TIDMCSUZ
RNS Number : 1965I
Close UK Index Growth Fund 2012
09 June 2011
CLOSE ASSETS FUNDS LIMITED
ANNOUNCEMENT OF ANNUAL RESULTS
The directors announce the statement of results for the year
ended 31 March 2011 as follows:-
ABOUT THE COMPANY
Close Assets Funds Limited is a Guernsey incorporated, closed
ended, umbrella investment company. Its issued share capital
comprises two Management Shares issued for administrative reasons,
35,625,000 Zero Dividend Shares ("Shares") of the Close UK Index
Growth Fund 2012 and 39,375,000 Nominal Shares. The Company has an
unlimited life but the Shares are expected to be redeemed in
December 2012.
INVESTMENT OBJECTIVE AND POLICY - CLOSE UK INDEX GROWTH FUND
2012 (THE "FUND")
The investment objective of the Fund is to provide Shareholders
with a geared capped exposure to the performance of the FTSE 100
Index (the "Index").
If Shareholders hold their Shares to December 2012 (the
"Redemption Date"), and the End Value of the Index is higher than
the Start Value, the Shares are designed to pay to Shareholders, on
the Redemption Date, the Final Capital Entitlement, which
represents a return equal to four times the percentage increase in
the Index capped at 64 per cent of the Issue Price of GBP1.4864 per
Share.
The Final Capital Entitlement will comprise:
(a) a Capital Amount of GBP1.4864 per Share; and
(b) a Growth Amount per Share equal to four times any increase
in the End Value of the Index relative to its Start Value of
6,160.30, such percentage being applied to the Issue Price of
GBP1.4864 per Share, subject to a maximum increase of 64 per cent
of the Issue Price.
If Shareholders hold their Shares until the Redemption Date and
the End Value is lower than the Start Value, the Shares are
designed to repay the Issue Price of GBP1.4864 per Share on the
Redemption Date provided that the value of the Index had not fallen
below 3,080.15, being 50 per cent of the Start Value at close of
business, on any Index Business Day between the Start Date of 22
November 2006 and the End Date of 22 November 2012 (both dates
inclusive).
If Shareholders hold their Shares until the Redemption Date and
if the value of the Index has fallen below 3,080.15, being 50 per
cent of the Start Value, at close of business on any Index Business
Day between the Start Date and the End Date (an "Index Barrier
Breach") and the End Value is not at least equal to the Start
Value, investors will be repaid on the Redemption Date the Issue
Price as reduced by the same percentage by which the End Value is
less than the Start Value. As at 31 March 2011 and as at the date
of this report the level of the Index had not fallen below
3,080.15.
In accordance with the Company's investment policy for the Fund,
the net proceeds derived by the issue of Zero Dividend Shares and
the sale of a put option to J.P. Morgan Chase Bank N.A. with a
maturity date of 22 November 2012 (the "Put Option") have been
invested in a portfolio of debt securities containing embedded
derivatives related to the Index ("Debt Securities") at prices
relative to the value of the Index on 22 November 2006 of
6,160.30.
The Debt Securities were issued by financial institutions,
selected by the Manager, that, at the date of issue of the relevant
debt security, had a rating of at least A- or A3, as determined by
Standard & Poor's Ratings Group ("S&P") and/or Moody's
Investor Services Inc. ("Moodys") respectively and was either (a) a
credit institution as defined in Article 1 of the Council Directive
of 20 March 2000 relating to the taking up and pursuit of the
business of credit institutions (No. 2000/12/EC), other than an
institution referred to in Article 2(3) of that Directive, if
authorised by the competent authority of an EU Member State in
relation to the credit institution concerned; (b) a bank authorised
in a Member State of the European Economic Area; or (c) a bank
authorised by a signatory state (other than an EU Member State or a
Member State of the European Economic Area) to the Basle Capital
Convergence Agreement of July 1988 (Switzerland, Canada, Japan and
the US); or (d) an insurance undertaking, insurance holding company
or mixed-activity insurance holding company as defined in Article 1
of the Council Directive of 27 October 1998 relating to the
supplementary supervision of insurance undertakings in an insurance
group (No. 98/78/EC).
To avoid over-dependency on any single issuer, the Company for
the account of the Fund acquired six debt securities. It is not
anticipated that this portfolio of Debt Securities will be varied
prior to the maturity date of the Debt Securities other than in
exceptional circumstances.
Your attention is drawn to the Schedule of Investments of this
annual financial report, which shows the assets held by the Company
for the account of the Fund, and note 12(b) to the financial
statements, which refers to the credit risk of the issuers of these
assets as at the end of the reporting period and as at the date of
this report.
In the event of a default by an issuer of a debt security the
Company for the account of the Fund would rank as an unsecured
creditor in respect of sums due from the issuer of such debt
security. In such event, the Company, for the account of the Fund,
may (in respect of that debt security) receive a lesser amount (if
any) and at a different time than the proceeds anticipated at the
maturity of the relevant debt security. Any losses would be borne
by the Company for the account of the Fund and returns to
Shareholders would be significantly adversely affected.
The Company has for the account of the Fund also sold a Put
Option, the proceeds of which sale were used to increase the amount
of money available to finance the acquisition of the Debt
Securities. The performance of the Put Option is linked to the
performance of the Index. At an Index value of 6,160.30 or above at
the close of business on 22 November 2012, or if the Index has
never closed below 3,080.15 during the calculation period from 22
November 2006 to 22 November 2012 (the "Calculation Period"), the
Put Option will be worth GBPNil at maturity. If the Index has
closed below 3,080.15 over the Calculation Period and the Index is
still below 6,160.30 on 22 November 2012, the Put Option will be
worth a percentage of the notional value, being GBP52,953,000,
equivalent to the percentage fall in the level of the Index over
the Calculation Period, such payment payable to J.P. Morgan Chase
Bank N.A. by the Company on behalf of the Fund.
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2011
At launch, the net proceeds derived from the issue of Shares of
the Fund were invested in a portfolio of debt securities and
options at a price based on the level of the FTSE 100 Index at the
close of business on 22 November 2006 (the Index Start Date),
namely 6,160.30.
On 31 March 2011, the FTSE 100 Index closed at 5,908.76, a fall
of 4.1 per cent since launch and a rise of 4.0 per cent. over the
reporting period. The total market value of the Fund fell by 4.3
per cent. since launch and rose 7.2 per cent. over the reporting
period. As at the reporting date the Shares of the Fund were
trading at a 7.7 per cent. discount to net asset value.
As the Fund's investment portfolio is based upon the Index, it
is possible to show the potential Final Capital Entitlements
available to holders of Shares based on the closing level of the
Index on the End Date of 22 November 2012. These figures are for
illustrative purposes only, subject to there being no counterparty
default, and do not represent forecasts or take into account any
unforeseen circumstances.
As at 22 November 2012:
Final Capital Entitlement Final Capital Entitlement
if FTSE 100 Index if FTSE 100 Index
Final FTSE 100 Index never closes below has closed below
Level ^ 3080.15** 3080.15**
3000 N/A 72.38
3250 148.64 78.41
3500 148.64 84.45
3750 148.64 90.48
4000 148.64 96.51
4250 148.64 102.54
4500 148.64 108.57
4750 148.64 114.61
5000 148.64 120.64
5250 148.64 126.67
5500 148.64 132.70
5750 148.64 138.73
5908.76* 148.64 142.57
6000 148.64 144.77
6250 157.29 157.29
6500 181.42 181.42
6750 205.55 205.55
7000 209.68 209.68
7250 or over 243.76 243.76
^ As at 22 November 2012
* FTSE 100 Index level at the end of the reporting period
** On any day from 22 November 2006 to 22 November 2012
Given the well-documented problems which have affected various
financial institutions around the world and the need for government
bail-outs it is worth commenting on the assets held by the Company.
Your attention is drawn to the Schedule of Investments in this
Annual Financial Report which shows the assets held by the Company
and note 12b of this Annual Financial Report which refer to the
credit risk of the issuers of these assets as at the period
end.
The Company currently holds six debt securities, the issuers of
which, as at the date of this report, have credit ratings ranging
from Aa3 to Ba3 by Moodys and from A+ to BB+ by S&P
respectively.
Of particular interest, the Company holds a debt security issued
by Irish Life & Permanent ("IL&P") with a nominal value of
GBP8,800,000 and a fair value, as at the reporting date, of
GBP7,811,558. This represented 14.21 per cent. of the value of the
Company's net assets as at the reporting date.
Shareholders will be aware of the deteriorating situation in
Ireland which has forced the Irish Government to request
contingency funding from the EU/IMF, leading to its sovereign
rating being lowered by S&P to BBB+ and to Baa3 by Moodys. On
31 March 2011, the Central Bank of Ireland published the outcome of
its review of capital and funding requirements for the domestic
Irish banks, including IL&P. The review identified a gross
capital requirement of c.EUR4.0bn for the banking business of
IL&P. IL&P announced that it will increase its capital in
part through the sale of its life and pensions and investment
management businesses. In addition to IL&P's capital raisings,
the group has been advised that as it is of systemic importance to
the Irish economy, the Government will support its further capital
requirements as necessary, which will likely be c.EUR2.3bn. Moodys
highlighted that the Irish Government has indicated that burden
sharing with senior unsecured debt holders is not part of this
recapitalisation and that the capital increase is a clear credit
positive for the banks. As a result of the above factors, in
particular the sovereign downgrade, IL&P has been further
downgraded by S&P to BB+ and to Ba3 by Moodys.
The Board monitors credit risk and will consider further action
if the credit rating of an issuer falls below A- or A3 as ranked by
S&P and Moodys respectively. As a result of the rating agencies
actions, the Board considered both the sale and the retention of
the IL&P debt security, acting in the best interests of the
Company and its shareholders.
The Board reviewed recent research updates from the ratings
agencies and also considered how the Final Capital Entitlement of
the Shares might be affected by any sale of the IL&P debt
security and noted that there could be a significant cost involved,
resulting in an irreversible reduction in the possible returns to
the Company's shareholders. On the basis of the prevailing facts
and the options available to the Board, the Board therefore
concluded that it would not be in the best interests of the Company
and shareholders to sell the IL&P debt security at this time
but will continue to monitor the situation.
The Company also holds a debt security issued by SNS Bank N.V
("SNS") with a nominal value of GBP8,800,000 and a fair value, as
at the reporting date, of GBP9,884,951. This represented 17.98 per
cent. of the value of the Company's net assets as at the reporting
date. On 5 April 2011 Moodys downgraded the long-term senior debt
rating of SNS one notch to Baa1 from A3, and assigned a stable
outlook. Moodys rating action was triggered by the risks resulting
from the wind-down of SNS Property Finance, which the bank placed
in run-off in 2009. Moodys commented that "while we believe the
bulk of associated credit losses are likely to be behind the bank,
we believe that there is still material uncertainty around the
ultimate losses and we anticipate continued pressure on the bank's
earnings in the short-to-medium term."
The Board monitors credit risk and will consider further action
if the credit rating of an issuer falls below A- or A3 as ranked by
S&P and Moodys respectively. As a result of the rating agencies
actions, the Board considered both the sale and the retention of
the SNS debt security, acting in the best interests of the Company
and its shareholders.
The Board reviewed recent research updates from the ratings
agencies and also considered how the Final Capital Entitlement of
the Shares might be affected by any sale of the SNS debt security
and noted that there could be a significant cost involved,
resulting in an irreversible reduction in the possible returns to
the Company's shareholders. On the basis of the prevailing facts
and the options available to the Board the Board therefore
concluded that it would not be in the best interests of the Company
and shareholders to sell the SNS debt security at this time, but
will continue to monitor the situation.
In the event of a default by an issuer of a debt security
purchased by the Company, the Company would rank as an unsecured
creditor in respect of sums due from the issuer of such debt
security. In such event, the Company may (in respect of that debt
security) receive a lesser amount (if any) and at a different time
than the proceeds anticipated at the maturity of the debt security.
Any losses would be borne by the Company and returns to
Shareholders would be significantly adversely affected.
Since the financial year end, the FTSE 100 Index has fallen
slightly by 1.7% to 5,808.89 (as at 8 June 2011) which is towards
the lower end of its recent trading range. Recent data suggest
economic growth has slowed as government cuts dampen confidence. If
this proves to be merely a soft patch in the economic recovery and
growth returns to its previous pace the Index could benefit from a
commensurate boost in sentiment.
The Board believes the shares continue to offer an attractive
performance profile based on the level of the Index.
Richard de la Rue
Chairman
9 June 2011
MANAGEMENT REPORT FOR THE YEAR ENDED 31 MARCH 2011
A description of important events that have occurred during the
financial year, their impact on the performance of the Company as
shown in the financial statements and a description of the
principal risks and uncertainties facing the Company is given in
the Chairman's Statement, Manager's Report and the notes to the
financial statements and is incorporated here by reference.
Going Concern
The Company for the account of the Fund currently holds six debt
securities, the issuers of which, as at the date of this report,
all have investment grade credit ratings ranging from Aa3 to Ba3 by
Moodys and from A+ to BB+ by S&P. Of particular interest,
IL&P's senior and dated subordinated debt is now guaranteed by
the Irish Government for maturities before 29 September 2010.
However the relevant debt security held by the Company for the
account of the Fund matures after 29 September 2010. Therefore, the
appropriate Moodys' and S&P ratings for this debt as at the
date of this report are Ba3 and BB+ respectively.
The Company also holds a debt security issued by SNS. On 5 April
2011 the long-term senior debt rating of SNS was downgraded by
Moodys to Baa1. The Board monitors credit risk and may consider
further action if the credit rating of an issuer falls below A3 or
A- as ranked by Moodys and S&P respectively. As a result of the
rating agencies actions and the recent downgrade of the debt
securities issued by SNS and IL&P, the Board considered both
the sale and the retention of these debt securities. After
reviewing the research updates from the rating agencies and
reviewing how the Final Capital Entitlement may be affected by the
sale of the debt securities and the options available to it, the
Board concluded that it would not be in the best interests of the
Company and shareholders to sell the these two debt securities at
this time. The Board resolves to continue to monitor the
situation.
In the event of a default by an issuer of a debt security
purchased by the Company for the account of the Fund, the Company
for the account of the Fund would rank as an unsecured creditor in
respect of sums due from the issuer of such debt security. In such
event, the Company for the account of the Fund may (in respect of
that debt security) receive a lesser amount (if any) and at a
different time than the proceeds anticipated at the maturity of the
debt security. Any losses would be borne by the Company for the
account of the Fund and returns to Shareholders would be
significantly adversely affected.
As disclosed in the section headed "Investment Objective and
Policy" above, the Company has sold a Put Option to J.P. Morgan
Chase Bank N.A. (the "Put Option Counterparty"). As the Company's
contingent liability under the Put Option sold to the Put Option
Counterparty will not crystallise until the Put Option's scheduled
maturity date of 22 November 2012, and as such contingent liability
would be based on the level of the Index on that date, the
directors do not consider that such contingent liability would
result now in the insolvency of the Company. In addition, unless
the Index closes below 3,080.15 during the calculation period from
22 November 2006 to 22 November 2012, the Put Option will expire
worthless.
As disclosed in Note 12(c) to the financial statements, upon the
issue of Shares in November 2006 the Company created a cash reserve
(the "Expense Provision") in the amount of 2.1 per cent of the
amount raised by the issue of such shares (the "Initial Gross
Proceeds") plus GBP500,000, such amount being estimated in the
opinion of the directors upon the advice of the Manager and the
Administrator to be sufficient to meet the operating expenses
reasonably expected to be incurred over the life of the Fund.
The performance of the investments held by the Company for the
account of the Fund over the reporting period and the outlook for
the future are described in the Chairman's Statement and the
Manager's Report. The Company's financial position, its cash flows
and liquidity position are set out in the financial statements and
the Company's financial risk management objectives and policies,
details of its financial instruments and its exposures to market
price risk, credit risk, liquidity risk, interest rate risk and
currency risk are set out in Note 12 to the financial
statements.
After making enquiries, 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 the going concern basis in preparing this annual
financial report.
Responsibility Statement
The Board of directors jointly and severally confirm that, to
the best of their knowledge:
(a) The financial statements, prepared in accordance with
International Financial Reporting Standards, give a true and fair
view of the assets, liabilities, financial position and net gain of
the Company; and
(b) This Management Report includes or incorporates by reference
a fair review of the development and performance of the business
and the position of the Company, together with a description of the
principal risks and uncertainties that it faces.
Richard de la Rue Nicholas Falla
Director Director
09 June 2011
MANAGER'S REPORT FOR THE YEAR ENDED 31 MARCH 2011
Market Review
The FTSE 100 Index rose 4.0 per cent. over the financial year to
31 March 2011, consolidating the recovery from the global financial
crisis and recession.
Over the first month of the period the Index hovered around
5,750 in the run up to the UK general elections. Between mid April
and the end of June 2010 the Index fell by over 800 points as
concerns over the size of Greece's sovereign debt pushed Greek
yields to unsustainable levels leading to speculation it would be
forced to default on its debt or even exit the Euro. The potential
contagion effect on other weak Euro countries and banks holding
Greek bonds led to the European Union undertaking various special
measures to try to contain the crisis which gave a short-term boost
to the Index before it fell to its lowest level of the period after
manufacturing growth slowed in China and the US.
A slew of positive earnings announcements helped the Index to
recover some of its losses in early July, after which the Index
struggled to find any clear direction up to the end of August as
fears of a European debt crisis resurfaced and mixed economic data
were set against strong corporate results.
The last four months of the calendar year saw the Index rising
at an impressive rate as improving global economic data prompted
the Index to begin climbing in early September and was further
supported when the US Federal Reserve confirmed another $600
billion of quantitative easing. The Index fell back somewhat in
November as the ongoing European debt crisis intensified driving
the spread between Irish and German bond yields to record levels
before a year end rally boosted the Index above 6,000 for the first
time since the start of the global economic crisis in 2008.
The Index then traded in a tight band around 6,000 for the next
two months before the Japanese earthquake and tsunami disaster
prompted markets to fall some 400 points. This was quickly reversed
as the economic implications were judged to be relatively minor and
the Index closed at 5,908.76 for the financial year.
Over the period the biggest drag on the Index was BP (-27 per
cent) whose shares tumbled over the costs of the explosion and
resulting oil spill and environmental disaster in the Gulf of
Mexico. The largest boost to the Index was from BG Group plc, whose
shares rose 36 per cent. over the period as commodity prices rose
sharply.
Market Outlook
In its recent economic survey of the United Kingdom the
Organisation for Economic Co-operation and Development (OECD) noted
that "The UK economy emerged from the 2008-09 recession with
elevated public and private debt and high unemployment. Strong
growth and macroeconomic stability in the run-up to the crisis had
hidden a build-up of significant imbalances, influenced by over
reliance on debt-finance and the financial sector, and booming
asset prices. These imbalances need to be addressed to ensure a
sustainable and balanced recovery. The government is pursuing a
necessary and wide ranging programme of fiscal consolidation and
structural reforms aimed at achieving stronger growth and a
rebalancing of the economy over time."
The fiscal consolidation consists mainly of raising taxes and
reducing government spending and jobs which may lower growth in the
short-term as consumption falls. The Bank of England's ("BoE")
expansionary monetary policy has helped offset this headwind by
keeping interest rates at the historic low of 0.5 per cent for over
two years and undertaking GBP200 billion of quantitative
easing.
Soaring commodity prices together with the depreciation in
sterling's value have seen inflation running consistently well
above the BoE's 2 per cent target, leading to increased pressure
for it to start raising rates. So far the BoE has resisted this
pressure as it views the elevated inflation rate to be caused
largely by temporary and external factors which should abate.
Current market expectations are for the BoE to start raising rates
later in the financial year, by which time it is hoped the recovery
will have become more self-sustained and able to withstand tighter
monetary conditions.
Close Investments Limited
9 June 2011
STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March
2011
1 Apr 2010 1 Apr 2009
to to
31 Mar 2011 31 Mar 2010
Notes GBP GBP
Net movement in unrealised appreciation
on
investments 5 1,056,589 9,242,713
Net movement in unrealised depreciation
on Put
Option 3,256,962 12,880,998
Operating expenses 2 (317,411) (316,428)
------------ ------------
Net gain for the year attributable
to shareholders 3,996,140 21,807,283
------------ ------------
Other Comprehensive Income - -
------------ ------------
Total Comprehensive Income 3,996,140 21,807,283
------------ ------------
Pence Pence
Earnings per Share for the year
- Basic and Diluted 4 11.22 61.21
In arriving at the results for the financial year, all amounts
above relate to continuing operations.
There are no recognised gains or losses for the year other than
those disclosed above.
Reconciliation of earnings per Share for investment purposes to
earnings per Share per the financial statements:
1 Apr 2010 1 Apr 2009
to to
31 Mar 2011 31 Mar 2010
Pence Pence
Earnings per Share for investment
purposes 11.36 61.35
Adjustment for amortisation of debt
issue costs (0.14) (0.14)
Earnings per Share per the financial
statements 11.22 61.21
In accordance with International Financial Reporting Standards
("IFRS"), expenses should be attributable to the period to which
they relate.
The earnings per Share for investment purposes represents the
earnings per Share attributable to shareholders in accordance with
the Prospectus, which recognises all expenses of the Company up to
and including the date that the Final Capital Entitlement
becomes payable.
STATEMENT OF FINANCIAL POSITION as at 31 March 2011
31 Mar 2011 31 Mar 2010
Notes GBP GBP
NON CURRENT ASSETS
Unquoted financial assets designated
as at fair value
through profit or loss 5 57,729,785 56,673,196
------------ ------------
CURRENT ASSETS
Receivables 6 98,785 148,887
Cash and cash equivalents 650,706 924,896
------------ ------------
749,491 1,073,783
CURRENT LIABILITIES
Payables - due within one year 7 216,548 223,429
------------ ------------
NET CURRENT ASSETS 532,943 850,354
TOTAL ASSETS LESS CURRENT LIABILITIES
(excluding net assets attributable
to
shareholders) 58,262,728 57,523,550
NON CURRENT LIABILITIES
Payables - due after one year (excluding
net assets
attributable to shareholders) 8 3,272,224 6,529,186
------------ ------------
NET ASSETS ATTRIBUTABLE TO
SHAREHOLDERS 54,990,504 50,994,364
------------ ------------
ZERO DIVIDEND SHARES IN ISSUE 35,625,000 35,625,000
Pence Pence
NAV PER ZERO DIVIDEND SHARE 154.36 143.14
Reconciliation of NAV per Share for investment purposes to NAV
per Share per the financial statements:
31 Mar 2011 31 Mar 2010
Pence Pence
NAV per Zero Dividend Share for investment
purposes 154.12 142.76
Adjustment for debt issue costs 0.24 0.38
NAV per Zero Dividend Share per the
financial statements 154.36 143.14
In accordance with IFRS, expenses should be attributed to the
period to which they relate.
The NAV per Share for investment purposes represents the NAV per
Share attributable to shareholders in accordance with the
Prospectus, which recognises all expenses of the Company up to and
including the date that the Final Capital Entitlement becomes
payable.
The financial statements were approved by the Board of directors
and authorised for issue on 9 June 2011 and are signed on its
behalf by:
Richard de la Rue Nicholas Falla
Director Director
STATEMENT OF CASH FLOWS for the year ended 31 March 2011
1 Apr 2010 1 Apr 2009
to to
31 Mar 2011 31 Mar 2010
GBP GBP
OPERATING ACTIVITIES
Net gain for the year attributable
to shareholders 3,996,140 21,807,283
Unrealised appreciation on investments (1,056,589) (9,242,713)
Unrealised depreciation on value of
Put Option (3,256,962) (12,880,998)
Interest received (3,110) (1,169)
Amortisation of debt issue costs 50,081 50,081
Less: Decrease in accrued expenses (6,881) (31,670)
Add: Decrease / (increase) in prepayments
and
accrued income excluding debt issue
costs 21 (4,093)
------------ -------------
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (277,300) (303,279)
------------ -------------
INVESTING ACTIVITIES
Interest received 3,110 1,169
------------ -------------
NET CASH INFLOW FROM INVESTING ACTIVITIES 3,110 1,169
------------ -------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 924,896 1,227,006
Decrease in cash and cash equivalents (274,190) (302,110)
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR 650,706 924,896
------------ -------------
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO
SHAREHOLDERS
for the year ended 31 March 2011
TOTAL TOTAL
1 Apr 2010 1 Apr 2009
to to
31 Mar 2011 31 Mar 2010
GBP GBP
Opening balance 50,994,364 29,187,081
Net gain for the year attributable
to Zero Dividend
Shareholders 3,996,140 21,807,283
------------- -------------
Closing balance 54,990,504 50,994,364
------------- -------------
NOTES TO THE FINANCIAL STATEMENTS as at 31 March 2011
1. ACCOUNTING POLICIES
The significant accounting policies adopted by the Company are
as follows:
(a) Basis of Preparation and Going Concern
The financial statements have been prepared in conformity with
IFRS; which comprise standards and interpretations approved by the
International Accounting Standards Board ("IASB") and International
Financial Reporting Interpretations Committee ("IFRIC") and
applicable Guernsey law. The financial statements have been
prepared on an historical cost basis except for the measurement at
fair value of financial instruments.
Changes in accounting policy and disclosures
The following Standards or Interpretations have been adopted in
the current year. Their adoption has not had any impact on the
amounts reported in these financial statements and is not expected
to have any impact on future financial periods.
IFRS 8 Operating Segments (amendments)
IAS 1 Presentation of Financial Statements (amendments)
IAS 7 Statement of Cash Flows (amendments)
IAS 39 Financial Instruments: Recognition and Measurement
(amendments)
The following Standards or Interpretations have been issued by
the International Accounting Standards Board but not yet adopted by
the Company
IFRS 7 Financial Instruments: Disclosures effective for annual
periods beginning on or after 1 July 2011.
IFRS 9 Financial Instruments: Classification and Measurement
effective for annual periods beginning on or after 1 January
2013.
The Directors have considered the above and are of the opinion
that the above Standards and Interpretations are not expected to
have a material impact on the Company's financial statements except
for the presentation of additional disclosures and changes to the
presentation of components of the financial statements. These items
will be applied in the first financial period for which they are
required.
(b) Taxation
The Company has been granted exemption under the Income Tax
(Exempt Bodies) (Guernsey) Ordinance, 1989 from Guernsey Income
Tax, and is charged an annual fee of GBP600.
(c) Expenses
All expenses are accounted for on an accruals basis.
(d) Debt issue costs
The debt issue costs incurred amounted to GBP300,760. Because
the Zero Dividend Shares of Fund 2012 are redeemable on or around
22 November 2012, they are required to be classified as debt
instruments under IAS 32. Consequently, issue costs are required to
be amortised over the life of the instrument.
(e) Interest Income
Interest income is accounted for on an accruals basis.
(f) Cash and Cash equivalents
Cash at bank and short term deposits which are held to maturity
are carried at cost. Cash and cash equivalents are defined as call
deposits, short term deposits and highly liquid investments readily
convertible to known amounts of cash and subject to insignificant
risk of changes in value. For the purposes of the Statement of Cash
Flows, cash and cash equivalents consist of cash and deposits at
bank.
(g) Investments
All investments are designated as financial assets at "fair
value through profit and loss". Investments are initially
recognised on the date of purchase at cost, being the fair value of
the consideration given, excluding transaction costs associated
with the investment. After initial recognition, investments are
measured at fair value, with unrealised gains and losses on
investments and impairment of investments recognised in the
Statement of Comprehensive Income.
Fair value is the amount for which the financial instruments
could be exchanged, or a liability settled, between knowledgeable
willing parties in an arms length transaction. Fair value also
reflects the credit quality of the issuers of the financial
instruments.
Valuations of the investments are based on valuations provided
to the Company by Future Value Consultants Limited (the
"Calculation Agent"). These valuations are intended to be an
indication of the fair value of the Company's investments,
including an issuer's credit risk, designed to reflect the best
estimation of the price at which they could be sold, even though
there is no guarantee that a willing buyer might be found if the
Company on behalf of the Fund chose to sell the relevant
investment.
The indicative fair values of the investments are based on an
approximation of the market level of the investments. As the
investments are not traded in an active market, the indicative fair
value is determined by using valuation techniques. The Calculation
Agent uses a variety of methods and makes assumptions that are
based on market conditions existing at the reporting date.
Valuation techniques used may include the use of comparable
recent arm's length transactions (where available), discounted cash
flow analysis, option pricing models and other valuation techniques
commonly used by market participants.
Models use observable data, to the extent practicable. However,
areas such as credit risk, volatilities and correlations require
the Calculation Agent to make estimates. Changes in assumptions
about these factors could affect the reported fair value of
financial instruments.
Different assumptions regarding these factors, combined with
different valuation techniques and models used, could lead to
different valuations of the financial instruments produced by
different parties. As at the reporting date, valuation data for the
Debt Securities, provided by J.P. Morgan Securities Limited was
GBP3,027,064 (2010: GBP2,444,582) higher than that provided by the
Calculation Agent.
Being cognisant of current market conditions, the Company
believes that the valuations provided by the Calculation Agent
comply with the definition of fair value as defined by IFRS and are
more appropriate.
The investments will be derecognised on their redemption date.
Gains and losses on the sale of investments will be taken to the
Statement of Comprehensive Income.
(h) Put Option
The Put Option was initially recognised at the fair value of the
consideration received on the date of sale, and included within
Payables falling due after more than one year. After initial
recognition, the Put Option is measured at fair value with
unrealised gains and losses being recognised in the Statement of
Comprehensive Income. The Put Option will be derecognised at
maturity on 22 November 2012.
(i) Trade Date Accounting
All "regular way" purchases and sales of financial assets are
recognised on the "trade date", i.e. the date that the entity
commits to purchase or sell the asset. Regular way purchases or
sales are purchases or sales of financial assets that require
delivery of the asset within the time frame generally established
by regulations or convention in the market place.
(j) Segmental Reporting
The directors are of the opinion that the Company is engaged in
a single segment of business, being investment business in the
United Kingdom.
(k) Going Concern
After making enquiries, the directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. The directors
believe the Company is well placed to manage its business risks
successfully despite the current economic climate. Accordingly, the
directors have adopted the going concern basis in preparing the
financial information.
2. OPERATING EXPENSES
TOTAL TOTAL
1 Apr 2010 1 Apr 2009
to to
31 Mar 2011 31 Mar 2010
GBP GBP
Amortisation of debt issue
costs 50,081 50,081
Investment management fees
(1) 185,335 185,335
Administration fees 24,500 24,500
Broker fees 12,232 11,214
Directors' remuneration 20,558 21,000
Registration fees 7,784 7,799
Annual fees 16,439 17,618
Directors' and Officers'
insurance 11,875 11,300
Audit fee 10,000 9,000
Printing and stationery 5,790 5,465
Sundry costs 2,280 3,234
Other operating expenses (26,353) (28,949)
------------ ------------
320,521 317,597
Less: Bank interest income (3,110) (1,169)
------------ ------------
317,411 316,428
------------ ------------
(1) The Manager is entitled to receive a fee from the Company at
an annual rate of 0.35% of the Initial Gross Proceeds of Fund
2012.
3. DIRECTORS' REMUNERATION
The prospectus for Close UK Index Growth Fund 2012 provided that
each director would be paid a basic fee of GBP5,000 per annum and
an additional fee of GBP3,000 per annum for the Close US Index
Growth Fund 2007. Following the maturity of Close US Index Growth
Fund 2007 the Board resolved that each director be paid an annual
fee of GBP7,000 per annum, such rate to be effective 1 April 2007.
In order that there be no risk that the interests of shareholders
in Fund 2012 might be impacted by this increase in directors' fees,
the Manager undertook to increase the amount of its contingent
rebate by GBP6,000 per annum and by GBP36,000 in the last financial
period preceding the Redemption Date.
4. EARNINGS PER SHARE
Earnings per Share is based on the net gain for the year
attributable to Shareholders of GBP3,996,140 (2010: GBP21,807,283)
and on 35,625,000 (2010: 35,625,000) Shares, being the weighted
average number of Shares in issue during the year. There are no
dilutive instruments and therefore basic and diluted earnings per
Share are identical.
5. INVESTMENTS
UNQUOTED FINANCIAL ASSETS TOTAL TOTAL
DESIGNATED AS AT FAIR VALUE 31 Mar 2011 31 Mar 2010
THROUGH PROFIT OR LOSS GBP GBP
Opening portfolio cost 52,953,000 52,953,000
Unrealised appreciation / (depreciation)
on
valuation brought forward 3,720,196 (5,522,517)
Unrealised appreciation on
valuation for the
year 1,056,589 9,242,713
------------ ------------
Unrealised appreciation on
valuation carried
forward 4,776,785 3,720,196
Closing valuation 57,729,785 56,673,196
------------ ------------
Valuations of investments are based on valuations provided by
the Calculation Agent. The provided valuations are derived from
proprietary models based upon well-recognised financial principles
and reasonable estimates about relevant future market
conditions.
To comply with the definition of fair value as defined by IFRS,
the Calculation Agent was engaged to provide valuations of the
investments, taking account of the current counterparty credit risk
of the issuers of the Debt Securities held by the Company for the
account of the Fund. Details of the quantitative effect of using
different valuation providers compared to the previous year are
given in note 1(g).
IFRS 7 requires the fair value of investments to be disclosed by
the source of inputs, using a three-level hierarchy as detailed
below:
Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1);
Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices) (Level 2);
Inputs for the asset or liability that are not based on
observable market data (unobservable inputs) (Level 3).
All Debt Securities held by the Company for the account of the
Fund have been classified as Level 2 in accordance with the fair
value hierarchy. There have been no transfers between Level 1 and
Level 2 of the fair value hierarchy during the year.
The Debt Securities in the Close UK Index Growth Fund 2012's
portfolio are Sterling-denominated non-coupon and non-interest
bearing medium term notes linked to the FTSE 100 Index. They carry
a maximum redemption amount of 164 per cent of their principal
amount which will be payable provided the FTSE 100 Index rises by
16% or more between 22 November 2006 and November 2012 (the
"Calculation Period"). For each percentage point rise in the FTSE
100 Index up to a maximum of 16% over the Calculation Period the
maximum redemption amount will be increased by approximately four
per cent, subject to a maximum increase of 64%.
In the event that the FTSE 100 Index falls over the Calculation
Period, the Debt Securities are designed to return 100% of their
principal amount.
Valuation data provided by the Calculation Agent to the Company
is provided for informational purposes only and does not represent
an offer to buy or sell the Debt Securities by the Calculation
Agent or any other party. The valuations provided are an indication
of market levels and do not imply that they can be sold at that
valuation price. They are based on assumptions and data the
Calculation Agent considers in its judgement reasonable, but an
alternative valuer might arrive at different valuations for the
same investments.
6. RECEIVABLES
TOTAL TOTAL
31 Mar 2011 31 Mar 2010
GBP GBP
Prepaid expenditure 12,150 12,268
Prepaid debt issue costs 82,599 132,680
Accrued bank interest receivable 96 -
Sundry debtors 3,940 3,939
------------ ------------
98,785 148,887
------------ ------------
7. PAYABLES (amounts falling due within one year)
TOTAL TOTAL
31 Mar 2011 31 Mar 2010
GBP GBP
Accrued administration fees 2,081 2,081
Accrued registration fees 944 1,021
Accrued audit fee 10,000 9,000
Accrued management fees 15,741 -
Other accrued expenses (1) 187,782 211,327
------------ ------------
216,548 223,429
------------ ------------
(1) Consisting of the currently estimated surplus cash remaining
in the bank account established in respect of the ongoing, annual
and redemption expenses of the Fund after payment of all such
budgeted expenses to date, which will be payable to the Manager at
the Redemption Date, as set out in the Prospectus of the Fund,
together with other accrued expenses of an immaterial amount.
8. PAYABLES (amounts falling due after one year)
TOTAL TOTAL
31 Mar 2011 31 Mar 2010
FINANCIAL LIABILITIES GBP GBP
Fair value of the Put Option 3,272,224 6,529,186
------------ ------------
3,272,224 6,529,186
------------ ------------
The performance of the Put Option is linked to the performance
of the FTSE 100 Index. At an Index value of 6,160.30 or above at
the close of business on 22 November 2012, or if the Index has
never closed below 3,080.15 during the calculation period from 22
November 2006 to 22 November 2012 (the "Calculation Period"), the
Put Option will be worth GBPNil at maturity. If the Index has
closed below 3,080.15 over the Calculation Period and the Index is
still below 6,160.30 at 22 November 2012, the Put Option will be
worth a percentage of the notional value, being GBP52,953,000,
equivalent to the percentage fall in the level of the FTSE 100
Index over the Calculation Period.
The Put Option is not exercisable until the maturity date of 22
November 2012.
The Put Option has been classified as Level 2 in accordance with
the fair value hierarchy. There have been no transfers between
Level 1 and Level 2 of the fair value hierarchy during the
year.
The fair value of the Put Option is based on the valuation
provided by the Calculation Agent. There is no active market for
the Put Option.
J.P. Morgan Chase Bank N.A., in its capacity as the Put Option
counterparty, has security over the financial assets held by the
Company for payment of any monies owed upon maturity or termination
of the Put Option contract.
The original proceeds from the sale of the Put Option were
GBP4,209,763.50.
9. SHARE CAPITAL
Authorised SHARES GBP
Unclassified shares of 0.01p each 200,000,000 20,000
Management shares of GBP1 each 100 100
-------
20,100
-------
Issued FUND 2012
Management Nominal Zero Dividend
Shares Shares Shares TOTAL
Shares in issue
as at 31 March
2010
and 31 March
2011 2 39,375,000 35,625,000 75,000,002
----------- ----------- -------------- -----------
Issued FUND 2012
Management Nominal Zero Dividend TOTAL
Shares Shares Shares
GBP GBP GBP GBP
Issued share
capital
as at 31 March
2010
and 31 March
2011 2 3,937 3,563 7,502
----------- -------- -------------- ------
Zero Dividend Shares are redeemable on or around 22 November
2012. The Company is closed-ended and therefore shareholders have
no right to request the Company to repurchase their Zero Dividend
Shares or to redeem them prior to the redemption date. If the
Company is wound up prior to the redemption date, shareholders will
be entitled to the net asset value of the Zero Dividend Shares on
the winding up date. No dividends will be paid on the Zero Dividend
Shares.
Nominal shares are issued for administrative purposes and carry
no rights as to dividends or voting.
Management shares are not redeemable, do not carry any right to
dividends and in a winding up rank only for a return of the nominal
amount paid up thereon after the return of capital on Zero Dividend
Shares and Nominal Shares, together with any balance remaining in
the Management Fund.
10. SHARE PREMIUM
TOTAL
GBP
Share premium as at 31 March 2010 and
31 March 2011 52,949,438
-----------
11. FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the
Company's operations; and
(b) Sterling-denominated Debt Securities whose performance is
based on the performance of the FTSE 100 Index.
(c) The Company for the account of the Fund has also sold a Put
Option, whose performance is based on the performance of the FTSE
100 Index. Details of the Put Option contract are shown in Note
8.
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company's financial instruments
are market price risk, credit risk, liquidity risk, interest rate
risk and currency risk. The Board regularly review and agrees
policies for managing each of these risks and these are summarised
below:
(a) Market Price Risk
Market price risk arises mainly from uncertainty about future
prices of financial instruments held. It represents the potential
loss the Company for the account of the Fund might suffer through
holding market positions in the face of price movements. The
Manager actively monitors market prices and reports to the Board as
to the appropriateness of the prices used for valuation purposes. A
list of investments held by the Company for the account of the Fund
is shown in the Schedule of Investments.
Price sensitivity
The following details the Company's sensitivity to a 10%
increase and decrease in the final market prices of its constituent
financial assets and liabilities.
The Final Capital Entitlement due on the redemption of the
Shares is determined by reference to the performance of the FTSE
100 Index over the calculation period (the "Calculation Period")
from 23 November 2006 (the "Start Date") to 22 November 2012 (the
"End Date"). If at the End Date the Index stands below 6,160.30
(the "Start Value") but has not closed below 3,080.15 during the
Calculation Period, the Final Capital Entitlement will be equal to
148.64 pence per Share.
During the period from the Start Date to 31 March 2011 the Index
had not closed below 3,080.15.
As at 31 March 2011, the Index closed at 5,908.76.
If market prices as at 31 March 2011 had been 10% higher
(equating to an Index level of 6,499.64) and assuming this value
was to remain unchanged until the End Date, the Final Capital
Entitlement due would be 181.39 pence per Share.
If market prices as at 31 March 2011 had been 10% lower
(equating to an Index level of 5,317.88) and assuming this value
were to remain unchanged until the End Date, the Final Capital
Entitlement due would be 148.64 pence per Share. As the Index would
need to decline by more than 49.80% from its level at 31 March 2011
for the Final Capital Entitlement due to be less than 148.64 pence
per Share, at 31 March 2011 the Company had no material sensitivity
to a 10% decrease in the level of the Index.
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty will be
unable or unwilling to meet a commitment that it has entered into
with the Company. The Board monitors credit risk and will consider
further action if the credit rating of an issuer falls below A- or
A3 as ranked by Standard and Poor's ("S&P") and Moody's
Investor Services Inc ("Moody's") respectively. Credit risks are
controlled in the Company because the EMTN's have been purchased
from several different issuers.
The following table details the aggregate ratings of the debt
instruments in the portfolio as a percentage of the value of the
Company's investments for the account of the Fund as at 31 March
2011 (31 March 2010 for the comparative period) as rated by
Moody's:
Rating 9 Jun 2011* 31 Mar 2011 31 Mar 2010
Aaa 0.00% 0.00% 0.00%
Aa 34.88% 34.88% 33.91%
A 34.47% 51.59% 66.09%
Baa 17.12% 0.00% 0.00%
Ba 13.53% 13.53% 0.00%
* Based on the value of the Company's investments for the
account of the Fund as at 31 March 2011.
The credit risk on cash transactions and transactions involving
derivative financial instruments is mitigated by transacting with
counterparties that are regulated entities subject to prudential
supervision, or with high credit ratings assigned by international
credit rating agencies.
The Company's financial assets exposed to credit risk are as
follows:
31 Mar 31 Mar
2011 2010
GBP GBP
Unquoted financial assets designated
as at fair value through profit or
loss 57,729,785 56,673,196
Receivables 98,785 148,887
Cash and cash equivalents 650,706 924,896
----------- -----------
58,479,276 57,746,979
----------- -----------
(c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter
difficulty in realising assets or otherwise raising funds to meet
financial commitments. The Company's main financial commitments are
its ongoing operating expenses and any cash settlement due to the
Put Option Counterparty on the maturity of the Put Option,
scheduled to occur on 22 November 2012.
Upon the issue of the Shares in November 2006 the Company
created a cash reserve (the "Expense Provision") in the amount of
2.1% of the amount raised by the issue of the Shares (the "Initial
Gross Proceeds") plus GBP500,000, such amount being estimated in
the opinion of the directors upon the advice of the Manager and the
Administrator to be sufficient to meet the operating expenses
reasonably expected to be incurred over the life of the Shares.
At each quarterly Board meeting and at the end of each financial
period the directors review the Expense Provision against the
expected future expenses (other than the Manager's fee) of the
Company. To the extent that the directors consider that the Expense
Provision is less than 150 per cent of the expected future expenses
of the Company (other than the Manager's fee), the directors may,
having first consulted the Manager, at their discretion reduce the
amount of investment management fees payable to the Manager
(subject to a maximum reduction of 50 per cent) in order to
re-establish the 150 per cent cover.
If at any time during the life of the Company, notwithstanding
the arrangements summarised above, the Expense Provision is
exhausted then, subject to the relevant excess expenses having been
agreed by the Manager, the Manager will make good such shortfall
from its own resources, subject to a maximum in each of the first
five annual financial periods of 0.25 per cent of the Initial Gross
Proceeds plus GBP6,000 and in the last financial period preceding
the Redemption Date, of a maximum amount of GBP136,000.
Should these expenses exceed this cap the return to Shareholders
will be adversely impacted. The directors do not anticipate that
the expenses will exceed the Expense Provision.
The Debt Securities purchased by the Company for the account of
the Fund mature on 22 November 2012 (the "Maturity Date") and are
due to be redeemed at their notional face value plus four times the
performance increase between 22 November 2006 and 22 November 2012
in the FTSE 100 Index, capped at an amount equal to 64% of the
notional face value, so that the aggregate maturity proceeds are
expected to be between GBP52,953,000 if the FTSE 100 Index closes
on 22 November 2012 at or below its starting value on 22 November
2006 of 6,160.30 and a maximum of GBP86,842,920 if the FTSE 100
closes at or above 6,160.30 on 22 November 2012, all subject to
counterparty default.
Provided that none of the issuers of the Debt Securities
defaults on its obligation to pay the maturity proceeds on the
Maturity Date, the minimum maturity proceeds of GBP52,953,000 due
are intended to satisfy the maximum payment due to be made by the
Company to the Put Option Counterparty on the maturity of the Put
Option of GBP52,953,000.
The directors and the Manager monitor the credit ratings of all
issuers of the Debt Securities. In the event of any downgrading in
the long-term credit rating of any issuer below A- or A3, as
determined by S&P and/or Moody's respectively, the Company on
behalf of the Fund may in its absolute discretion seek to sell the
relevant Debt Securities to third party purchasers and to reinvest
the proceeds in the purchase of debt securities of another issuer
such that the new debt securities will replicate as closely as
possible the terms and conditions of the original Debt Securities.
If the purchase of such debt securities is not possible, the
Directors may reinvest such proceeds as they see fit in investments
which, in the opinion of the Directors, as nearly as is
practicable, replicate the investment characteristics of the Debt
Securities sold and so that the proceeds are invested, as nearly as
is practicable in accordance with the Company's stated investment
objective for the Fund.
No assurance can be given that the Company will be able to sell
the Debt Securities, for the reasons described above or on a
winding-up of the Company, at a favourable price or at all. Even if
the Company is able to sell such Debt Securities, the sale of the
Debt Securities may result in a lower return than would have been
the case if the long-term credit rating of the issuer of the
relevant Debt Securities had not been downgraded and the original
Debt Securities had been retained and were redeemed on the Maturity
Date.
(d) Interest Rate Risk
The Company holds cash on fixed deposit, the return on which is
subject to fluctuations in market interest rates. All fixed
deposits mature within three months.
The weighted average effective interest rate for cash and bank
balances for the year ended 31 March 2011 was 0.53% (2010:
1.35%).
None of the other assets or liabilities of the Company attract
or incur interest.
Interest rate sensitivity
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows or the fair value of
financial instruments. Except for cash set aside to meet expenses,
the Company's assets and liabilities are expected to be held until
the Redemption Date.
If interest rates had been 100 basis points higher and all other
variables were held constant, the Company's net assets attributable
to shareholders as at 31 March 2011 would have been GBP6,507
greater (2010: GBP9,249) due to an increase in the amount of
interest receivable on the bank balances.
If interest rates had been 100 basis points lower and all other
variables were held constant, the Company's net assets attributable
to shareholders as at 31 March 2011 would have been GBP6,507 lower
(2010: GBP9,249) due to a decrease in the amount of interest
receivable on the bank balances.
The Company's sensitivity to interest rates is lower in 2011
than in 2010 because of a decrease in the amount of cash held.
(e) Currency Risk
As both the Shares and the Debt Securities are Sterling
denominated, shareholders investing for Sterling returns will not
be exposed to direct currency risk. The value of the underlying
securities comprising the FTSE 100 may be affected by changes in
the economic, political or social environment in Europe, as well as
globally, including changes in exchange rates.
(f) Capital management
The investment objective of the Company for the Fund is to
provide shareholders, on the Redemption Date, with a payment per
Zero Dividend Share which will comprise a capital amount of 148.64p
per Share and a growth amount per Share equal to four times any
percentage increase in the value of the Index as at 22 November
2012 (relative to its value as at 22 November 2006, such amount
being expressed in pence and rounded down to the next half pence,
subject to a maximum increase of 64 per cent of the issue price of
148.64 pence per Share.
The Company has an unlimited life but the Zero Dividend Shares
will be redeemed on or around 22 November 2012. Until then the
Company has a fixed capital.
(g) Collateral
Under the terms of a Pledge Agreement dated 7 December 2006
entered into between the Company on behalf of the Fund and the Put
Option Counterparty, the Company on behalf of the Fund has pledged
the Debt Securities and all rights, title and interest therein and
any and all proceeds resulting from the sale or repayment of the
Debt Securities as security for the Company's contingent liability
under the Put Option sold to the Put Option Counterparty, further
details of which are shown at Note 8. The collateral is held by a
custodian in a segregated account in Euroclear. Where there is an
event of default in respect of the Company under the Put Option,
the Put Option Counterparty will be entitled to enforce its
security over the Debt Securities.
13. RELATED PARTIES
Anson Fund Managers Limited is the Company's Administrator and
Secretary. Anson Registrars Limited is the Company's Registrar,
Transfer Agent and Paying Agent and Anson Administration (UK)
Limited is the UK Transfer Agent. John R Le Prevost is a director
and controller of Anson Fund Managers Limited, Anson Registrars
Limited and Anson Administration (UK) Limited. GBP32,284 (2010:
GBP32,299) of costs were incurred by the Company with these related
parties in the period, of which GBP3,025 (2010: GBP3,102) was due
to these related parties as at 31 March 2011.
14. ULTIMATE CONTROLLING PARTY
In the opinion of the directors, the Company has no ultimate
controlling party.
SCHEDULE OF INVESTMENTS as at 31 March 2011
CLOSE UK INDEX GROWTH FUND 2012 NOMINAL VALUATION TOTAL NET
DEBT SECURITIES PORTFOLIO HOLDINGS GBP ASSETS
Abbey National Treasury Services
Plc
EMTN 6 December 2012 8,800,000 9,983,451 18.15%
Britannia Building Society
EMTN 6 December 2012 8,800,000 9,855,873 17.92%
Caisse Centrale du Credit Immobilier
de France
EMTN 6 December 2012 8,800,000 10,045,559 18.27%
Irish Life & Permanent Plc
EMTN 6 December 2012 8,800,000 7,811,558 14.21%
Royal Bank of Scotland Plc
EMTN 6 December 2012 8,953,000 10,148,393 18.45%
SNS Bank NV
EMTN 6 December 2012 8,800,000 9,884,951 17.98%
----------- ----------
57,729,785 104.98%
----------- ----------
The Company has also sold a Put Option, details of which are
shown below:
NOMINAL VALUATION
HOLDING GBP
JP Morgan Chase Bank FTSE 100
Index
Option maturing 22 November
2012 52,953,000 (3,272,224)
------------
SCHEDULE OF INVESTMENTS as at 31 March 2010
CLOSE UK INDEX GROWTH FUND 2012 NOMINAL VALUATION TOTAL NET
DEBT SECURITIES PORTFOLIO HOLDINGS GBP ASSETS
Abbey National Treasury Services
Plc
EMTN 6 December 2012 8,800,000 9,603,734 18.83%
Britannia Building Society
EMTN 6 December 2012 8,800,000 9,094,304 17.83%
Caisse Centrale du Credit Immobilier
de France
EMTN 6 December 2012 8,800,000 9,546,455 18.72%
Irish Life & Permanent Plc
EMTN 6 December 2012 8,800,000 9,402,052 18.44%
Royal Bank of Scotland Plc
EMTN 6 December 2012 8,953,000 9,615,483 18.86%
SNS Bank NV
EMTN 6 December 2012 8,800,000 9,411,168 18.46%
----------- ----------
56,673,196 111.13%
----------- ----------
The Company has also sold a Put Option, details of which are
shown below:
NOMINAL VALUATION
HOLDING GBP
JP Morgan Chase Bank FTSE 100
Index
Option maturing 22 November
2012 52,953,000 (6,529,186)
------------
For further information contact:
Anson Fund Managers Limited
Secretary
Tel: Guernsey 01481 722260
9 June 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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