
Hyundai Home Shopping Network Co, asking for increased dividends or
buyback/cancellations.
KCGI launched a proxy battle against Hanjin KAL Corp (“Hanjin”)
to ask Hanjin to divest from its unprofitable hotel business and
pay off its debt to reduce its debt burden. KCGI is the second
largest holder of Hanjin (10.81%).
The increased number of activist investor public engagements
with Korean companies reinforces our view that corporate governance
in Korea continues to improve over time. We reiterate our belief
that long run improved corporate governance will not only lead to
the narrowing of the discount of securities in the portfolio, but
also add value to the common shares underlying the portfolio’s
preferred shares. At the same time, we don’t expect drastic changes
to corporate governance overnight, and we anticipate short term
setbacks, as seen in cases where NPS and proxy advisors vote
against large cash payouts for Korean companies.
Korean Air Lines
The recently ousted former chairman of Korean Air Lines Co Ltd
(“KAL”) Cho Yang-Ho died in early
April due to illness, only days after his removal from the board of
KAL (the NPS and institutional shareholders had voted against his
re-election). Cho and the controlling family had been considered
one of the worst chaebol groups in Korea. There was a history of
illicit activities and abuse of power. Cho himself had been on
trial over charges of embezzlement and breach of trust.
The news of his death was followed by significant rallies for
both the common and preferred shares of KAL and KAL related
entities, with the market speculating about possible succession
plans and corporate governance improvements. In our opinion, the
two important takeaways from this event are:
- Succession events in Korean chaebols have the potential to be
positive catalysts. In both the cases of Samsung and KAL, the
transfer of ownership stakes from founders to their heirs led to
increases in the common stock price and narrowing of preferred
share discounts. This effect may be more pronounced with companies
that have had historically poor corporate governance. The changing
of ownership can lead to various positive outcomes, such as
concessions given to minority shareholders or a split and sale of
the company if there is a succession battle.
- We previously targeted 0% discount as the most bullish outcome
for our Korean preferred share portfolio. However, after the demise
of the former chairman of KAL, we saw preferred shares of Hanjin
KAL, a 1.6 billion USD market cap
company, trade from a 36% discount pre-news to an 80% premium
post-news! Unless presented with a compelling reason, we would
generally not hold preferred shares trading at a premium; however,
when modelling potential scenarios, we should not reject the
potential for premiums higher than 0%.
Hedging Update
WKOF pursues its investment strategy with a portfolio that is
generally long only. However, as described more fully in the 2018
year-end report, because of political tensions in Northeast Asia, the Board approved a hedging
strategy in September 2017. The
purpose of the hedging strategy is to reduce exposure to extreme
events that would be catastrophic to WKOF. Importantly, the Company
has limited its use of hedging instruments to purchases of credit
default swaps and put options: securities that we believe would
generate high returns in an economic disaster, without introducing
new risks into the portfolio or exacerbating existing risks. These
catastrophe hedges are not intended to make money. We expect that
the Company’s hedges will lose money most of the time—as with any
insurance policy.
Following year-end, the Company sold all the previously held EWY
put options in January and purchased new put options in March. The
table below provides updated details about the hedges as of 28 June
2019. Note that outside of the general market and portfolio
hedges described herein, WKOF has generally not hedged its exposure
to interest rates or currencies.
(Please note the use of U.S. dollar in the tables below)
Number of Option Contracts Held on EWY |
Strike Price |
Total Cost to Expiration (USD) |
Purchase Date |
Expiration Date |
4,000 |
$52 |
$416,163 |
March 2019 |
October 2019 |
Total |
|
$416,163 |
|
|
Credit Default Swaps on South Korean Sovereign Debt |
Notional Value |
Total
Cost to Expiration (USD) |
Annual Cost (USD) |
Price
Paid as % of Notional Value (per Annum) |
Expiration Date |
Duration (Years) |
|
5 yr CDS |
$20m |
$457,151 |
$91,430 |
45 bps |
2023 |
5.0 |
|
2 yr CDS |
$80m |
$382,619 |
$191,309 |
24 bps |
2020 |
2.0 |
|
Total |
|
$839,770 |
$282,739 |
|
|
|
|
Please see the Notes to the Financial Statements for more
detailed information. Specifically, Note 9 for the net change in
fair value of derivative financial instruments and the composition
of options and credit default swaps held as of 30 June 2019.
Concluding thoughts
The Manager continues to believe that an analytically focused
and disciplined investment approach in Korea will generate
attractive long-term returns for investors. It is puzzling to us
that large inefficiencies and dislocations in the Korean preference
shares space remain in a yield compression environment. These
dislocations persist in the face of positive catalysts, growing
dividends, and cannot be explained away by typical financial
factors. Regardless, we are happy to stay under the radar and
traverse in less crowded opportunities. At a weighted average
discount of 43% to common shares, we believe that the Korean
preference shares in the WKOF portfolio remain a compelling
opportunity.
Weiss Asset Management LP
9 September 2019
[5] This return includes all dividends paid to the Company’s
Shareholders and assumes that these dividends were reinvested in
WKOF shares at the next date for which the Company reports a NAV,
at the NAV for that date.
[6] The common exception to this general statement is that the
Fund often has a small exposure to the broader South Korean market
through index securities held as a cash substitute.
Directors
The Company has three non-executive Directors, all of whom are
considered independent of the Investment Manager and details are
set out below.
Norman
Crighton (aged 53)
Mr Crighton is Chairman of the Company. He is also a
non-executive chairman of RM Secured Direct Lending plc and AVI
Japan Opportunity Trust. Norman was, until May 2011, an investment manager at Metage Capital
Limited where he was responsible for the management of a portfolio
of closed-ended funds and has almost three decades of experience in
closed-ended funds having led teams at Olliff and Partners, LCF
Edmond de Rothschild, Merrill Lynch, Jefferies International
Limited and latterly Metage Capital Limited. His experience covers
analysis and research as well as sales and corporate finance.
Norman is British and resident in the United Kingdom. Norman was appointed to the
Board in 2013.
Stephen
Charles Coe (aged 53)
Stephen is Chairman of the Audit Committee. He is also a
director (and Chairman of the Audit Committee) of Leaf Clean Energy
Company and Merian Chrysalis Investment Company. He has been
involved with offshore investment funds and managers since 1990
with significant exposure to property, debt, emerging markets, and
private equity investments.
He qualified as a Chartered Accountant with Price Waterhouse
Bristol in 1990 and remained in audit practice, specialising in
financial services, until 1997. From 1997 to 2003 he was a director
of the Bachmann Group of fiduciary companies and Managing Director
of Bachmann Fund Administration Limited, a specialist third party
fund administration company. From 2003 to 2006 Stephen was a
director with Investec in Guernsey and Managing Director of
Investec Trust (Guernsey) Limited and Investec Administration
Services Limited. He became self-employed in August 2006 providing services to financial
services clients. Stephen is British and resident in Guernsey.
Stephen was appointed to the Board in 2013.
Robert Paul
King (aged 56)
Rob is a non-executive director for a number of open and
closed-ended investment funds including Tufton Oceanic Assets
Limited (chairman), Chenavari Capital Solutions Limited (chairman),
and CIP Merchant Capital Limited. Before becoming an independent
non-executive director in 2011, he was a director of Cannon Asset
Management Limited and their associated companies. Prior to this he
was a director of Northern Trust International Fund Administration
Services (Guernsey) Limited (formerly Guernsey International Fund
Managers Limited) where he had worked from 1990 to 2007. He has
been in the offshore finance industry since 1986 specialising in
administration and structuring of offshore open and closed-ended
investment funds. Rob is British and resident in Guernsey. Rob was
appointed to the Board in 2013.
Directors’ Responsibility
Statement
The Directors are responsible for preparing the Unaudited
Half-Yearly Financial Report (the “Condensed Financial
Statements”), which have not been audited by an independent
auditor, and confirm that to the best of their knowledge:
- these Condensed Financial Statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) and in accordance with International Accounting Standard
34 “Interim Financial Reporting” issued by the European Union and
the AIM Rules of the LSE;
- these Condensed Financial Statements include a fair review of
important events that have occurred during the period and their
impact on the Condensed Financial Statements, together with a
description of the principal risks and uncertainties of the Company
for the remaining six months of the financial period as detailed in
the Investment Manager’s Report; and
- these Condensed Financial Statements include a fair review of
related party transactions that have taken place during the six
month period which have had a material effect on the financial
position or performance of the Company, together with disclosure of
any changes in related party transactions in the last Annual Report
and Audited Financial Statements which have had a material effect
on the financial position of the Company in the current
period.
The Directors confirm that the Condensed Financial Statements
comply with the above requirements.
On behalf of the Board,
Norman Crighton
Stephen Coe
Chairman
Director
9 September 2019
Condensed Statement of Financial
Position
|
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|
As
at |
|
As
at |
|
|
|
|
|
|
30
June |
|
31
December |
|
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
Notes |
£ |
|
£ |
Assets |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
Financial
assets at fair value through profit or loss |
|
8 |
123,759,126 |
|
120,312,836 |
Derivative
financial assets |
|
|
9 |
148,037 |
|
1,706,418 |
Other
receivables |
|
|
|
|
343,645 |
|
2,636,504 |
Cash and
cash equivalents |
|
|
|
4,990,595 |
|
1,304,537 |
Margin
account |
|
|
|
|
1,888,258 |
|
2,252,688 |
Due from
broker |
|
|
|
|
4,731 |
|
- |
Total
assets |
|
|
|
|
131,134,392 |
|
128,212,983 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Derivative
financial liabilities |
|
|
9 |
1,018,215 |
|
1,209,227 |
Due to
broker |
|
|
|
|
36,177 |
|
- |
Other
payables |
|
|
|
|
302,632 |
|
514,161 |
Total
liabilities |
|
|
|
|
1,357,024 |
|
1,723,388 |
Net assets |
|
|
|
|
|
129,777,368 |
|
126,489,595 |
|
|
|
|
|
|
|
|
|
Represented by: |
|
|
|
|
|
|
|
Shareholders' equity and reserves |
|
|
|
|
|
|
Share
capital |
|
|
|
10 |
68,124,035 |
|
72,080,642 |
Other
reserves |
|
|
|
|
61,653,333 |
|
54,408,953 |
Total
shareholders' equity |
|
|
|
129,777,368 |
|
126,489,595 |
Net
assets per share |
|
|
|
7 |
1.5901 |
|
1.4993 |
The notes form an integral part of these Condensed Financial
Statements.
The Condensed Financial Statements were approved and authorised
for issue by the Board of Directors on 9
September 2019.
Norman
Crighton
Stephen Coe
Chairman
Director
Condensed Statement of Comprehensive
Income
|
|
|
|
For
the period ended |
For
the period ended |
|
|
|
|
30
June 2019 |
30
June 2018 |
|
|
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Notes |
£ |
£ |
Income |
|
|
|
|
Net
changes in fair value of financial assets
at fair value through profit or loss
through profit or loss |
|
11,651,316 |
(16,778,589) |
Net
changes in fair value of derivative financial
instruments through profit or loss |
|
206,014 |
(225,514) |
Net
foreign currency losses |
(137,822) |
(9,616) |
Other
income |
|
|
711,676 |
786,498 |
Total
income/(loss) |
|
12,431,184 |
(16,227,221) |
|
|
|
|
|
|
Expenses |
|
|
|
|
Operating
expenses |
|
(1,554,650) |
(1,785,536) |
Total
operating expenses |
(1,554,650) |
(1,785,536) |
|
|
|
|
|
|
Profit/(loss) for the period before tax |
10,876,534 |
(18,012,757) |
Withholding tax |
3 |
(156,739) |
(176,623) |
|
|
|
|
|
|
Profit/(loss) for
the period after tax |
|
|
|
10,719,795 |
(18,189,380) |
Profit/(loss) and
total comprehensive income for the period |
|
|
|
10,719,795 |
(18,189,380) |
Basic
and diluted earnings/(loss) per Share |
6 |
0.1281 |
(0.2156) |
All items derive from continuing activities.
The notes form an integral part of these Condensed Financial
Statements.
Condensed Statement
of Changes in Equity
For the
period ended 30 June 2019 (Unaudited) |
|
|
|
|
|
|
|
|
|
Share |
Other |
|
|
|
|
|
capital |
reserves |
Total |
|
|
|
Notes |
£ |
£ |
£ |
Balance at 1
January 2019 |
|
|
|
72,080,642 |
54,408,953 |
126,489,595 |
Total
comprehensive income for the period |
|
|
- |
10,719,795 |
10,719,795 |
Transactions with Shareholders, recorded directly in
equity |
|
|
|
|
|
Redemption of
Realisation Shares |
|
|
10 |
(3,956,607) |
- |
(3,956,607) |
Distributions
paid |
|
|
4 |
- |
(3,475,415) |
(3,475,415) |
Balance at 30 June
2019 |
|
|
|
68,124,035 |
61,653,333 |
129,777,368 |
|
|
|
|
|
|
|
For the
period ended 30 June 2018 (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1
January 2018 |
|
|
|
72,080,642 |
89,183,638 |
161,264,280 |
Total
comprehensive loss for the period |
|
|
- |
(18,189,380) |
(18,189,380) |
Transactions with Shareholders, recorded directly in
equity |
|
|
|
|
|
Distributions
paid |
|
|
4 |
- |
(2,881,486) |
(2,881,486) |
Balance at 30 June
2018 |
|
|
|
72,080,642 |
68,112,772 |
140,193,414 |
The notes form an integral part of these Condensed Financial
Statements.
Condensed Statement
of Cash Flows
|
|
For
the period ended |
|
For
the period ended |
|
|
30
June 2019 |
|
30
June 2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
Notes |
£ |
|
£ |
Cash flows from
operating activities |
|
|
|
|
Profit/(loss) for the
period |
|
10,719,795 |
|
(18,189,380) |
|
|
|
|
|
Adjustments for: |
|
|
|
|
Net change in fair
value of financial assets held at fair value through profit or
loss |
|
(11,651,318) |
|
16,778,589 |
Net change in fair
value of derivative financial instruments held at fair value
through profit or loss |
|
(206,014) |
|
225,514 |
Net change in NAV of
Realisation Shares |
|
(41,089) |
|
- |
Decrease in
debtors |
|
2,292,859 |
|
2,522,762 |
Decrease in
creditors |
|
(211,529) |
|
(184,830) |
Net cash generated
from operating activities |
|
902,704 |
|
1,152,655 |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase of financial
assets at fair value through profit or loss |
8 |
(2,085,317) |
|
(22,628,701) |
Open of derivative
financial instruments |
9 |
(310,732) |
|
(967,526) |
Proceeds from the sale
of financial assets at fair value through profit or loss |
8 |
10,321,790 |
|
23,528,114 |
Closure of derivative
financial instruments |
9 |
1,884,115 |
|
122,665 |
Decrease in margin
account |
|
364,430 |
|
880,614 |
Net cash generated
from investing activities |
|
10,174,286 |
|
935,166 |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Redemption of
Realisation Shares |
10 |
(3,915,517) |
|
- |
Distributions
paid |
4 |
(3,475,415) |
|
- |
Net cash used in
financing activities |
|
(7,390,932) |
|
- |
|
|
|
|
|
Net increase in
cash and cash equivalents |
|
3,686,058 |
|
2,087,821 |
Cash and cash
equivalents at the beginning of the period |
|
1,304,537 |
|
3,429,302 |
Cash and cash
equivalents at the end of the period |
|
4,990,595 |
|
5,517,123 |
The notes form an integral part of these Condensed Financial
Statements.
Notes to the
Unaudited Condensed Financial Statements
1. General information
The Company was incorporated with limited liability in Guernsey,
as a closed-ended investment company on 12
April 2013. The Company’s Shares were admitted to trading on
AIM of the LSE on 14 May 2013.
The Investment Manager of the Company is Weiss Asset Management
LP.
At the AGM held on 27 July 2016,
the Board approved the adoption of the new Articles of
Incorporation in accordance with Section 42(1) of the Companies
(Guernsey) Law, 2008 (the “Law”).
2. Significant accounting
policies
a) Statement of
compliance
The Condensed Financial Statements of the Company for the period
ended 30 June 2019 have been prepared
in accordance with IFRS issued by the European Union and the AIM
Rules of the London Stock Exchange. They give a true and fair view
and are in compliance with the Companies (Guernsey) Law, 2008.
b) Basis of
preparation
The Condensed Financial Statements are prepared in pounds
sterling (£), which is the Company’s functional and presentational
currency. They are prepared on a historical cost basis modified to
include financial assets at fair value through profit or loss.
The Condensed Financial Statements, covering the period from 1
January to 30 June 2019, are not
audited.
The accounting policies adopted are consistent with those used
in the Annual Report and Audited Financial Statements for the year
ended 31 December 2018. As disclosed
in those Annual Financial Statements, IFRS 16, ‘Leases’ was
applicable for financial reporting periods starting 1 January 2019. As such, this standard has been
adopted by the Company, but has no effect on the Company. There
were no other new standards, interpretations or amendments to
standards issued and effective for the Period that materially
impacted the Company.
The Condensed Financial Statements do not include all the
information and disclosures required in the Annual Report and
Audited Financial Statements and should be read in conjunction with
the Annual Report and Audited Financial Statements for the year
ended 31 December 2018. The Auditor’s
Report contained within the Annual Report and Audited Financial
Statements provided an unmodified opinion.
The preparation of the Condensed Financial Statements requires
management to make estimates and assumptions that affect the
reported amounts of revenues, expenses, assets, and liabilities at
the date of these Condensed Financial Statements. If in the
future such estimates and assumptions, which are based on
management’s best judgement at the date of the Condensed Financial
Statements, deviate from the actual circumstances, the original
estimates and assumptions will be modified as appropriate in the
period in which the circumstances change.
c) Going concern
Given that the Company has continued in existence following the
second Realisation Opportunity and will continue to operate as a
going concern unless a determination to wind up the Company is
made, every two years after the Realisation Date, the Directors
will propose further realisation opportunities for Shareholders who
have not previously elected to realise all of their Ordinary Shares
using a similar mechanism used in the previously announced
Realisation Opportunity. The next Realisation Opportunity will take
place during May 2021.
Based on the fact that the assets currently held by the Company
consist mainly of securities that are readily realisable, whilst
the Directors acknowledge that the liquidity of these assets needs
to be managed, the Directors believe that the Company has adequate
financial resources to meet its liabilities as they fall due for at
least twelve months from the date of this report, and that it is
appropriate for the Condensed Financial Statements to be prepared
on a going concern basis.
3. Taxation
The Company has been granted Exempt Status under the terms of
The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 to income
tax in Guernsey. Its liability is an annual fee of £1,200 (2018:
£1,200).
The amounts disclosed as taxation in the Condensed Statement of
Comprehensive Income relate solely to withholding tax levied in
South Korea on distributions from
South Korean companies at an offshore rate of 22%.
4. Dividends to
Shareholders
Dividends, if any, will be paid annually each year. An annual
dividend of 4.1195 pence per Share
(£3,475,415) was approved on 1 May
2019 and paid on 31 May 2019
in respect of the year ended 31 December 2018.
An annual dividend of 3.4155 pence
per Share (£2,881,486) was approved on 8
June 2018 and paid on 13 July
2018 in respect of the year ended 31 December 2018.
5. Significant accounting
judgements, estimates, and assumptions
The preparation of the Condensed Financial Statements in
conformity with IFRS requires management to make judgements,
estimates, and assumptions that affect the application of policies
and the reported amounts of assets and liabilities, income and
expense, and the accompanying disclosures. Uncertainty about these
assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities
affected in future periods. The significant judgements, estimates,
and assumptions made by management when applying the Company’s
accounting policies, as well as the key sources of estimation
uncertainty, were the same for these Condensed Financial Statements
as those that applied to the Annual Report and Audited Financial
Statements for the year ended 31 December
2018.
6. Basic and diluted
(loss)/earnings per Share
The basic and diluted earnings/(loss) per Share for the Company
has been calculated based on the total comprehensive gain for the
period of £10,719,795 (period ended 30 June
2018: £18,189,380 loss) and the weighted average number of
Ordinary Shares in issue during the period of 83,666,809 (period
ended 30 June 2018: 84,364,981).
7. Net asset value per
Ordinary Share
The net asset value of each Share of £1.5901 (as at 31 December 2018: £1.4993) is determined by
dividing the net assets of the Company attributed to the Ordinary
Shares of £129,777,368 (as at 31 December 2018: £126,489,595)
by the number of Ordinary Shares in issue at 30 June 2019 of 81,617,828 (as at
31 December 2018: 84,364,981 Ordinary Shares in issue).
8. Net changes in fair
value on financial assets at fair value through profit or loss
|
|
|
|
As
at |
|
As
at |
|
|
|
|
30
June |
|
31
December |
|
|
|
|
2019 |
|
2018 |
|
|
|
|
£ |
|
£ |
Cost of
investments at beginning of the period/year |
|
|
110,153,284 |
|
106,460,720 |
Purchases
of investments in the period/year |
|
|
2,121,494 |
|
20,717,121 |
Disposal
of investments in the period/year |
|
|
(10,326,520) |
|
(21,930,228) |
Realised
gain on disposal of investments in the period/year |
|
|
3,978,936 |
|
4,905,671 |
Cost of
investments held at end of the period/year |
|
|
105,927,194 |
|
110,153,284 |
Unrealised
gain on investments |
|
|
17,831,932 |
|
10,159,552 |
Financial
assets at fair value through profit or loss |
|
|
123,759,126 |
|
120,312,836 |
9. Derivative financial instruments
at fair value through profit or loss
|
|
|
|
As
at |
|
As
at |
|
|
|
|
30
June |
|
31
December |
|
|
|
|
2019 |
|
2018 |
|
|
|
|
£ |
|
£ |
Cost of
derivatives at beginning of the period/year |
|
|
(552,309) |
|
(605,324) |
Open of
derivatives in the period/year |
|
|
|
310,732 |
|
967,526 |
Closure of
derivatives in the period/year |
|
|
|
(1,884,115) |
|
(122,665) |
Realised
gain/(loss) on closure of derivatives in the period/year |
|
|
979,334 |
|
(791,846) |
Net cost
of derivatives held at end of the period/year |
|
|
(1,146,358) |
|
(552,309) |
Net
changes in fair value on derivative financial instruments at fair
value through profit or loss |
|
276,180 |
|
1,049,500 |
Net fair
value on derivative financial instruments at fair value through
profit or loss |
|
(870,178) |
|
497,191 |
|
|
|
|
|
|
|
|
10. Share capital
The share capital of the Company consists of an unlimited number
of Ordinary Shares of no par value.
|
|
|
|
As
at |
As
at |
|
|
|
|
30
June |
31
December |
|
|
|
|
2019 |
2018 |
Authorised |
|
|
|
|
|
Unlimited
Ordinary Shares at no par value |
|
|
- |
- |
|
|
|
|
|
|
Issued at no par
value |
|
|
|
|
|
81,617,828
(2018: 84,364,981) unlimited Ordinary Shares at no par value |
- |
- |
|
|
|
|
|
|
Reconciliation of number of Shares |
|
|
|
|
|
|
|
|
As
at |
As
at |
|
|
|
|
30
June |
31
December |
|
|
|
|
2019 |
2018 |
|
|
|
|
No. of
Shares |
No. of
Shares |
Ordinary
Shares at the beginning of the period/year |
|
|
84,364,981 |
84,364,981 |
Purchase
of Realisation Shares |
|
|
(2,747,153) |
- |
Total
Ordinary Shares in issue at the end of the period/year |
|
81,617,828 |
84,364,981 |
|
|
|
|
As
at |
As
at |
|
|
|
|
30
June |
31
December |
|
|
|
|
2019 |
2018 |
|
|
|
|
£ |
£ |
Share
capital at the beginning of the period/year |
|
|
72,080,642 |
72,080,642 |
Purchase
of Realisation Shares |
|
|
(3,956,607) |
- |
Total
Share capital at the end of the period/year |
|
|
68,124,035 |
72,080,642 |
Ordinary shares
The Company has a single class of Ordinary Shares which were
issued by means of an initial public offering on 14 May 2013, at 100
pence per Share.
The rights attached to the Ordinary Shares are as follows:
a) The holders of Ordinary Shares shall confer the
right to all dividends in accordance with the Articles of
Incorporation of the Company.
b) The capital and surplus assets of the Company
remaining after payment of all creditors shall, on winding-up or on
a return (other than by way of purchase or redemption of own
Ordinary Shares) be divided amongst the Shareholders on the basis
of the capital attributable to the Ordinary Shares at the date of
winding up or other return of capital.
c) Shareholders present in person or by proxy or
(being a corporation) present by a duly authorised representative
at a general meeting have, on a show of hands, one vote and, on a
poll, one vote for every Share.
d) On 20 March 2019,
being 46 days before the Subsequent Realisation Date, the Company
published a circular pursuant to the Realisation Opportunity,
entitling the Shareholders to serve a written notice during the
election period (a “Realisation Election”) requesting that all or a
part of their Ordinary Shares be re-designated to Realisation
Shares, subject to the aggregate NAV of the continuing Ordinary
Shares on the last business day before the Reorganisation Date
being not less than £50 million. As Shareholders elected to
participate in the Realisation Opportunity, the Company’s portfolio
was divided into two pools: the Continuation Pool; and the
Realisation Pool.
e) On 15 May 2019,
2,747,153 Ordinary Shares, which represented 3.3 per cent of the
Company’s issued Ordinary Share capital were redesignated as
Realisation Shares. On the 7 June
2019 the Board approved the compulsory redemption of the
Realisation Shares in issue. The redemption price was 142.53 pence per Realisation Share, being the net
assets of the Realisation Pool of £3,915,557, divided by the number
of outstanding Realisation Shares in issue, being 2,747,153
Realisation Shares. The redemption proceeds were paid by cheque to
the Realisation Shareholders on 18 June
2019, after which the Realisation Shares were cancelled and
were no longer in issue.
Share buyback and cancellation
During the period ended 30 June
2019 and throughout 2018, the Company did not purchase any
of its own Ordinary Shares under the Share buyback authority
originally granted to the Company in 2014.
At the AGM held on 25 July 2019,
Shareholders approved the authority of the Company to buy back up
to 40% of the issued Ordinary Shares to facilitate the
Company’s discount management. Any Ordinary Shares bought back may
be cancelled or held in treasury.
11. Related party transactions and
material agreements
Related party transactions
a) Directors’
remuneration and expenses
The Directors of the Company are remunerated for their services
at such a rate as the Directors determine provided that the
aggregate amount of such fees does not exceed £150,000 per
annum.
The annual Directors’ fees comprise £30,000 payable to Mr
Crighton as the Chairman, £27,500 to Mr Coe as Chairman of the
Audit Committee and £24,000 to Mr King.
During the period ended 30 June
2019, Directors’ fees of £40,750 (period ended 30 June 2018: £40,750) were charged to the
Company and £Nil remained payable at the end of the period (as at
31 December 2018: £Nil).
b) Shares held by related
parties
The Directors who held office at 30 June 2019 and up to the
date of this Report held the following number of Ordinary Shares
beneficially:
|
|
As at 30 June 2019 |
As at 31 December 2018 |
|
|
Ordinary |
|
% of
issued |
Ordinary |
|
% of
issued |
|
|
Shares |
|
share
capital |
Shares |
|
share
capital |
Norman Crighton |
|
20,000 |
|
0.02% |
20,000 |
|
0.02% |
Stephen Coe |
|
10,000 |
|
0.01% |
10,000 |
|
0.01% |
Robert King |
|
15,000 |
|
0.02% |
15,000 |
|
0.02% |
The Investment Manager is principally owned by Dr. Andrew Weiss and certain members of the
Investment Manager’s senior management team.
As at 30 June 2019, Dr.
Andrew Weiss and his immediate
family members held an interest in 6,486,888 Ordinary Shares (as at
31 December 2018: 6,486,888 Ordinary
Shares) representing 7.95 per cent. (as at 31 December 2018:
7.69 per cent.) of the issued share capital of the Company.
As at 30 June 2019, employees of
the Investment Manager, their respective immediate family members,
or entities controlled by them or their immediate family members
held an interest in 2,844,333 Ordinary Shares (as at 31 December 2018: 2,718,733) representing 3.48
per cent. (as at 31 December 2018:
3.22 per cent.) of the issued share capital of the
Company.
Material agreements
c) Investment
management fee
The Company’s Investment Manager is Weiss Asset Management LP.
In consideration for its services provided by the Investment
Manager under the Investment Management Agreement dated
8 May 2013, the Investment Manager is
entitled to an annual management fee of 1.5% of the Company’s NAV
accrued daily and payable within 14 days after each month end. The
Investment Manager is also entitled to reimbursement of certain
expenses incurred by it in connection with its duties.
The Investment Management Agreement will continue in force until
terminated by the Investment Manager or the Company giving to the
other party thereto not less than 12 months’ notice in writing.
For the period ended 30 June 2019,
investment management fees and charges of £935,306 (period ended
30 June 2018: £1,111,182) were
charged to the Company and £148,334 (as at 31 December 2018: £316,144) remained payable at
the Period end.
12. Fair value measurement
IFRS 13 ‘Fair Value Measurement’ requires the Company to
establish a fair value hierarchy that prioritises the inputs to
valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3
measurements).
The three levels of the fair value hierarchy under IFRS 13 ‘Fair
Value Measurement’ are set as follows:
· Level 1 Quoted prices
(unadjusted) in active markets for identical assets or
liabilities;
· Level 2 Inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability either directly (that is, as prices) or indirectly (that
is, derived from prices); and
· Level 3 Inputs for the asset or
liability that are not based on observable market data (that is,
unobservable inputs).
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement. For this purpose, the significance of an input
is assessed against the fair value measurement in its entirety.
If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of
a particular input to the fair value measurement requires
judgement, considering factors specific to the asset or
liability.
The determination of what constitutes ‘observable’ requires
significant judgement by the Company. The Company considers
observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The following table presents the Company’s financial assets and
liabilities by level within the valuation hierarchy as of
30 June 2019:
|
|
|
|
|
Total |
|
|
|
|
|
As
at |
|
|
|
|
|
30
June |
|
|
Level
1 |
Level
2 |
Level
3 |
2019 |
|
|
£ |
£ |
£ |
£ |
Financial
assets/(liabilities) at fair value through |
|
|
|
|
profit or loss: |
|
|
|
|
|
Korean preferred shares |
|
123,759,126 |
- |
- |
123,759,126 |
Financial derivative assets |
|
148,037 |
- |
- |
148,037 |
Financial derivative liabilities |
|
- |
(1,018,215) |
- |
(1,018,215) |
Total net assets |
|
123,907,163 |
(1,018,215) |
- |
122,888,948 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
As
at |
|
|
|
|
|
31
December |
|
|
Level
1 |
Level
2 |
Level
3 |
2018 |
|
|
£ |
£ |
£ |
£ |
Financial
assets/(liabilities) at fair value through |
|
|
|
|
profit or loss: |
|
|
|
|
|
Korean preferred shares |
|
120,312,836 |
- |
- |
120,312,836 |
Financial derivative assets |
|
1,706,418 |
- |
- |
1,706,418 |
Financial derivative liabilities |
|
- |
(1,209,227) |
- |
(1,209,227) |
Total net assets |
|
122,019,254 |
(1,209,227) |
- |
120,810,027 |
The Company recognises transfers between levels of the fair
value hierarchy as of the end of the reporting period during which
the transfers have occurred. During the period ended 30 June
2019, financial assets of £Nil were transferred from Level 2 to
Level 1 (for the year ended 31 December
2018: £Nil).
Investments whose values are based on quoted market prices in
active markets, and are therefore classified within Level 1,
include Korean preference shares, exchange traded funds, and
exchange traded options.
The Company holds investments in derivative financial
instruments which are classified as Level 2 within the fair value
hierarchy. These consist of credit default swaps with a fair value
of (£1,018,215) (as at 31 December 2018: (£1,209,227)).
As at 30 June 2019, Level 2
financial derivative assets of £Nil were held (as at
31 December 2018: £Nil).
13. NAV reconciliation
The Company announces its NAV to the LSE after each weekly and
month end valuation point. The following is a reconciliation of the
NAV per Ordinary Share attributable to participating Shareholders
as presented in these Condensed Financial Statements, using IFRS to
the NAV per Ordinary Share reported to the LSE:
|
|
As at 30 June 2019 |
As at 31 December 2018 |
|
|
|
NAV
per |
|
NAV
per |
|
|
|
Participating |
|
Participating |
|
|
NAV |
Share |
NAV |
Share |
|
|
£ |
£ |
£ |
£ |
Net Asset Value
reported to the LSE |
|
129,430,635 |
1.5858 |
123,860,752 |
1.4682 |
Adjustment to accruals
and cash |
|
14,271 |
0.0002 |
(3,847) |
(0.0001) |
Adjustment for
dividend income |
|
332,462 |
0.0041 |
2,632,690 |
0.0280 |
Net Assets
Attributable to Shareholders per Financial Statements |
|
129,777,368 |
1.5901 |
126,489,595 |
1.4993 |
The published NAV per Ordinary Share of £1.5858 (as at
31 December 2018: £1.4682) is
different from the accounting NAV per Share of £1.5901 (as at
31 December 2018: £1.4993) due to the
adjustments noted above.
14. Subsequent events
These Condensed Financial Statements were approved for issuance
by the Board on 9 September 2019.
Subsequent events have been evaluated until this date.
As at the date of this Report, the Company has 81,617,828
Ordinary Shares in issue.
No further subsequent events have occurred.