Sherborne Investors (Guernsey)C Ltd Half-year Report

Data : 20/08/2019 @ 08:00
Fonte : UK Regulatory (RNS & others)
Titolo : Sherborne Investors (guernsey) C Limited (SIGC)
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Sherborne Investors (Guernsey)C Ltd Half-year Report

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Sherborne Investors (Guernsey)C Ltd

20 August 2019

SHERBORNE INVESTORS (GUERNSEY) C LIMITED

Interim Report and Unaudited Condensed Consolidated Financial Statements

For the period from 1 January 2019 to 30 June 2019

Company Summary

 
 The Company            Sherborne Investors (Guernsey) C Limited (the 
                         "Company") is a Guernsey domiciled limited liability 
                         company and its shares are admitted to trading 
                         on the London Stock Exchange's Specialist Fund 
                         Segment ("SFS"). The Company was incorporated 
                         on 25 May 2017. The Company commenced dealings 
                         on the SFS on 12 July 2017. 
 
 Investment Objective   To realise capital growth from investment in 
                         a target company identified by the Investment 
                         Manager, with the aim of generating a significant 
                         capital return for Shareholders. 
 
 Investment Policy      To invest, through its investment in SIGC, LP 
                        (Incorporated) (the "Investment Partnership"), 
                        in a company which is publicly quoted which it 
                        considers to be undervalued as a result of operational 
                        deficiencies and which it believes can be rectified 
                        by the Investment Manager's active involvement, 
                        thereby increasing the value of the investment. 
                        The Company will only invest in one target company 
                        at a time. 
 
 
 Investment Manager     The General Partner and the Investment Partnership 
                         have appointed Sherborne Investors Management 
                         (Guernsey) LLC (the "Investment Manager") to 
                         provide investment management services to the 
                         Investment Partnership. 
 
 

Chairman's Statement

During the period the Company continued to pursue its investment strategy through its shareholding in Barclays PLC ("Barclays"). Three funds (the "Funds") managed by affiliates of Sherborne Investors Management (Guernsey) LLC (the "Investment Manager"), of which SIGC, LP (Incorporated) is one, most recently disclosed on 10 May 2019 an ownership interest of 5.48% of the voting rights of Barclays.

As at 30 June 2019, the net asset value ("NAV") attributable to shareholders of the Company was GBP469.9 million (31 December 2018: GBP468.7 million) or 67.13 pence per share (31 December 2018: 66.96 pence per share) based on the closing price of 149.80 pence for Barclays' shares. As at 16 August 2019 Barclays' share price declined to 139.82 pence and therefore NAV per share attributable to shareholders of the Company is now approximately 64.4 pence per share.

During the period we began reporting estimated month end NAV and NAV per share of the Company which we will continue for the duration of the Barclays investment.

On 4 February 2019 the Funds submitted a resolution to Barclays to elect Edward Bramson, a partner in Sherborne Investors Management LP, to the board of Barclays at its Annual General Meeting on 2 May 2019. The resolution was voted on by shareholders at the meeting and was not passed.

The Investment Manager has advised the Board that it believes that addressing the issues it has discussed with Barclays' board could increase Barclays' financial strength and its long-term competitive position, leading to an increase in shareholder value in line with the Investment Manager's customary return objectives. The Investment Manager's present intention is to continue its dialogue with Barclays for as long as it appears to be appropriate to do so.

The principal risks and uncertainties of the Company are in relation to performance risk, market risk, relationship risk and operational risk. These are unchanged from 31 December 2018, and further details may be found in the Directors' Strategic Report within the Annual Report and Audited Consolidated Financial Statements of the Company for the year ended 31 December 2018. The Directors will continue to assess the principal risks and uncertainties relating to the Company for the remaining six months of the year but expect these to remain unchanged.

Details of related party transactions during the period are included in note 12 of the Condensed Consolidated Financial Statements.

The Company intends to continue to pursue its strategy as set out in its prospectus.

We are grateful for your continued support and will keep you informed of the status of our investment as it develops.

Responsibility statement

We confirm that to the best of our knowledge:

-- The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted in the European Union;

-- The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and their impact on the condensed financial statements and description of principal risks and uncertainties for the remaining six months of the year);

-- The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein); and

-- The condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.10R.

Going Concern

Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern.

The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the on-going cash flows and the level of cash balances as of the reporting date as well as taking forecasts of future cash flows into consideration.

After making enquiries of the Investment Manager and the Administrator, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing these unaudited Condensed Consolidated Financial Statements.

Independent Auditor's Review Report to the Members of Sherborne Investors (Guernsey) C Limited

We have been engaged by Sherborne Investors (Guernsey) C Limited (the "Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and related notes 1 to 15. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months to 30 June 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

For the period from 1 January 2019 to 30 June 2019

 
                                      1 January 2019                   1 January 2018             1 January 2018 
                                            to                               to                          to 
                                       30 June 2019                     30 June 2018                31 December 
                                                                                                        2018 
                                                                                                     (audited) 
                     Notes     GBP               GBP               GBP            GBP          GBP               GBP 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 Income              1(e) 
 Unrealised 
  gain/(loss) 
  on financial 
  assets 
  at fair value 
  through            1(d), 
  profit or loss       5                            1,184,206                   (71,335,064)           (208,982,908) 
 Realised loss on 
  investments          5                                    -                   (13,818,011)            (13,818,011) 
 Dividend income       6                            3,488,732                      1,727,848               3,908,306 
 Interest income                                       24,550                        294,064                 309,399 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
                                                    4,697,488                   (83,131,163)           (218,583,214) 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 Expenses            1(f) 
 Management fees      12           2,117,179                    2,625,201                5,077,000 
 Professional fees                 1,079,496                      399,227                  927,028 
 Directors' fees     2, 12            80,000                       80,000                  160,000 
 Administrative 
  fees                                77,878                      133,640                  210,878 
 Trading and 
  custodian 
  fees                                     -                    2,060,765                2,060,765 
 Other fees                          152,074                      163,251                  188,363 
                                                                                                    ---------------- 
                                                  (3,506,627)                    (5,462,084)             (8,624,034) 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 Comprehensive 
  income/(loss)                                     1,190,861                   (88,593,247)           (227,207,248) 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 Comprehensive 
 income/(loss) 
 attributable to: 
 Shareholders                                       1,190,147                   (88,564,712)           (227,151,537) 
 Non-controlling 
  interest (NCI)     1(b)                                 714                       (28,535)                (55,711) 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 Weighted average 
  number of shares 
  outstanding          4                          700,000,000                    700,000,000             700,000,000 
 Basic and diluted 
  earnings per 
  share 
  attributable to 
  shareholders 
  (excluding 
  NCI)                                                  0.17p                       (12.65)p                (32.45)p 
------------------  ------  ---------  ----------------------  ----------  -----------------  ----  ---------------- 
 
 All revenue and expenses are derived from 
  continuing operations. 
 
 

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Financial Position (Unaudited)

As at 30 June 2019

 
                                    30 June 2019                   30 June 2018               31 December 2018 
                                                                                                  (audited) 
                    Notes      GBP             GBP             GBP             GBP           GBP           GBP 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ------------- 
 Non-Current 
  Assets 
 Financial assets 
  at fair value 
  through profit 
  or loss             5                      441,571,407                    578,035,045                 440,387,201 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ------------- 
                                             441,571,407                    578,035,045                 440,387,201 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ------------- 
 Current Assets 
 Cash and cash      1(h), 
  equivalents         8      8,545,306                       29,432,960                   28,521,320 
 Treasury gilts     1(m)    20,011,139                                -                            - 
 Prepaid expenses     7         38,220                           67,142                       21,768 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ------------- 
                            28,594,665                       29,500,102                   28,543,088 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ------------- 
 Current 
 Liabilities 
 Trade and other 
  payables            9      (151,688)                         (97,623)                    (106,766) 
                                                                                                      ---------------- 
                             (151,688)                         (97,623)                    (106,766) 
-----------------  ------  -----------  ----------------  -------------  --------------  -----------  ---------------- 
 Net Current 
  Assets                                      28,442,977                     29,402,479                     28,436,322 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 Net Assets                                  470,014,384                    607,437,524                    468,823,523 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 Capital and 
  Reserves 
 Called up share 
  capital and 
  share premium      10                      688,939,403                    688,939,403                    688,939,403 
 Retained 
  reserves                                 (219,019,408)                   (81,622,730)                  (220,209,555) 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 Equity 
  attributable 
  to the Company                             469,919,995                    607,316,673                    468,729,848 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 Non-controlling 
  interest (NCI)    1(b)                          94,389                        120,851                         93,675 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 Total Equity                                470,014,384                    607,437,524                    468,823,523 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 
 NAV Per Share 
  (excluding NCI)    11                           67.13p                         86.76p                         66.96p 
-----------------  ------  -----------  ----------------  ---------  ------------------  -----------  ---------------- 
 
 

The Condensed Consolidated Financial Statements were approved by the Board of Directors for issue on 19 August 2019.

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the interim period and the related notes have been included on a voluntary basis.

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Changes in Equity (Unaudited)

For the period from 1 January 2019 to 30 June 2019

 
                                       Share Capital                       Non- 
                                         and Share       Retained       Controlling      Total 
                                          Premium         Reserves       Interest        Equity 
                              Notes         GBP             GBP            GBP            GBP 
---------------------------  -------  --------------  --------------  -------------  ------------ 
 Balance at 1 January 2019               688,939,403   (220,209,555)         93,675   468,823,523 
------------------------------------  --------------  --------------  -------------  ------------ 
 
 Comprehensive income                              -       1,190,147            714     1,190,861 
 Balance at 30 June 2019                 688,939,403   (219,019,408)         94,389   470,014,384 
------------------------------------  --------------  --------------  -------------  ------------ 
 
 
 
                                            Share Capital                      Non- 
                                              and Share       Retained      Controlling      Total 
                                               Premium        Reserves       Interest        Equity 
                                   Notes         GBP            GBP            GBP            GBP 
-------------------------------  --------  --------------  -------------  -------------  ------------- 
 Balance at 1 January 2018                    688,939,403      6,941,982         91,386    695,972,771 
-------------------------------  --------  --------------  -------------  -------------  ------------- 
 
 Contributions                                          -              -         58,000         58,000 
 Comprehensive loss                                     -   (88,576,077)       (17,170)   (88,593,247) 
 Incentive allocation reversal    1(l),12               -         11,365       (11,365)              - 
 Balance at 30 June 2018                      688,939,403   (81,622,730)        120,851    607,437,524 
-------------------------------  --------  --------------  -------------  -------------  ------------- 
 
 
 
                                            Share Capital                       Non- 
                                              and Share       Retained       Controlling       Total 
                                               Premium         Reserves       Interest         Equity 
                                   Notes         GBP             GBP            GBP             GBP 
-------------------------------  --------  --------------  --------------  -------------  -------------- 
 Balance at 1 January 2018                    688,939,403       6,941,982         91,386     695,972,771 
-------------------------------  --------  --------------  --------------  -------------  -------------- 
 
 Contributions                                          -               -         58,000          58,000 
 Comprehensive loss                                     -   (227,162,902)       (44,346)   (227,207,248) 
 Incentive allocation reversal    1(l),12               -          11,365       (11,365)               - 
 Balance at 31 December 
  2018 (audited)                              688,939,403   (220,209,555)         93,675     468,823,523 
-------------------------------  --------  --------------  --------------  -------------  -------------- 
 
 

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

Condensed Consolidated Statement of Cash Flows (Unaudited)

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements.

For the period from 1 January 2019 to 30 June 2019

 
 
                                                                                       1 January 2018 
                                                                                        to 31 December 
                                                                                             2018 
                                                                     1 January 2018       (audited) 
                                                     1 January         to 30 June            GBP 
                                                     2019 to 30            2018 
                                                      June 2019 
                                         Notes           GBP               GBP 
------------------------------------  ----------  ---------------  ----------------  ----------------- 
 Net cash flow from/(used in) operating 
  activities See below                                     10,577       (5,560,319)        (6,487,294) 
------------------------------------------------  ---------------  ----------------  ----------------- 
 
 Investing activities 
 Purchase of investments                   5                    -     (877,074,819)      (953,804,267) 
 Purchase of Treasury gilts              1(m)        (20,001,441)                 -                  - 
 Interest income                                           14,850           294,064            309,399 
 Proceeds from disposal 
  of investments                           5                    -       499,118,015        575,847,463 
 Net cash flows used in investing 
  activities                                         (19,986,591)     (377,662,740)      (377,647,405) 
------------------------------------------------  ---------------  ----------------  ----------------- 
 
 Financing activities 
 Contributions from non-controlling 
  interest                                                      -            58,000             58,000 
 Net cash flows from financing 
  activities                                                    -            58,000             58,000 
------------------------------------------------  ---------------  ----------------  ----------------- 
 Net movement in cash and cash 
  equivalents                                        (19,976,014)     (383,165,059)      (384,076,699) 
 Opening cash and cash equivalents                     28,521,320       412,598,019        412,598,019 
------------------------------------------------  ---------------  ----------------  ----------------- 
 Closing cash and cash equivalents                      8,545,306        29,432,960         28,521,320 
------------------------------------------------  ---------------  ----------------  ----------------- 
 
 
 
 Net cash flow from/(used 
  in) operating activities 
----------------------------------------  ------  ---------------  ----------------  ----------------- 
 Comprehensive income/(loss)                            1,190,861      (88,593,247)      (227,207,248) 
 Realised loss on investments                5                  -        13,818,011         13,818,011 
 Unrealised (gain)/loss on 
  financial assets at fair 
  value through profit or loss               5        (1,184,206)        71,335,064        208,982,908 
 Scrip dividend                              5                  -       (1,727,848)        (1,727,848) 
 Movement in prepaid expenses                7           (16,450)          (23,932)             21,442 
 Movement in trade and other 
  payables                                   9             44,922          (74,303)           (65,160) 
 Interest income                                         (24,550)         (294,064)          (309,399) 
----------------------------------------  ------  ---------------  ----------------  ----------------- 
 Net cash flow from/(used) in operating 
  activities                                               10,577       (5,560,319)        (6,487,294) 
------------------------------------------------  ---------------  ----------------  ----------------- 
 
 

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements.

Notes to the Condensed Consolidated Financial Statements

For the period from 1 January 2019 to 30 June 2019

1. Summary of significant accounting policies

Reporting entity

Sherborne Investors (Guernsey) C Limited (the "Company") is a closed-ended investment company with limited liability formed under The Companies (Guernsey) Law, 2008 (as amended). The Company was incorporated and registered in Guernsey on 25 May 2017. The Company commenced dealings on the London Stock Exchange's Specialist Fund Segment ("SFS") on 12 July 2017. The Company's registered office is 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey GY1 2HL. The "Group" is defined as the Company and its subsidiaries, SIGC, LP (Incorporated) and SIGC Midco Limited.

Basis of preparation

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted in the European Union. The financial information for the year ended 31 December 2018, as included in this Interim Report, is derived from the financial statements delivered to the Listing Authority and does not constitute statutory accounts as defined by The Companies (Guernsey) Law, 2008 (as amended). The Auditor reported in the statutory financial statements for the year ended 31 December 2018: their report was unqualified; did not draw attention to any matters by way of emphasis; and did not contain a statement under Section 263(2) or 263(3) of The Companies (Guernsey) Law, 2008 (as amended).

The unaudited Condensed Consolidated Financial Statements of the Group have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' ("IAS 34") as adopted in the European Union, together with applicable legal and regulatory requirements of Guernsey Law. The Directors of the Company have taken the exemption in Section 244 of The Companies (Guernsey) Law, 2008 (as amended) and have therefore elected to only prepare Condensed Consolidated Financial Statements for the period.

These Condensed Consolidated Financial Statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim period, with the exception of note 1(m) following the acquisition of Treasury gilts in the period ended 30 June 2019.

Going concern

Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern.

The Directors have undertaken a rigorous review of the Group's ability to continue as a going concern including reviewing the ongoing cash flows and the level of cash balances as of the reporting date as well as taking forecasts of future cash flows into consideration and are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future.

After making enquiries of the Investment Manager and the Administrator, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing these unaudited Condensed Consolidated Financial Statements.

Critical accounting judgments and key sources of estimation uncertainty

The preparation of the Group's Condensed 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 Condensed Consolidated Financial Statements and revenue and expenses during the reported period. Actual results could differ from those estimated.

i) Source of estimation uncertainty: Investments at fair value through profit or loss

The Group's investments are measured at fair value for financial reporting purposes. Fair value of financial assets quoted on the London Stock Exchange are based on the quoted closing price at 30 June 2019. The fair value of other financial assets are based on the net asset value ("NAV") of the investment. The main contribution to their NAV is the quoted closing price on the London Stock Exchange at 30 June 2019.

ii) Critical accounting judgement: Incentive allocation

As more fully described in note 12, the Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to Partners of the Investment Partnership exceed a certain level. The basis of the incentive calculation differs depending on how the investment in the Selected Target Company ("STC") is ultimately characterised (i.e. as a Turnaround or Stake Building Investment).

iii) Critical accounting judgement: Consolidation of entities

The Group holds majority interest in other financial assets, as described in note 5, however does not have the ability to exercise control over these assets. They are therefore not consolidated and are held at fair value through profit or loss.

Adoption of new and revised standards

(i) New standards adopted as at 1 January 2019:

All new standards effective from 1 January 2019 have been adopted and do not have a material impact on the financial statements.

(ii) Standards, amendments and interpretations early adopted by the Company:

There were no standards, amendments and interpretations adopted early by the Company.

(iii) Standards, amendments and interpretations that are in issue but not yet effective:

 
 New standards                                     Effective date 
----------------------------------------------  ----------------- 
 IFRS   Insurance Contracts                             1 January 
  17                                                         2021 
 
 

The future adoption of this standard is not expected to have a material impact on the financial statements.

a. Basis of consolidation

The Condensed Consolidated Financial Statements incorporate the financial statements of the Company and two entities controlled by the Company (its subsidiaries). 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. Investments where a majority interest is held but control is not achieved are held at fair value through profit or loss.

Non-controlling interests in the net assets of the consolidated subsidiaries 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 subsidiaries 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, via SIGC Midco Limited, a 100% owned subsidiary, owns 99.98% of the capital interest in SIGC, LP (Incorporated). Whilst the general partner of SIGC, LP (Incorporated), Sherborne Investors (Guernsey) GP, LLC, a company registered in Delaware, USA, is responsible for directing the day to day operations of SIGC, LP (Incorporated), the Company, through its majority interest in SIGC, LP (Incorporated), has the ability to approve the proposed investment of SIGC, LP (Incorporated) and to remove the general partner. Hence, the Company has consolidated SIGC, LP (Incorporated) and SIGC Midco Limited in its financial statements.

b. Non-controlling interest

The interest of non-controlling parties in the subsidiary is 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 Condensed Consolidated Financial Statements of the Group are measured using the currency of the primary economic environment in which the entity operates. The Condensed Consolidated Financial Statements are presented in Pound Sterling ("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 Condensed Consolidated Statement of Financial Position are retranslated into sterling at the rate of exchange ruling at that date. Exchange differences are reported in the Condensed Consolidated Statement of Comprehensive Income.

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 IFRS 9, 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. Under International Accounting Standard 28 'Investments in Associates' ("IAS 28"), the fund can hold its investments at fair value through profit or loss rather than as an associate as SIGC, LP (Incorporated) is a closed-ended fund.

Investments in voting shares, convertible bonds and derivative contracts are initially recognised at cost. The investments in voting shares, convertible bonds 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, convertible bonds and derivative contracts are taken directly to the Condensed Consolidated Statement of Comprehensive Income.

The Group's investments are measured at fair value for financial reporting purposes. Fair value of financial assets quoted on the London Stock Exchange are based on the quoted closing price at 30 June 2019. The fair value of other financial assets are based on the net asset value of the investment. The other investments invest in financial assets quoted on the London Stock Exchange as well as through derivative instruments and so the main contribution to their net asset value is the quoted closing price at 30 June 2019.

In determining fair value in accordance with IFRS 13 'Fair Value Measurement' ("IFRS 13"), investments measured and reported at fair value are classified and disclosed in one of the following categories within the fair value hierarchy:

Level I - An unadjusted quoted price for identical assets and liabilities 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 13, 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 judgement or estimation.

The Group's investments are summarised by Level in note 5. On disposal of shares or conversion of bonds, cost of investments are allocated on a first in, first out basis.

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.

Investment income and interest receivable from short-term deposits and Treasury gilts are recognised on an accrual 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 accrual basis. Expenses are charged through the Condensed Consolidated Statement of Comprehensive Income.

g. Prepaid expenses and trade receivables

Trade and other receivables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method. 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. The Group only holds trade receivables with no financing component and which have maturities of less than 12 months at amortised cost and has therefore applied the simplified approach to expected credit loss.

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 Condensed Consolidated Statement of Cash Flows.

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 Condensed 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 accrual basis and the calculation is disclosed in note 12. The incentive allocation is payable to the non-controlling interest and therefore recognised in the Condensed Consolidated Statement of Changes in Equity rather than recognised as an expense in the Condensed Consolidated Statement of Comprehensive Income.

m. Treasury gilts

Treasury gilts are initially recognised at fair value and subsequently, re-measured at amortised cost using the effective interest method.

2. Comprehensive income/(loss)

The comprehensive income/(loss) has been arrived at after charging:

 
                              1 January 2019   1 January 2018   1 January 2018 
                                to 30 June       to 30 June      to 31 December 
                                   2019             2018              2018 
                                   GBP              GBP               GBP 
---------------------------  ---------------  ---------------  ---------------- 
 Directors' fees                  80,000           80,000           160,000 
 Auditor's remuneration - 
  Audit                           16,166           10,535           24,291 
  Auditors' remuneration - 
   Interim review                 21,801              -              16,300 
 

In addition to the audit related remuneration above, a further GBP14,600 was due to the Auditor in relation to tax compliance services (period ended 30 June 2018: GBP12,610 and year ended 31 December 2018: GBP28,019).

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 GBP1,200) 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. Earnings per share

The calculation of basic and diluted gain per share is based on the return on ordinary activities less total comprehensive income attributable to the non-controlling interest and on there being 700,000,000 weighted average shares in issue during the period (30 June 2018: 700,000,000 and 31 December 2018: 700,000,000). The earnings per share for the period ended 30 June 2019 amounted to a surplus of 0.17 pence per share (period ended 30 June 2018: a deficit of 12.65 pence per share and year ended 31 December 2018: deficit of 32.45 pence per share).

 
 
                                 Days in   Weighted Average 
           Date         Shares     issue             Shares 
       1 January 
            2019   700,000,000                  700,000,000 
    30 June 2019   700,000,000       181        700,000,000 
 

5. Financial assets at fair value through profit or loss

 
                                                         As at 30      As at 31 December 
                                          As at 30          June              2018 
                                          June 2019         2018 
                                             GBP            GBP               GBP 
--------------------------------------  ------------  --------------  ------------------ 
 Opening fair value                      440,387,201    307,930,107       307,930,107 
 Purchases of investments                     -         852,648,180       965,538,700 
 Scrip dividend                               -          1,727,848         1,727,848 
 Disposal of investments                      -        (499,118,015)     (612,008,535) 
 Unrealised gain/(loss) on financial 
  assets at fair value through profit 
  or loss                                 1,184,206    (71,335,064)       (208,982,908) 
 Realised loss on investments                 -        (13,818,011)      (13,818,011) 
--------------------------------------  ------------  --------------  ------------------ 
 Closing fair value                      441,571,407    578,035,045       440,387,201 
--------------------------------------  ------------  --------------  ------------------ 
 
 

The Board of Directors approved Barclays PLC ("Barclays"), a London Stock Exchange listed bank holding company, as the STC in 2018 and as at 30 June 2019, the Group held 87,218,309 shares of Barclays. The investment in Barclays is classified as meeting the definition of Level I in the fair value hierarchy.

The Group also holds non-controlling interests in Whistle Investors LLC and Whistle Investors II LLC (together the "Whistle entities"). The Whistle entities were organised to invest in the STC. Whistle Investors II LLC invests directly into Barclays. Whistle Investors LLC's investment into Barclays includes derivatives valued using unobservable inputs derived from the underlying investment. The Level II and Level III investments disclosed in the financial statements are solely comprised of the Groups interest in Whistle Investors II LLC and Whistle Investors LLC, respectively. The value of those investments equates to the Group's maximum exposure to loss from the Whistle entities.

The following tables summarise by level within the fair value hierarchy the Group's financial assets and liabilities at fair value as follows:

 
                                     Level I      Level II     Level III       Total 
 30 June 2019                          GBP          GBP           GBP           GBP 
--------------------------------  ------------  -----------  ------------  ------------ 
 Financial assets at fair value 
  through profit and loss          130,653,027   80,859,350   230,059,030   441,571,407 
 
 
                                     Level I      Level II      Level III       Total 
 30 June 2018                          GBP           GBP           GBP           GBP 
--------------------------------  ------------  ------------  ------------  ------------ 
 Financial assets at fair value 
  through profit and loss          164,842,604   223,108,082   190,084,359   578,035,045 
 
 
                                     Level I      Level II     Level III       Total 
 31 December 2018                      GBP          GBP           GBP           GBP 
--------------------------------  ------------  -----------  ------------  ------------ 
 Financial assets at fair value 
  through profit and loss          131,280,999   86,288,245   222,817,957   440,387,201 
 

A reconciliation of fair value measurements in Level III is set out in the following table:

 
                           As at 30 June   As at 30 June   As at 31 December 
                                2019            2018              2018 
                                GBP             GBP               GBP 
------------------------  --------------  --------------  ------------------ 
 Opening fair value          222,817,957               -                   - 
 Purchases at cost             6,774,352     279,260,269         392,150,789 
 Proceeds from disposal                -    (29,146,450)        (29,146,450) 
 Movement in fair value          466,721    (60,029,460)       (140,186,382) 
------------------------  --------------  --------------  ------------------ 
 Closing fair value          230,059,030     190,084,359         222,817,957 
------------------------  --------------  --------------  ------------------ 
 

6. Dividend income

On 21 February 2019, Barclays declared a dividend of 4.0 pence per share, paid on 5 April 2019 to shareholders of record on 1 March 2019. The Group received a cash dividend of GBP3,488,732 (period ended 30 June 2018: GBP1,727,848 and year ended 31 December 2018: GBP3,908,306).

7. Prepaid expenses

 
                           As at 30 June   As at 30 June   As at 31 December 
                                2019            2018              2018 
                                GBP             GBP               GBP 
------------------------  --------------  --------------  ------------------ 
 Other prepaid expenses       38,220          67,142            21,768 
------------------------  --------------  --------------  ------------------ 
                              38,220          67,142            21,768 
------------------------  --------------  --------------  ------------------ 
 

8. Cash and cash equivalents

Cash and cash equivalents comprises cash held by the Group and short term deposits held with various banking institutions. The carrying amount of these assets approximates their fair value.

9. Trade and other payables

 
 
                                As at 30 June     As at 30 June     As at 31 December 
                                     2019             2018                2018 
                                     GBP              GBP                 GBP 
-----------------------------  --------------  ----------------  -------------------- 
 Professional fees payable         76,426           14,734              44,177 
 Administration fees payable       37,295           64,045              36,509 
 Audit fees payable                37,967           18,844              26,080 
-----------------------------  --------------  ----------------  -------------------- 
 Total                             151,688          97,623              106,766 
-----------------------------  --------------  ----------------  -------------------- 
 

10. Consolidated share capital and share premium

 
                             As at 30 June   As at 30 June   As at 31 December 
                              2019                2018              2018 
 
 Authorised share capital         No.             No.               No. 
 Ordinary Shares of no 
  par value                    Unlimited       Unlimited         Unlimited 
--------------------------  --------------  --------------  ------------------ 
 Issued and fully paid            No.             No.               No. 
 Ordinary Shares of no 
  par value                   700,000,000     700,000,000       700,000,000 
--------------------------  --------------  --------------  ------------------ 
 
 
                          As at 30 June   As at 30 June   As at 31 December 
                               2019            2018              2018 
 
 Share premium account         GBP             GBP               GBP 
 Share premium account 
  upon issue               700,000,000     700,000,000       700,000,000 
 Less: Costs of issue     (11,060,597)    (11,060,597)      (11,060,597) 
 Closing balance           688,939,403     688,939,403       688,939,403 
-----------------------  --------------  --------------  ------------------ 
 

11. Net asset value per share attributable to the Company

Basic and Diluted

 
 
                        No. of Shares     Pence per Share 
-------------------  ----------------  ------------------ 
  30 June 2019          700,000,000           67.13 
  30 June 2018          700,000,000           86.76 
 
  31 December 2018      700,000,000           66.96 
 
 

12. 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 STC, 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. During the period, management fees of GBP2,117,179 (period ended 30 June 2018: GBP2,625,201 and year ended 31 December 2018: GBP5,077,000) had been paid by the Investment Partnership. No balance was outstanding at the period end (period ended 30 June 2018: GBPnil and year ended 31 December 2018: GBPnil).

Through to 26 December 2018, the sole member of Sherborne Investors (Guernsey) GP, LLC was Sherborne Investors LP, who also served as the Special Limited Partner of the Investment Partnership. Effective on 27 December 2018 the Special Limited Partner interest was transferred from Sherborne Investors LP to Sherborne Investors Limited, a wholly owned subsidiary of Sherborne Investors LP (Sherborne Investors (Guernsey) GP, LLC and Sherborne Investors Limited are the Non-controlling interests). 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, exceed a certain level of capital contributions to the Investment Partnership, excluding amounts contributed attributable to management fees.

For Turnaround investments, the incentive allocation is computed at 10% of the distributions to all Partners in excess of 110%, increasing to 20% of the distributions to all Partners in excess of 150% and increasing to 25% of the distributions to all Partners in excess of 200% of capital contributions, excluding amounts contributed attributable to management fees. An investment is considered a Turnaround investment when a member of the general partner is appointed chairman of, or accepts an executive role at, the STC.

If, after acquiring a shareholding, the share price of the STC 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 (in each case after deductions for any costs and expenses and for the Investment Partnership's Minimum Capital Requirements and subject to applicable law and regulation), rather than seeking to join the Board of Directors or otherwise engage with the STC (a "Stake Building Investment").

For Stake Building Investments, the incentive allocation is computed at 20% of net returns on the investment of the Investment Partnership, such amount to be payable after each partner in the Investment Partnership has had distributed to it an amount equal to its aggregate capital contribution to the Investment Partnership in respect to the Stake Building Investment (excluding any capital contributions attributable to management fees). The Special Limited Partner may waive or defer all or any part of any incentive allocation otherwise due.

At 30 June 2019, the incentive allocation has been computed based on a Stake Building Investment basis and amounts to GBPnil (30 June 2018: GBPnil and December 2018: GBPnil) in relation to the investment in Barclays.

Each of the Directors (other than the Chairman) receives a fee payable by the Company currently at a rate of GBP35,000 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 GBP50,000 per annum.

Individually and collectively, the Directors of the Company hold no shares in the Company as at 30 June 2019 (30 June 2018: nil and 31 December 2018: nil).

Sherborne Investors GP, LLC has granted to the Company a non-exclusive licence to use the name "Sherborne Investors" in the UK and the Channel Islands in the corporate name of the Company and in connection with the conduct of the Company's business affairs. The Company may not sub-licence or assign its rights under the Trademark Licence Agreement. Sherborne Investors GP, LLC receives a fee of GBP70,000 per annum for the use of the licenced name.

13. Financial risk factors

The Group's investment objective is to realise capital growth from investment in the STC, 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, or linked to, a STC. 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's cash and cash equivalents are placed in demand deposits with a range of financial institutions. The listed investment in Barclays could be redeemed relatively quickly (within 3 months) should the Group need to meet obligations or pay ongoing expenses as and when they fall due. Treasury gilts held could also be realised relatively quickly should additional cash resources be required.

The following table details the liquidity analysis for financial liabilities at the date of the Condensed Consolidated Statement of Financial Position:

 
                             Less than 
 As at 30 June 2019           1 month    1 - 12 months     Total 
                                GBP           GBP           GBP 
--------------------------  ----------  --------------  ---------- 
 Trade and other payables    (40,445)      (111,243)     (151,688) 
--------------------------  ----------  --------------  ---------- 
                             (40,445)      (111,243)     (151,688) 
--------------------------  ----------  --------------  ---------- 
 
 
                             Less than 
 As at 30 June 2018           1 month    1 - 12 months    Total 
                                GBP           GBP          GBP 
--------------------------  ----------  --------------  --------- 
 Trade and other payables    (64,734)      (32,889)      (97,623) 
--------------------------  ----------  --------------  --------- 
                             (64,734)      (32,889)      (97,623) 
--------------------------  ----------  --------------  --------- 
 
 
                             Less than 
 As at 31 December 2018       1 month    1 - 12 months     Total 
                                GBP           GBP           GBP 
--------------------------  ----------  --------------  ---------- 
 Trade and other payables    (36,967)      (69,799)      (106,766) 
--------------------------  ----------  --------------  ---------- 
                             (36,967)      (69,799)      (106,766) 
--------------------------  ----------  --------------  ---------- 
 

Credit risk

The Company is exposed to credit risk in respect of its cash and cash equivalents, Treasury gilts and derivative contracts, 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 mitigated through the Group depositing cash and cash equivalents across several banks. The credit risk associated with Treasury gilts and derivative contracts is monitored by reviewing the credit rating for the counterparty. The Group is exposed to credit risk in respect of its trade receivables and other receivable balances with a maximum exposure equal to the carrying value of those assets. UBS Financial Services Inc. currently has a stand alone credit rating of A- with Standard & Poor's (30 June 2018: A- with Standard & Poor's and 31 December 2018: A- with Standard & Poor's).

Market price risk

Market price risk arises as a result of the Group's exposure to the future values of the share price of the STC Company. It represents the potential loss that the Group may suffer through investing in the STC. Further information can be found in the Annual Report and Audited Consolidated Financial Statements of the Company for the year ended 31 December 2018.

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 equivalents. 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. The weighted average interest rate on the Treasury gilts is 2.75%.

 
 As at 30 June 
  2019                        Interest bearing 
                     ---------------------------------- 
                                    1 month    3 months 
                      Less than        to         to      Non- interest 
                        1 month     3 months    1 year       bearing         Total 
                         GBP          GBP        GBP           GBP            GBP 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Assets 
 Cash and cash 
  equivalents          8,545,306           -          -               -     8,545,306 
 Financial assets 
  at fair value 
  through profit 
  or loss                      -           -          -     441,571,407   441,571,407 
 Treasury gilts        9,928,349   9,888,592          -         194,198    20,001,139 
 Prepaid expenses              -           -          -          38,220        38,220 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Assets         18,473,655   9,888,592          -     441,803,825   470,166,072 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Liabilities 
 Trade and other 
  payables                     -           -          -       (151,688)     (151,688) 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Liabilities             -           -          -       (151,688)     (151,688) 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 
 
 As at 30 June 
  2018                        Interest bearing 
                     ---------------------------------- 
                                    1 month    3 months 
                      Less than        to         to      Non- interest 
                        1 month     3 months    1 year       bearing         Total 
                         GBP          GBP        GBP           GBP            GBP 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Assets 
 Cash and cash 
  equivalents         29,432,960           -          -               -    29,432,960 
 Financial assets 
  at fair value 
  through profit 
  or loss                      -           -          -     578,035,045   578,035,045 
 Prepaid expenses              -           -          -          67,142        67,142 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Assets         29,432,960           -          -     578,102,187   601,535,147 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Liabilities 
 Trade and other 
  payables                     -           -          -        (97,623)      (97,623) 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Liabilities             -           -          -        (97,623)      (97,623) 
-------------------  -----------  ----------  ---------  --------------  ------------ 
 
 
 As at 31 December 
  2018                                Interest bearing 
                             ---------------------------------- 
                                            1 month    3 months 
                              Less than        to         to      Non- interest 
                                1 month     3 months    1 year       bearing         Total 
                                 GBP          GBP        GBP           GBP            GBP 
---------------------------  -----------  ----------  ---------  --------------  ------------ 
 Assets 
 Cash and cash equivalents    28,521,320           -          -               -    28,521,320 
 Financial assets 
  at fair value through 
  profit or loss                       -           -          -     440,387,201   440,387,201 
 Prepaid expenses                      -           -          -          21,768        21,768 
---------------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Assets                 28,521,320           -          -     440,408,969   468,930,289 
---------------------------  -----------  ----------  ---------  --------------  ------------ 
 Liabilities 
 Trade and other 
  payables                             -           -          -       (106,766)     (106,766) 
---------------------------  -----------  ----------  ---------  --------------  ------------ 
 Total Liabilities                     -           -          -       (106,766)     (106,766) 
---------------------------  -----------  ----------  ---------  --------------  ------------ 
 
 

As at 30 June 2019, the total interest sensitivity gap for interest bearing items was a surplus of GBP28,362,247 (30 June 2018: surplus of GBP29,432,960 and 31 December 2018: surplus of GBP28,521,320).

As at 30 June 2019, interest rates reported by the Bank of England were 0.75% which would equate to income of GBP212,717 (period ended 30 June 2018: GBP147,165 and year ended 31 December 2018: GBP213,910) per annum if interest bearing assets remained constant. If interest rates were to fluctuate by 25 basis points, this would have a positive or negative effect of GBP70,906 (period ended 30 June 2018: GBP73,582 and year ended 31 December 2018: GBP71,303) 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 2019, the Group is not subject to any external capital requirement.

The Board of Directors believe that at the date of the Condensed Consolidated Statement of Financial Position there were no material risks associated with the management of the Company's capital.

14. Distributions

No distributions were paid by the Group to Non-controlling interests during the period (period ended 30 June 2018: GBPnil and year ended 31 December 2018: GBPnil).

15. Subsequent events

Since 30 June 2019, the share price of Barclays has decreased from 149.80 pence to 139.82 pence as at 16 August 2019. If this share price was used to value the investment at 30 June 2019, it would have resulted in a decrease in the closing fair value from GBP441.6 million to GBP416.5 million. The Investment Manager advises the Company that the current estimated NAV is approximately GBP450.8 million, or 64.4 pence per share.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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