TIDMSGEM 
 
From:               ScotGems plc 
 
LEI:                  549300GQHCPU9P1NYM13 
 
Date:               4 August 2021 
 
Results for the six months ended 30 June 2021 
 
The Directors of ScotGems plc ("the Company") are pleased to announce the 
Company's interim results for the six months ended 30 June 2021. 
 
  * The Company's objective is to provide long-term capital growth by investing 
    in a diversified portfolio of small cap companies that are incorporated or 
    listed in emerging markets or listed on developed market exchanges where a 
    majority of their activities take place in emerging markets. 
  * The Company was 96.6% invested in equities at 30 June 2021. 
  * During the interim period the net asset value rose by 9.4% to 93.9p per 
    share while the share price rose by 6.2% to 77.0p. 
 
Top Ten Investments as at 30 June 2021 
 
                                                                S/holders' 
                                                                     Funds 
 
Company                Country         Industry                          % 
 
Quiñenco               Chile           Industrial Conglomerate         5.9 
 
Tata Consumer Products India           Food Products                   4.3 
 
Integrated Diagnostics United Kingdom  Healthcare Providers &          4.1 
                                       Services 
 
Reunert                South Africa    Industrial Conglomerate         4.1 
 
Haw Par                Singapore       Holding Company                 4.0 
 
Bank OCBC Nisp         Indonesia       Banks                           4.0 
 
Philippine Seven       Philippines     Foods & Staples                 3.9 
                                       Retailing 
 
Youngone Holdings      Korea           Textiles, Apparel &             3.8 
                                       Luxury Goods 
 
Fragua                 Mexico          Foods & Staples                 3.7 
                                       Retailing 
 
Grupo Herdez           Mexico          Food Products                   3.4 
 
Top Ten Investments                                                   41.2 
 
Chairman's Statement 
 
During the six months to 30 June 2021, the net asset value ("NAV") of your 
Company rose by 9.4% to 93.9p per share while the share price rose by 6.2% to 
77.0p. This compares to rises in the Company's comparator indices: the MSCI 
Emerging Markets Small Cap Index, the MSCI Emerging Markets ex Asia Index and 
the MSCI Emerging Markets Index of 14.0%, 10.1% and 5.4% respectively. These 
indices are only for comparison purposes and our portfolio is not managed by 
reference to any particular Index, but according to principles which the 
Investment Manager has set out in the past and which you will be able to read 
more about in the report which follows. 
 
I intend to review our performance since inception in the Annual Report at the 
end of this year, but the positive absolute return achieved over the last year 
is encouraging. Your Investment Manager's style and principles mean that in 
periods when companies without earnings, and whose current valuation is based 
on the promise of very significant future growth, our portfolio will 
underperform the comparator indices. Our Investment Manager has provided a 
comprehensive report with these accounts including a detailed look at the 
portfolio which I hope Shareholders will find interesting and useful. They 
include a contribution analysis, detail on companies bought and sold, as well 
as their own perspective on the events influencing valuations in the Small Cap 
sector in Emerging Markets. 
 
During the period under review the Company's discount widened from 15.6% to 
18.0%. Shareholders will be aware that it is not the Board's policy to buy back 
shares, for reasons that I've set out previously. The Board and Investment 
Manager continue to be aligned with the body of shareholders through their own 
investment in the Company. In the first six months of the year the Investment 
Management Team have increased their shareholding by 489,201 shares, and now 
own 2,176,982 Ordinary shares. This brings the total holding by employees of 
Stewart Investors to 8,463,092 Ordinary shares (this includes the shareholding 
by the Stewart Investors Employee Benefit Trust which remains unchanged at 
5,000,000 Ordinary shares). The Directors shareholding of 4,790,096 Ordinary 
shares (including persons closely associated with them) remained unchanged 
during the period. The combined holdings of the Board and Investment Manager 
now represent 24.8% of the issued Ordinary share capital of the Company. 
 
At the AGM held on 6 May 2021, over 90% of votes were cast in favour of all the 
resolutions. Your Company relies both on our Investment Manager and our Company 
Secretary and Administrator. We are grateful to the people of both 
organisations for the way that they adapted their operations to work in a 
virtual way and have been able to maintain their usual high standards of 
service. During the period, PATAC Limited changed its name to Juniper Partners 
Limited and I'm pleased to say there has been a continuity of personnel as well 
as the high level of service we've been accustomed to receiving. 
 
Investment Manager's Report 
 
In last year's Interim Report we discussed the gulf in valuation between Global 
Emerging Markets ("GEM") companies wearing the label "value" and those wearing 
the label "growth". One year later, there has been a modest narrowing in the 
large disconnect between the "real world" (often analogous we feel to the "jam 
today" of stocks labelled value) and the "world of finance" (analogous with the 
"jam tomorrow" of often more speculative stocks labelled or even rewarded by 
financial types with the label of growth). One possible reason for the modest 
change are concerns around inflation, interest rates, and so forth - discussed 
below. But, more for governance-obsessed types such as ourselves, what has been 
more interesting are signs of increasing corporate misconduct and decreasing 
predictability of government behaviour in GEM. In order for profits in 2040 or 
2050 to be worth anything today, you have to believe that company management is 
on your side, and that the relevant government does not become your enemy. 
Plucking discount rates out of the air is the easy bit in GEM. 
 
On the topic of corporate misconduct, 51 Hong Kong listed companies failed to 
meet the exchange's deadline at the end of March for publishing audited 2020 
financials. At the time of writing, a number of these companies remain 
suspended. The first of these to discuss is GCL Poly - notable because it was 
the largest constituent of the MSCI Emerging Market Small Cap Index for most of 
the reporting period. It is a supplier of polysilicon to the solar power 
industry in China. This description ticks a number of popular boxes amongst 
investors including interest in technology, renewables and 'China'. The 
company's auditor has resigned over a dispute related to the commercial 
rationale for a payment to a contractor. The company is also going through a 
restructure following a default on its debt. Those who study financial history 
make the observation that the frequency of fraud increases in boom times, so 
the company's place at the heart of three popular themes appears to us as more 
than just a coincidence. At the point of its suspension, the market 
capitalisation of the company was approximately $6bn - size and scrutiny do not 
always correlate. 
 
A second interesting example comes from state owned Huarong Asset Management 
and Chinese tech behemoth, Alibaba. Huarong was set up by the Chinese 
government in 1999, following the Asian Financial Crisis, in order to help 
manage bad debt, however recent events suggest that it may now have bad debt of 
its own. For an example of the complex pressures on the business and the 
government's innovative ways of bailing it out, Huarong was recently "gifted" a 
part of Ant Group (a financial business incubated by Alibaba which in turn had 
by some interpretations seized it from other shareholders). This was part of a 
"rectification" deal between Ant Group and regulators, designed to tackle 
systemic financial risks. Huarong is another company which has been unable to 
file financial statements and whose shares remain suspended. The company 
insists that it can make the payments on its debt and says that the delayed 
accounts will allow it to complete a mysterious "transaction". Its former chair 
Lai Xiaomin was executed for corruption in January. Huarong and its issues 
aside, we have strong views on the governance arrangements at Alibaba and the 
risks its monopoly characteristics present. Suffice to say that government 
interest in the business and the "retirement" of its founder ought not to have 
surprised any investor. Shareholders may wonder what connects behemoths such as 
Alibaba with our universe of smaller companies. Firstly - the scraps from the 
table of the huge companies feed a huge ecosystem of smaller businesses - fewer 
scraps, lower growth. Secondly, the behemoths are keen investors in the smaller 
companies - this equity investment has been a lifeline for often loss-making 
capital-hungry smaller companies. If this tap turns off, some small and medium 
sized companies will find life very tricky; others whose share prices have been 
bid up by the general expectation of equity investment sloshing around, may 
disappoint their shareholders. 
 
As for inflation and its possible effects - we have little to add to our view 
that after twenty years of encouraging asset inflation, the likelihood that 
central banks voluntarily change their ways seems remote. Even inflation in the 
world of prices and wages has been termed "transitory" - a decision by the 
powers that be that erring on the side of yet more cheap money is preferable to 
conscientiously deflating bubbles. As such, valuations remain extremely 
stretched. 
 
As a final not especially cheerful point, we also note how weak many GEM 
sovereign balance sheets are. Two decades of easy money followed by a pandemic 
is a potent combination. Ultimately this has a cost, often involving weaker GEM 
currencies. We have always enjoyed owning hard currency businesses including 
exporters and feel that they have an important part to play in preserving 
capital over the coming years. 
 
Portfolio 
 
The portfolio consists of shares in 39 companies. The ten largest names 
represent 41.2% of the portfolio at the end of June. This is a small reduction 
from 42.7% at the end of 2020 and 46.4% at the end of 2019 when a shareholder 
resolution was passed to allow a slightly longer list of companies. Cash 
started the period at 3.3% and ended at 2.6%. 
 
The average market cap (weighted by position size) is $1.33 billion. Our 
process of looking back at the choices made by people behind each business can 
make very small listed companies hard to analyse when this track record may be 
too short, but we were pleased to add the Indonesian healthcare company Prodia 
Widyahusada to the portfolio. It is discussed in detail later but is an example 
of a high quality small cap at the smaller end of the portfolio's market cap 
range. It could only be owned responsibly in a closed ended company - a 
strength of the investment trust structure we are keen to harness. 
 
Additions 
 
During the period we bought shares in four new companies. Below is a list shown 
in descending order of size in the portfolio at the end of the period. 
 
Anadolu Efes is a Turkish listed brewer. It is controlled by the founding 
Özilhan and Yaz?c? families, and the global brewer ABI has a stake inherited 
from its merger with SAB Miller. We like the combination of committed family 
and multinational oversight. In 2018, ABI and Efes pooled their Russian beer 
businesses into a 50/50 JV which is the most valuable part of Efes today - it 
is the joint market leader with approximately 30% market share. Efes also owns 
a stake in a Coke bottler operating across several CIS states and in Pakistan 
where it is growing rapidly. Although Turkish listed, sales of beer and Coke in 
Turkey are barely a quarter of the overall value of the business. Over the last 
five years, the company has rapidly repaid debt meaning it offers a high single 
digit dividend yield earned from a steadily growing business. 
 
Bladex (full name Banco Latinoamericano de Exportaciones) is a bank which 
facilitates the transactions of international trade. It is listed on the New 
York Stock Exchange, is headquartered in Panama and operates across Latin 
America and the Caribbean. The central banks of the countries in these regions 
own shares and have the opportunity to elect board members. It plays an 
important role in the economic development and integration of the region 
through its reputation as a supportive lender. This reputation comes from its 
historic lending in periods when other international banks avoid the region, 
normally in periods of crisis. Its loan book is in US Dollars, it is very 
affordably valued and is well positioned to enjoy an economic recovery. 
 
Jumbo is a Greek listed retailer operating in Greece, Cyprus, Bulgaria and 
Romania. It is controlled and managed by the Vakakis family. It sells small 
baskets of everyday cheap items in a model which is comparable to Dollar 
General in the USA. This has so far made it less vulnerable to online retail 
than other formats such as the department store model. We are impressed by the 
company's ability to grow through past periods of economic stress in Greece and 
by its growth in new markets. It is conservatively financed and has pre-paid 
for much of its inventory historically in order to improve pricing. 
 
Prodia Widyahusada is an Indonesian listed medical diagnostics business with a 
$230m market cap at time of purchase and a free float which represents 25% of 
shares outstanding. It is controlled by the founding family and is 
conservatively financed after its IPO in 2016. It is the largest private sector 
diagnostics business in Indonesia and comes with an excellent record for 
quality. One piece of evidence of this is the fact that they are the only 
Indonesian diagnostics chain with a College of American Pathologist 
accreditation. Its track record demonstrates that the model benefits from large 
economies of scale - it can drive down costs as it grows allowing it to reduce 
pricing which in turn allows it to continue to gain market share. The business 
model has proved successful many times across GEM including Integrated 
Diagnostics Holdings operating primarily in Egypt, and whose shares are also 
held in the portfolio. The model deserves a strong social license given that 
early diagnosis allows early treatment and should therefore lead to higher 
survival rates. 
 
Disposals 
 
During the period we sold all of the shares held in two companies. 
 
Voltronic Power is a Taiwanese business manufacturing and selling 
uninterruptable power supplies. We first discussed reducing this in the 2020 
Annual Report but have now sold all of our shares. It is an excellent company 
but we are uncomfortable with the current valuation. 
 
Dis-Chem Pharmacies is a pharmacy chain in South Africa. It is a strong 
franchise but following recent engagements with the company we have concerns 
that stewardship might not be as strong as we had previously thought. This was 
demonstrated in part by recent poor disclosure of a related party transaction. 
 
Reduced 
 
The three most significant reductions were in businesses listed in India. 
 
Cyient is an engineering outsourcing business with global clients in industries 
such as aerospace and transportation. We made a small reduction on valuation. 
 
Sundaram Finance is a finance company with a focus on commercial vehicles. We 
made a small reduction on valuation. 
 
Tata Consumer Products is a food and beverages company with a focus on tea and 
coffee. We reported reductions in the last two Annual Reports and the last two 
Interim Reports. As discussed previously we believe that the original 
investment case remains intact, namely the importance of a recent management 
transition and a renewed focus on India under Tata Group stewardship, but that 
the company's transformation will take a long time. Valuations currently 
provide limited room for error. 
 
Country Breakdown*                        Region Breakdown* 
 
Country                              %    Region                  % 
 
India                             15.0    Asia                 46.8 
 
Mexico                             9.9    Latin America        18.4 
 
South Africa                       9.0    Africa Sub-Sahara    13.8 
 
Chile                              8.0    Europe                9.8 
 
Philippines                        5.9    Middle East           5.7 
 
Indonesia                          5.7    North America         2.1 
 
United Arab Emirates               5.7    Other net assets      3.4 
 
United Kingdom                     5.3 
 
Nigeria                            4.8 
 
Korea                              4.6 
 
Bangladesh                         4.5 
 
Singapore                          4.0 
 
Hong Kong                          3.2 
 
Turkey                             2.5 
 
United States                      2.1 
 
Greece                             2.0 
 
Pakistan                           1.8 
 
Vietnam                            1.2 
 
Sri Lanka                          0.9 
 
Peru                               0.5 
 
Other net assets                   3.4 
 
*  Country of listing. 
 
Contribution Analysis 
 
The Trust has made a decent start to 2021, with NAV rising by just over 9%. The 
strong gains of the second half of 2020, partly a result of the hoped for 
vaccine miracles, means gains over twelve months are a little over 24% in 
Sterling. NAV has lagged the tech-dominated Emerging Markets Smaller Cap index 
but performed better compared to the slightly less tech-dominated broader 
Emerging Markets index. This is especially in the past six months as enthusiasm 
of other investors appears to fade for Chinese companies given the governance 
and government issues they face. 
 
The Indian holdings have, collectively, contributed very significantly to fund 
performance. The Chilean conglomerate Quiñenco, and the South African 
mini-conglomerate Reunert have also been good to us. The strong rise in markets 
over the past twelve months means only a handful of companies have detracted 
significantly from performance - our retailer in the Philippines continues to 
find Covid-19 tough, and our Chilean water utility has suffered from concerns 
that future regulation may be less generous. 
 
The top and bottom contributors are discussed below. In discussing the 12 
months to 30 June it is worth pointing out that this period is unusual in that 
it follows the market's initial reaction to the Covid-19 pandemic. 
 
Positive 
 
Top Ten Contributors - 12 months ended 30 June 2021 
 
Company                                                Country of        Contribution to 
                                                       Listing           Return (%) 
 
Cyient                                                 India             4.68 
 
Tata Consumer Products                                 India             3.20 
 
Reunert                                                South Africa      2.90 
 
Indiamart                                              India             2.87 
 
Quiñenco                                               Chile             2.25 
 
Sundaram Finance                                       India             1.91 
 
Fragua                                                 Mexico            1.71 
 
Consorcio Ara                                          Mexico            1.61 
 
Grupo Herdez                                           Mexico            1.39 
 
Brac Bank                                              Bangladesh        1.38 
 
 
Cyient is an Indian research and development provider with global clients in 
industries such as aerospace and transportation. We discussed it in the last 
Interim Report as a detractor after a period in which its aerospace customers 
had struggled. Twelve months later, its share price has recovered and the 
company appears as a top contributor. Nonetheless throughout this period our 
investment case has not changed - we continue to back it on account of its high 
quality franchise, continued founder involvement, hard currency earnings and 
strong net cash balance sheet. We made a small reduction, as discussed earlier 
in the report. 
 
Tata Consumer Products is an Indian incorporated food and beverages company 
with a focus on tea and coffee. A recent management transition and a renewed 
focus on India sets the company on a strong trajectory to improve its 
profitability. We believe that the company has an exceptional opportunity to 
leverage the Tata brand, known for excellence, to become a diversified 
world-class consumer products company. We have made a modest reduction, as 
discussed earlier. 
 
Reunert is a South African conglomerate made up of three businesses, a cables 
business, an office equipment leasing business and an electrical engineering 
business. It reported strong results and a useful dividend despite still being 
adversely affected by reduced economic activity associated with the pandemic. 
 
Indiamart is India's largest business-to-business classified website business. 
It has been a strong contributor despite only being added relatively recently. 
As discussed previously it has benefitted from the overall popularity of all 
things online and tech, but has also reported strong results, is profitable on 
an accounting basis, and is cashflow positive. 
 
Quinenco is a Chilean holding company with its largest asset being a stake in 
Banco de Chile. It is 82% owned by the Luksic family which has been both a 
conservative and growth oriented steward over a long period of time. The 
conglomerate also owns businesses in brewing, global shipping and a Latin 
American ports business. 
 
Negative 
 
Top Ten Detractors - 12 months ended 30 June 2021 
 
Company                   Country of Listing        Contribution to Return 
                                                    (%) 
 
Philippine Seven          Philippines               -2.05 
 
IAM Chile                 Chile                     -1.40 
 
Unilever Nigeria          Nigeria                   -0.89 
                                                                             Hochschild Mining**       UK                        -0.73 
 
Vinda International       Hong Kong                 -0.71 
 
Chemical and Allied       Nigeria                   -0.53 
Products (CAP) 
 
Bank OCBC Nisp            Indonesia                 -0.39 
 
Mynews*                   Malaysia                  -0.17 
 
Orascom Construction      United Arab Emirates      -0.10 
 
Anadolu Efes              Turkey                    -0.01 
 
* Not held at end of period 
 
** Not held at start of period 
 
Philippine Seven is a 7-Eleven convenience franchise in the Philippines. The 
company has been a detractor in this period in contrast to its longer term 
track record, both since launch of the Trust and before. Convenience retail has 
been particularly affected versus other retail models by the prolonged lockdown 
in the country given that many outlets are located close to places of work. We 
do not have longer term concerns with the business. 
 
IAM Chile is a holding company with a 50% stake in Aguas Andinas, Chile's 
largest water utility. Over the long term the company has attractive defensive 
qualities, providing an inflation protected dividend yield. The company also 
exhibits a strong social purpose given that it delivers potable water to one of 
Latin America's largest metropolitan areas. In the shorter term it is likely 
that it has been affected by investor concerns following a vote to rewrite the 
country's constitution, possibly due partly to a low turnout and as a rejection 
of the established political parties. Whilst uncertainty in this constitutional 
process remains, we are more sanguine than the market consensus given that most 
citizens own assets in some form or another so have something to lose from any 
proposed undermining of property rights. 
 
Unilever Nigeria is a local subsidiary of Unilever Plc. We discussed this 
detractor in the Annual Report but despite what we would have hoped was a high 
level of oversight from the parent, local management underperformed last year 
and results have been poor. Fortunately, Unilever Plc does not lack experienced 
country heads and we believe the management problem has been rectified and that 
financial improvement should follow. On a sales per capita metric, this company 
has more potential than possibly any other held in the Trust - though we 
recognise that Nigeria is about as tough an operational jurisdiction as GEM has 
to offer. 
 
Hochschild Mining is a gold and silver mining company with mines in Peru and 
Argentina, listed on the London Stock Exchange and controlled by the Hochschild 
family. It enjoys a strong cost position and a long term owner. 
 
Vinda International manufactures tissue paper products and personal care 
products in China and Asia Pacific. It enjoyed a significant increase in demand 
during the height of the Covid-19 pandemic, showing as a contributor last year, 
but has been less profitable lately as it continues to invest in its personal 
hygiene business. Longer term this investment 'today' for a deferred reward 
'tomorrow' is part of our original investment case. We are backing the company 
to move away from tissue paper to become a dominant player in China's feminine 
hygiene and incontinence markets. Success here would allow Vinda to earn more 
attractive returns and provide structural long-term growth from exposure to 
sectors that are significantly underpenetrated relative to developed markets. 
 
Stewart Investors 
 
Investment Manager 
 
Tel:  0131 473 2900 
 
Juniper Partners Limited 
 
Company Secretary 
 
Tel:  0131 378 0500 
 
The Statement of Comprehensive Income, Statement of Financial Position, 
Statement of Changes in Equity and Cash Flow Statement follow. 
 
Statement of Comprehensive Income 
 
for the six months ended 30 June 2021 
 
Unaudited 
 
                                    Six months ended                     Six months ended 
                                        30 June 2021                         30 June 2020 
                                         (unaudited)                          (unaudited) 
 
                         Revenue   Capital     Total    Revenue      Capital        Total 
                          return    return     £'000     return       return        £'000 
                           £'000     £'000                £'000        £'000 
 
Investment income          1,111         -     1,111        437            -          437 
 
Gains/(losses) on              -     3,948     3,948          -      (6,298)      (6,298) 
investments held at 
fair value through 
profit or loss 
 
Foreign exchange               -      (33)      (33)          -          150          150 
(losses)/gains 
 
Total income               1,111     3,915     5,026        437      (6,148)      (5,711) 
 
Expenses                   (361)         -     (361)      (313)            -        (313) 
 
Profit/(loss) before         750     3,915     4,665        124      (6,148)      (6,024) 
taxation 
 
Taxation                   (135)     (221)     (356)       (41)            -         (41) 
 
Profit/(loss)                615     3,694     4,309         83      (6,148)      (6,065) 
for the period 
 
Return per share           1.15p     6.90p     8.05p      0.16p     (11.48)p     (11.32)p 
 
The Total column of this statement represents the Statement of Comprehensive 
Income of the Company. The Revenue return and Capital return columns are 
supplementary to this and are prepared under guidance issued by the Association 
of Investment Companies. 
 
All revenue and capital items in the above statement derive from continuing 
operations. 
 
                                                                          Year ended 
                                                                    31 December 2020 
                                                                           (audited) 
 
                                           Revenue             Capital          Total 
                                            return              return          £'000 
                                             £'000               £'000 
 
Investment income                              872                   -            872 
 
Losses on investments held at fair               -               (424)          (424) 
value through profit or loss 
 
Foreign exchange gains                           -                   8              8 
 
Total loss                                     872               (416)            456 
 
Expenses                                     (624)                   -          (624) 
 
Loss before taxation                           248               (416)          (168) 
 
Taxation                                      (70)               (380)          (450) 
 
Loss for the year                              178               (796)          (618) 
 
Return per share                             0.33p             (1.49)p        (1.16)p 
 
Statement of Comprehensive Income 
 
for the year ended 31 December 2020 
 
Audited 
 
 
The Total column of this statement represents the Statement of Comprehensive 
Income of the Company. The Revenue return and Capital return columns are 
supplementary to this and are prepared under guidance issued by the Association 
of Investment Companies. 
 
All revenue and capital items in the above statement derive from continuing 
operations. 
 
Statement of Financial Position 
 
As at 30 June 2021 
 
                                            (Unaudited)     (Unaudited)       (Audited) 
                                                  As at           As at           As at 
                                                30 June         30 June     31 December 
                                                   2021            2020            2020 
                                                  £'000           £'000           £'000 
 
Non-current assets 
 
Investments held at fair value through           48,549          37,055          44,720 
profit or loss 
 
Current assets 
 
Receivables                                       1,026             722             271 
 
Cash and cash equivalents                         1,299           3,222           1,504 
 
                                                  2,325           3,944           1,775 
 
Current liabilities 
 
Payables                                          (208)           (482)           (205) 
 
Net current assets                                2,117           3,462           1,570 
 
Non-current liabilities 
 
Deferred tax on liability on Indian               (393)               -           (326) 
capital gains 
 
Net assets                                       50,273          40,517          45,964 
 
Capital and reserves 
 
Ordinary share capital                              535             535             535 
 
Share premium                                     3,133           3,133           3,133 
 
Special reserve                                  49,315          49,315          49,315 
 
Capital reserve                                 (3,240)        (12,286)         (6,934) 
 
Revenue reserve                                     530           (180)            (85) 
 
Total equity                                     50,273          40,517          45,964 
 
Ordinary shares in issue at period end       53,533,770      53,533,770      53,533,770 
 
Net asset value per Ordinary share               93.91p          75.69p          85.86p 
 
 
The notes form an integral part of these Interim financial statements. 
 
Statement of Changes in Equity 
 
for the six months ended 30 June 2021 
 
For the six months ended     Ordinary     Share    Special  Capital   Revenue    Total 
30 June 2021 (unaudited)       share    premium    reserve  reserve   reserve    £'000 
                             capital      £'000      £'000    £'000     £'000 
                               £'000 
 
Balance at 31 December 2020       535      3,133    49,315   (6,934)      (85)   45,964 
 
Profit for the period               -          -         -     3,694       615    4,309 
 
Balance at 30 June 2021           535      3,133    49,315   (3,240)       530   50,273 
 
For the six months ended 30 
June 2020 (unaudited) 
 
Balance at 31 December 2019       535      3,133    49,315   (6,138)     (263)   46,582 
 
Loss for the period                 -          -         -   (6,148)        83  (6,065) 
 
Balance at 30 June 2020           535      3,133    49,315  (12,286)     (180)   40,517 
 
For the year ended 31 
December 2020 (audited) 
 
Balance at 31 December 2019       535      3,133    49,315   (6,138)     (263)   46,582 
 
Loss for the year                   -         -          -     (796)       178    (618) 
 
Balance at 31 December 2020       535      3,133    49,315   (6,934)      (85)   45,964 
 
 
The notes form an integral part of these Interim financial statements. 
 
Cash Flow Statement 
 
for the six months ended 30 June 2021 
 
 
                                                (Unaudited)  (Unaudited) 
                                                  Six months   Six months    (Audited) 
                                                       ended        ended   Year ended 
                                     Note      30 June 2021  30 June 2020  31 December 
                                                      £'000        £'000          2020 
                                                                                 £'000 
 
Net cash outflow from operations                       (240)        (468)        (679) 
before dividends, interest, 
purchases and sales                     7 
 
Dividends received from                                1,075          345          859 
investments 
 
Interest from deposits                                     -            1            1 
 
Purchases of investments                             (7,623)      (7,724)     (14,823) 
 
Sales of investments                                   6,905        6,763       12,074 
 
Cash inflow/(outflow) from                               117      (1,083)      (2,568) 
operations 
 
Taxation                                               (289)         (33)        (124) 
 
Net cash outflow from operating                        (172)      (1,116)      (2,692) 
activities 
 
Decrease in cash and cash                              (172)      (1,116)      (2,692) 
equivalents 
 
Cash and cash equivalents at start                     1,504        4,188        4,188 
of period 
 
Effect of currency (losses)/gains                       (33)          150            8 
 
Cash and cash equivalents at the                       1,299        3,222        1,504 
end of the period* 
 
*Cash and cash equivalents represent cash at bank. 
 
 1. The condensed Financial Statements for the six months to 30 June 2021 
    comprise the Statement of Comprehensive Income, Statement of Financial 
    Position, Statement of Changes in Equity and Cash Flow Statement, together 
    with the notes set out below. They have been prepared in accordance with 
    FRS 104 'Interim Financial Reporting' and the AIC's Statement of 
    Recommended Practice issued in October 2019. 
 2. The position as at 31 December 2020 on page 12 of the Interim Report is the 
    same as that contained in the Annual Report and Accounts, which received an 
    unquali?ed audit report and which have been ?led with the Registrar of 
    Companies. This Interim Report has been prepared under the same accounting 
    policies adopted for the year to 31 December 2020. 
 3. Expenses include the fee paid to the Company's investment manager - Stewart 
    Investors who received a management fee equal to 1% of the net asset value 
    of the Company less any reduction owing to the cap on expenses set at 1.5% 
    of net assets. In the six month period to 30 June 2021 the management fee 
    was £245,000 but was reduced to £113,000 owing to the cap (six month period 
    to 30 June 2020 - management fee was £193,000, but was reduced to £59,000 
    owing to the cap; year to 31 December 2020 - management fee was £411,000 
    but reduced to £162,000 owing to the cap). 
 4. The return per ordinary share figure is based on the net profit for the six 
    months ended 30 June 2021 of £4,309,000 (six months ended 30 June 2020: net 
    loss of £6,065,000; year ended 31 December 2020: net loss of £618,000) and 
    on 53,533,770 (six months ended 30 June 2020: 53,533,770; year ended 31 
    December 2020: 53,533,770) Ordinary shares, being the weighted average 
    number of Ordinary shares in issue during the periods. 
 5. At 30 June 2021 there were 53,533,770 Ordinary shares in issue (30 June 
    2020: 53,533,770; 31 December 2020: 53,533,770). 
 6. Investments in securities are ?nancial assets designated at fair value 
    through pro?t or loss on initial recognition. In accordance with FRS 102 
    and FRS 104, these investments are analysed using the fair value hierarchy 
    described below. Short term balances are excluded as their carrying value 
    at the reporting date approximates to their fair value. 
 
The levels are determined by the lowest (that is, the least reliable or least 
independently observable) level of input that is signi?cant to the fair value 
measurement for the individual investment in its entirety as follows: 
 
Level 1 - Investments with prices quoted in an active market; 
 
Level 2 - Investments whose fair value is based directly on observable current 
market prices or is indirectly being derived from market prices; and 
 
Level 3 - Investments whose fair value is determined using a valuation 
technique based on assumptions that are not supported by observable current 
market prices or are not based on observable market data. 
 
At 30 June 2021 £46,180,000 of the Company's investments were listed as Level 
1, the remaining £2,369,000 were listed as Level 2 (30 June 2020: £34,158,000 
listed as Level 1, £2,897,000 listed as Level 2; 31 December 2020: £42,307,000 
listed as Level 1, £2,413,000 listed as Level 2). Level 2 investments represent 
the Company's investments in Nigeria. These have been categorised as Level 2 
owing to uncertainty relating to the Nigerian Naira exchange rate. 
 
 1. Cash Flow Statement 
 
                                                            2021 
                                                           £'000 
 
Reconciliation of net loss before taxation to net 
cash outflow before dividends, interest, purchases 
and sales 
 
Net profit on activities before finance cost and           4,665 
taxation 
 
Net gains on investments                                 (3,948) 
 
Currency losses                                               33 
 
Investment income                                        (1,111) 
 
Increase in other payables                                     2 
 
Decrease in prepayments and other receivables                119 
 
Total                                                      (240) 
 
Statement of Principal Risks and Uncertainties 
 
The Board believes that the principal risks to shareholders, which it seeks to 
mitigate through continual review of its investments and through shareholder 
communication, are events or developments which can affect the general level of 
share prices, including, for instance, inflation or deflation, economic 
recessions and movements in interest rates and currencies. 
 
Other risks faced, and the way in which they are managed, are described in more 
detail under the heading Principal Risks and Risk Management within the 
Strategic Report in the Company's Annual Report for the year ended 31 December 
2020. 
 
The Company's principal risks and uncertainties have not changed since the date 
of the Annual Report and are not expected to change for the remaining six 
months of the Company's financial year. 
 
Going Concern 
 
The Directors believe, in the light of the controls and review processes noted 
above and bearing in mind the nature of the Company's business and assets, 
which are considered readily realisable if required, that the Company has 
adequate resources to continue operating for the foreseeable future. For this 
reason, they continue to adopt the going concern basis in preparing the 
accounts. 
 
Related Party Transactions 
 
Details of related party transactions are contained in the Annual Report for 
the year ended 31 December 2020. There have been no material changes in the 
nature and type of the related party transactions as stated within the Annual 
Report. 
 
Directors' Responsibility Statement in Respect of the Interim Report 
 
We confirm that to the best of our knowledge: 
 
  * the condensed set of financial statements has been prepared in accordance 
    with FRS 104 'Interim Financial Reporting'; 
  * the Chairman's Statement and Investment Manager's Report include a fair 
    review of the information required by the Disclosure Guidance and 
    Transparency Rules ("DTR") 4.2.7R, being an indication of important events 
    that have occurred during the first six months of the financial year and 
    their impact on the condensed set of financial statements; 
  * the Statement of Principal Risks and Uncertainties shown above is a fair 
    review of the information required by DTR 4.2.7R; and 
  * the condensed financial statements include a fair review of the information 
    required by DTR 4.2.8R, being related party transactions that have taken 
    place in the first six months of the current financial year and that have 
    materially affected the financial position or performance of the Company 
    during the period, and any changes in the related party transactions 
    described in the last Annual Report that could do so. 
 
On behalf of the Board, 
 
William Salomon, Chairman 
 
4 August 2021 
 
 
 
END 
 
 

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August 05, 2021 02:00 ET (06:00 GMT)

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