NEW STAR INVESTMENT TRUST PLC Net asset value discount: The discount in the price at which the Company's shares trade to net asset value means that shareholders cannot realise the real underlying value of their investment. Over the last few years the Company's share price has been at a significant discount to the Company's net asset value. The Directors review regularly the level of discount, however given the investor base of the Company, the Board is very restricted in its ability to influence the discount to net asset value.
Investment Manager: The quality of the team employed by the Investment Manager is an important factor in delivering good performance and the loss of key staff could adversely affect returns. A representative of the Investment Manager attends each Board meeting and the Board is informed if any major changes to the investment team employed by the Investment Manager are proposed. The Investment Manager regularly informs the Board of developments and any key implications for either the Investment Strategy or the investment portfolio.
Tax and regulatory risks: A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the 'Regulations') could lead to capital gains realised within the portfolio becoming subject to UK capital gains tax. A breach of the FCA Listing Rules could result in suspension of the Company's shares, while a breach of company law could lead to criminal proceedings, financial and/or reputational damage. The Board employs Brompton Asset Management LLP as Investment Manager, and Maitland Administration Services Limited as Secretary and Administrator, to help manage the Company's legal and regulatory obligations.
Operational: Disruption to, or failure of, the Investment Manager's or Administrator's accounting, dealing or payment systems, or the Custodian's records, could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. The Board monitors its service providers, with an emphasis on their business interruption procedures.
The Directors confirm that they have carried out an assessment of the risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity.
INVESTMENT MANAGEMENT ARRANGEMENTS AND RELATED PARTY TRANSACTIONS
In common with most investment trusts the Company does not have any executive directors or employees. The day-to-day management and administration of the Company, including investment management, accounting and company secretarial matters, and custodian arrangements are delegated to specialist third party service providers.
Details of related party transactions are contained in the Annual Report. There have been no unusual material transactions with related parties during the period which have had a significant impact on the performance of the Company.
GOING CONCERN AND VIABILITY
The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the accounts as the assets of the Company consist mainly of securities that are readily realisable or cash and it has no significant liabilities. Investment income exceeds annual expenditure and current liquid net assets cover current annual expenses for many years. Accordingly, the Company is of the opinion that it has adequate financial resources to continue in operational existence for the foreseeable future which is considered to be in excess of five years. Five years is considered a reasonable time for investors when making their investment decisions. In reaching this view the Directors reviewed the anticipated level of annual expenditure against the cash and liquid assets within the portfolio. The Directors have also considered the risks the Company faces.
AUDITORS
The half year financial report has been reviewed, but not audited, by Ernst & Young LLP pursuant to the Auditing Practices Board guidance on the Review of Interim Financial Information.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
The financial statements contained within the half year financial report to 31st December 2020 has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting';
The Chairman's statement, Directors' report or the Investment Manager's report include a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements;
The Chairman's statement, Directors' report or the Investment Manager's report include a fair review of the potential risks and uncertainties for the remaining six months of the year;
The Director's report and note 8 to the half year financial report include a fair review of the information concerning transactions with the investment manager and changes since the last annual report.
By order of the Board
Maitland Administration Services Limited
18th March 2021
SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2020
Bid-market Value
Holding Investment Type % of Net Assets
GBP '000
Fundsmith Equity Fund Investment Fund 9,416 7.67
Polar Capital Global Technology Investment Fund 8,793 7.16
Embark Group Unquoted Investment 6,990 5.69
TM Crux European Special Situations Fund Investment Fund 5,477 4.46
Matthews Asia Ex Japan Fund Investment Fund 5,449 4.44
BlackRock Gold & General Fund Investment Fund 4,741 3.86
EF Brompton Global Conservative Fund Investment Fund 4,622 3.76
BlackRock Continental European Income Fund Investment Fund 4,306 3.50
Aquilus Inflection Fund Investment Fund 4,103 3.34
Baillie Gifford Global Income Growth Investment Fund 3,731 3.04
MI Chelverton UK Equity Income Fund Investment Fund 3,636 2.96
Lindsell Train Japanese Equity Fund Investment Fund 3,483 2.83
EF Brompton Global Equity Fund Investment Fund 3,405 2.77
EF Brompton Global Opportunities Fund Investment Fund 3,309 2.69
Aberforth Split Level Income Trust Investment Company 3,301 2.69
First State Indian Subcontinent Fund Investment Fund 3,127 2.55
EF Brompton Global Growth Fund Investment Fund 3,103 2.53
Liontrust Asia Income Fund Investment Fund 2,990 2.43
MI Brompton UK Recovery Unit Trust Investment Fund 2,736 2.23
EF Brompton Global Balanced Fund Investment Fund 2,551 2.08
89,269 72.68
Balance held in 21 investments 21,992 17.91
Total investments (excluding cash) 111,261 90.59
Net current assets (including cash) 11,552 9.41
Net Assets 122,813 100.00
The investment portfolio, excluding cash, can be further analysed as follows:
GBP'000
Investment funds 94,239
Unquoted investments 8,779
Investment companies and exchange traded funds 6,561
Other quoted investments 1,682
111,261
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2020 (unaudited)
Six months ended
31st December 2020
(unaudited)
Total
Revenue Return Capital Return
GBP '000 Return
GBP '000 GBP '000
Notes
INCOME
Investment income 795 - 795
Other operating income 3 - 3
Total income 2 798 - 798
GAINS AND LOSSES ON INVESTMENTS
Gains on investments at fair value through profit or loss 5
- 10,677 10,677
Other exchange gains - (1,035) (1,035)
Trail rebates - 1 1
798 9,643 10,441
EXPENSES
Management fees 3 (370) - (370)
Other expenses (149) - (149)
(519) - (519)
PROFIT BEFORE TAX 279 9,643 9,922 (MORE TO FOLLOW) Dow Jones Newswires
March 22, 2021 03:01 ET (07:01 GMT)
