BRITISH & AMERICAN INVESTMENT TRUST PLC: Annual Financial Report

British & American Investment Trust PLC 
Annual Financial Report 
for the year ended 31 December 2012 
Registered number: 00433137 
Directors                                          Registered office 
             
J Anthony V Townsend (Chairman)                    Wessex House                  
 
Jonathan C Woolf (Managing Director)               1 Chesham Street              
 
Dominic G Dreyfus (Non-executive)                  London SW1X 8ND               
 
Ronald G Paterson (Non-executive)                  Telephone: 020 7201 3100      


     
                                                   Registered in England        
     
                                                   No.433137                    
     
                                                   30 April 2013                
     
                                                                                
     


This is the Annual Financial Report as required to be published under DTR 4 of
the UKLA Listing Rules.


Financial Highlights

For the year ended 31 December 2012
                                                 2012                   2011    
      


                  Revenue      Capital      Total    Revenue    Capital     
 Total 


                       return       return                return     return     
      


                     £000         £000       £000       £000       
£000       £000 
                                                                             
  
Profit/(loss)           2,107      (1,435)        672      2,587    (1,589)      
998
before tax -                                                                     
  
realised                                                                         


      
                                                                                


  
Profit/(loss)               -       1,446       1,446          -    (7,612)    
(7,612)
before tax -                    
unrealised                                                                       


      
                                                                                
      


               __________   __________ __________ __________ __________ 
__________ 
                                                                             
  
Profit/(loss)           2,107           11      2,118      2,587    (9,201)    
(6,614)
before tax - total                                                   


                                                                                
      


               __________   __________ __________ __________ __________ 
__________ 
                                                                             
  
Earnings per £1                                                                 
   
ordinary share -        7.02p        0.04p      7.06p      8.93p   (36.80)p   
(27.87)p
basic                                                                            


      
                                                                                
      


               __________   __________ __________ __________ __________ 
__________ 
                                                                             
  
Earnings per £1                                                                 
   
ordinary share -        6.01p        0.03p      6.04p      7.38p   (26.29)p   
(18.91)p
diluted                                                                          


      
                                                                                
      


               __________    _________ __________ __________  _________ 
__________ 


                                                                                
      
                                                                                
      
                                                                                


  
Net assets                                     23,345                           
23,430 


                                                                                
      


                                       __________                       
__________ 
                                                                             
  
Net assets per                                                                   
  
ordinary share                                                                   


      
                                                                                


  
- deducting                                                                      
  
preference                                        53p                            
54p 
shares at par                                                                 


      
                                                                                
      


                                       __________                       
__________ 
                                                                             
  
- diluted                                         67p                            
67p 


                                                                                
      


                                       __________                       
__________ 


                                                                                
      
                                                                                


  
Diluted net asset                                                                
  
value per ordinary                                                               
  
share at 26 April                                                                
  
2013                                              73p                            


      
                                                                                
      
                                           __________                           
      
                                                                                


  
Dividends declared                                                               
  
or proposed for                                                                  
  
the period                                                                       


      
                                                                                


  
per ordinary share                                                               


      
                                                                                


  
- interim paid                                   2.7p                           
  2.7p 
                                                                             
  
- final proposed                                 4.9p                           
  4.7p 
                                                                             
  
per preference                                   3.5p                           
  3.5p
share                                                                            


      
                                                                                
      
    Chairman's Statement

I report our results for the year ended 31 December 2012.

Revenue

The return on the revenue account before tax amounted to £2.1 million (2011:  
£
2.6 million), a decrease of 19 percent resulting from a decline in gross income
to £2.5 million from the level of £2.9 million achieved in the previous year. 

The level of income received in 2012 was more commensurate with long-run income
levels in prior years compared to 2011 which was unusually high due to
exceptional amounts of special dividends received in that year.  £2.3 million
of this amount (2011:  £2.7 million) represented income from portfolio
investments and £0.2 million (2011:  £0.2 million) from film, property and
other income.

The total return before tax amounted to a gain of £2.1 million (2011:  £6.6
million loss), includes net revenue of £2.1 million, a realised loss of £1.2
million and an unrealised gain of £1.4 million.  The revenue return per
ordinary share was 7.0p (2011:  8.9p) on an undiluted basis and 6.0p (2011: 
7.4p) on a diluted basis.

Net Assets

Group net assets at the year end were £23.3 million (2011:  £23.4 million),
virtually unchanged from the previous year.  This compares to increases in the
FTSE 100 and All Share indices of 5.8 percent and 8.2 percent, respectively,
over the period. On a total return basis, after adding back dividends paid
during the year, group net assets increased by 9.0 percent compared to a total
return on the two indices of between 9.1 and 10.5 percent.  Total return over
the year thus tracked market return over the year, but did not match the
outperformance we were able to report at the half year.  This was eroded by the
significant rise in equity markets generally in the closing months of the year,
as discussed in more detail below, while the value of our largest investment,
Geron Corporation, remained relatively static over the year.

The net asset value per ordinary share remained unchanged at 67p (2011:  67p)
on a diluted basis. Deducting prior charges at par, the net asset value per
ordinary share decreased to 53p (2011: 54p).

Our share price fluctuated from between 60p and 75p over the year, which
represents a trading range generally equal to or in excess of net asset value. 
This is an improvement to previous years when shares have often traded at
significant discounts to NAV and compares favourably to trading discounts
generally for investment trusts.  It is believed that investors have been
attracted by the significantly higher than market yield offered by our stock
and our record of tracking the market on a total return basis over the longer
term.

Dividend

We are pleased to recommend an increased final dividend of 4.9p per ordinary
share, which together with the interim dividend makes a total payment for the
year of 7.6p (2011:  7.4p) per ordinary share. This represents an increase of
2.7 percent over the previous year's total dividend and a yield of 10.3 percent
based on the share price of 75p at the end of the year. The final dividend will
be payable on 20 June 2013 to shareholders on the register at 31 May 2013. A
dividend of 1.75p will be paid to preference shareholders resulting in a total
payment for the year of 3.5p per share.

GeronCorporation

We remain deeply unsatisfied with the management and performance of our major
investment, Geron Corporation, although the substantial declines in value which
were experienced in the previous year were not repeated in 2013. As already
communicated to shareholders, however, we are very pleased by the actions taken
by our own major shareholder, Romulus Films Ltd, which has been instrumental in
arranging and funding the purchase of Geron's stem cell business by the US
listed biotechnology company BioTime Inc in such a way as to benefit Geron
shareholders such as ourselves.  Once the transaction becomes effective later
this year, Geron shareholders will receive directly shares in a new listed and
well funded company which will reactivate and develop these important and
valuable assets.  We will thus maintain our exposure to this ground breaking
regenerative medicine business and it is hoped that, particularly with the
substantial interest and revived valuations now being shown by the market in
stem cell companies throughout the world, we will be able to recoup the
significant value lost to us in recent years by the actions of current Geron
management in discontinuing this business.

Outlook

A major revival in equity valuations globally has taken place since the end of
2012, with indices in the USA finally surpassing their all time high levels at
the end of the first quarter.  Equities in the UK have also been buoyant
although prices in European markets have lagged significantly against the
background of continued economic decline in many eurozone countries and the
prospect of further years of imposed austerity measures.

Markets generally took heart from the reduction in perceived long term and
possible catastrophic risk represented by the debt crisis in developed markets,
particularly in Europe, and the fiscal impasse in the USA.  By the end of 2012
both these risks had been averted by actions of the European Central Bank in
Europe and a last minute, if temporary, settlement by politicians of the
so-called fiscal cliff in the USA.

Consequently, for the last few months, market sentiment has been firm and
continues to be so.  However, many major and potentially systemic risks still
remain on the horizon, not least the recent revival of concerns around the Euro
and its long term survival as well as a re-run of the US fiscal debates later
this year.

As a result, we expect that despite the generally firmer tone of the last few
months, markets will still display a degree of volatility as expected or
unexpected risk events present themselves in a world where sovereign
indebtedness remains unfeasibly high, growth is very weak and emergency
recovery measures remain in place.    

Against this background, we maintain our long-term and income generating
strategies that are primarily based on equity investment in the UK and USA.

As at 26 April 2013, group net assets had increased to £25.6 million, an
increase of 9.5 percent since the beginning of the calendar year.  This is
equivalent to 62 pence per share (prior charges deducted at par) and 73 pence
per share on a diluted basis. Over the same period the FTSE 100 increased 9.0
percent and the All Share Index increased 9.6 percent.

Anthony Townsend

30 April 2013


Managing Director's report

In 2012, the UK equity market moved in a series of waves corresponding to
perceived risks in the wider financial markets, particularly worries
surrounding developed country sovereign indebtedness and its implications for
economic growth and financial market stability.  Stocks rose in the first
quarter but retraced their gains in the second quarter to end the half year
flat. In the second half, however, sentiment firmed noticeably and sustainably
after the European Central Bank defused anxieties surrounding highly indebted
Eurozone member countries by stating that it would do everything necessary to
support the Euro.

As a result, by year end UK equities had advanced 15 percent from a low point
at the end of May.  This rally was more in the nature of relief that the
market's worst fears were less likely to be fulfilled, rather than being based
on underlying economic fundamentals. Concerns remained until year end that
politicians in the US would not resolve the potentially damaging fiscal policy
divisions facing Congress.  However, after this was resolved, or at least
postponed, markets went on to rise strongly into the first quarter of 2013 by a
further approximately 10 percent, and more in the US where the indices finally
surpassed their all time highs.

Performance

As noted above, our portfolio lagged its benchmark indices at year end as the
equity market rose strongly in the final months of the year.  On a total return
basis, however, our portfolio performed in line with the benchmark indices. 
This has been the pattern of recent years.  While our income generating
strategy has performed satisfactorily, our capital appreciation strategy has
not, principally as a result of the significant losses suffered in our major
investment Geron Corporation.  As a result, capital growth has failed to match
the market and we have only tracked but not outperformed the benchmark on a
total return basis.

GeronCorporation

As noted above, steps have been taken by our major shareholder to buy out from
Geron Corporation its regenerative medicine business in an effort to re-start
this important business for the benefit of Geron's existing shareholders,
including ourselves.  Geron shareholders will be able to maintain a significant
and direct interest in the re-capitalised and re-activated business without
having to make any further financial contribution and will be put in a similar
position to where they would have been had the business been re-capitalised and
funded as part of Geron.  We are therefore hopeful that we will be able to
recover value lost after the major disappointment and mis-management of these
assets over the last two years.  Regenerative medicine is considered to be a
business whose potential and importance has finally been recognised as
evidenced by the substantial market outperformance of companies in this sector
over the last year.  We hope to share in the great promise which regenerative
medicine offers to its owners and patients worldwide in the future.

Economic comment

Following the recovery in equity prices noted above, markets have now risen to
their pre-crash highs in a period of 5 years.  This has been a relatively fast
recovery by comparison with the other major global financial crashes of
previous years (25 years in the case of the Great Depression of 1931 and over
23 years and continuing since the market high in Japan in 1989).  It is a
testament to the much improved policy responses from governments and central
banks on this occasion when vast and exceptional amounts of liquidity were
supplied to the markets compared to previous occasions when they were not.

However, while equity markets have recovered over the period, economic
fundamentals generally have not and many other measures of economic health and
outlook (debt levels, fiscal imbalances, central bank balance sheets,
international trade, safe-haven investment bubbles, real returns on investment)
remain worryingly untackled.

The austerity policies introduced by governments to tackle their fiscal
imbalances and over-indebtedness together with the natural caution of
corporates and the public to invest or spend against this background have
hampered efforts to restart growth.  When combined with the newly found
reluctance of banks to lend arising out of their own losses and newly imposed
capital requirements, the prospects of renewed economic growth have in the near
term been even more remote.

Outlook

As policy-makers began to realise in 2012 that this rebalancing could not be
tackled solely by austerity, economic policy focus began to switch from debt
and crisis management to an emphasis on growth generation by means other than
monetary policy, which has included competitive currency devaluation. 

This has been the natural and in some cases not unwelcomeresult of the
crisis-management policies of money creation and ultra-low interest rates
exerting downward pressure on currencies.  A period of competitive currency
devaluation has taken hold in developed economies, particularly in the USA and
Japan, to stimulate exports and domestic demand.

The combination of these measures has inevitably led to bubbles forming in
certain asset classes including property and equities, with investments in safe
haven assets such as US treasuries, gold and low-yielding bonds being unwound. 
As part of this revolve, equity markets rose strongly towards the end of 2012
and in the first quarter of 2013, regaining their all time highs in the US as
previously mentioned.

However, despite this return to risk in investment markets, European economies
have remained locked into negligible or negative growth as the restrictions of
a single currency have left over-indebted peripheral eurozone countries unable
to manage their legacy debt levels through currency devaluation.  The
consequent stagnation in their economic growth has been felt throughout the
Eurozone and other European countries and trading partners, including the UK. 

By contrast, other developed economies, particularly those with links to the
fast growing Asia Pacific area  have begun to show modest signs of economic
growth, as in the US where an increasingly sustained recovery appears
increasingly evident helped also by the 5 percent depreciation in the US dollar
for a large part of 2012.  Whether this return to growth will now be sufficient
to pull the rest of the World along a path to growth and allow the fundamentals
to catch up with the markets remains to be seen.


Jonathan Woolf

30 April 2013
    Group income statement

For the year ended 31 December 2012
                                             2012                  2011        
                                                                               
                     Revenue    Capital    Total  Revenue      Capital    Total
                      return     return            return       return         
                                                                               


                   £ 000      £ 000    £ 000    £ 000        £ 000    
£ 000 
                                                                           
Investment income      2,486          -    2,486    2,934            -    2,934
(note 2)                                                                  
                                                                           
Holding gains/                                                                 
(losses) on                                                                    
investments at fair                                                            
value through                                                                  
profit or loss             -      1,446    1,446        -      (7,612)  (7,612) 
                                                                           
Losses on disposal                                                             
of investments at          -    (1,237)  (1,237)        -      (1,395)  (1,395)
fair value through                                                   
profit or loss                                                                  
                                                                           
Expenses               (379)      (198)    (577)    (347)        (194)    (541) 


                                                                               
                    ________   ________ ________ ________     ________ ________


                                                                           
Profit/(loss)          2,107         11    2,118    2,587      (9,201)  (6,614)  
           
before tax                        
                                                                           
Tax                      (3)          -      (3)      (4)            -      (4) 


       
                                                                               
                    ________   ________ ________ ________     ________ ________


                                                                           
Profit/(loss) for      2,104         11    2,115    2,583      (9,201)  (6,618)  
           
the period                        


                                                                               
                    ________   ________ ________ ________     ________ ________


                                                                           
Earnings per share                                                              
                                                                           
Basic - ordinary       7.02p      0.04p    7.06p    8.93p     (36.80)p (27.87)p
shares                                                                          


                                                                               
                    ________   ________ ________ ________     ________ ________


                                                                           
Diluted - ordinary     6.01p      0.03p    6.04p    7.38p     (26.29)p (18.91)p
shares                                                                          


                                                                               
                    ________   ________ ________ ________     ________ ________
                                                                               
                                                                               
                                                                               


The group does not have any income or expense that is not included in the
profit for the period. Accordingly, the 'Profit/(loss) for the period' is also
the 'Total Comprehensive Income for the period' as defined in IAS 1(revised)
and no separate Statement of Comprehensive Income has been presented. 
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance published by the Association of
Investment Companies. All items in the above statement derive from continuing
operations. 
All profit and total comprehensive income is attributable to the equity holders
of the parent company. There are no minority interests. 
Group statement of changes in equity 
For the year ended 31 December 2012 


                                          Share       Capital Retained    Total 
                                           capital       reserve earnings         
                                                                               


                                      £ 000         £ 000    £ 000    £ 
000 
                                                                           
Balance at 31 December 2010              35,000       (3,710)      908   32,198 
                                                                           
Changes in equity for 2011                                                      
                                                                           
(Loss)/profit for the period                  -       (9,201)    2,583  (6,618) 
                                                                           
Ordinary dividend paid (note 4)               -             -  (1,800)  (1,800) 
                                                                           
Preference dividend paid (note 4)             -             -    (350)    (350) 


                                                                               
                                       ________      ________ ________ ________


                                                                           
Balance at 31 December 2011              35,000      (12,911)    1,341   23,430 
                                                                           
Changes in equity for 2012                                                      
                                                                           
Profit for the period                         -            11    2,104    2,115 
                                                                           
Ordinary dividend paid (note 4)               -             -  (1,850)  (1,850) 
                                                                           
Preference dividend paid (note 4)             -             -    (350)    (350) 


                                                                               
                                       ________      ________ ________ ________


                                                                           
Balance at 31 December 2012              35,000      (12,900)    1,245   23,345 


                                                                               
                                       ________      ________ ________ ________
                                                                               


Registered number: 00433137

Group Balance Sheet

For the year ended 31 December 2012
                                                                    Group
                                                                         
                                                         2012        2011       
                                                                         
                                                        £ 000       £ 000     


                                                                       
Non-current assets                                                        
                                                                     
Investments - fair value through profit or loss        21,137      21,618 
                                                                      
                                                                     
Current assets                                                            
                                                                     
Receivables                                             1,190          81 
                                                                     
Derivatives - fair value through profit or loss         3,204       3,322 
                                                                     
Cash and cash equivalents                                 740         122 


                                                                         
                                                   __________  __________
                                                                         
                                                        5,134       3,525
                                                                         
                                                   __________  __________


                                                                     
Total assets                                           26,271      25,143 


                                                                         
                                                   __________  __________


                                                                     
Current liabilities                                                       
                                                                     
Trade and other payables                                1,307          80 
                                                                     
Derivatives - fair value through profit or loss         1,619       1,633 


                                                                         
                                                   __________  __________
                                                                         
                                                      (2,926)     (1,713)
                                                                         
                                                   __________  __________
                                                                         
                                                                         


                                                                     
Total assets less current liabilities                  23,345      23,430 


                                                                         
                                                   __________  __________


                                                                     
Net assets                                             23,345      23,430 


                                                                         
                                                   __________  __________


                                                                     
Equity attributable to equity holders                                     
                                                                     
Ordinary share capital                                 25,000      25,000 
                                                                     
Convertible preference share capital                   10,000      10,000 
                                                                     
Capital reserve                                      (12,900)    (12,911) 
                                                                     
Retained revenue earnings                               1,245       1,341 


                                                                         
                                                   __________  __________


                                                                     
Total equity                                           23,345      23,430 


                                                                         
                                                   __________  __________
                                                                         
    
    Approved: 30 April 2013
    Group cash flow statement

For the year ended 31 December 2012
                                              Year ended   Year ended
                                                    2012         2011
                                                                             
                                                   £ 000        £ 000      


                                                                         
CASH FLOWS FROM OPERATING ACTIVITIES                                          
                                                                         
Profit/(loss) before tax                          2,118       (6,614)     
                                                                         
Adjustments for:                                                              
                                                                         
(Gain)/loss on investments                        (209)        9,007       
                                                                         
Scrip dividends                                   (8)         (7)         
                                                                         
Film income tax deducted at source                (3)         (4)         
                                                                         
Proceeds on disposal of investments at fair       16,255      18,579     
value through profit and loss                                                 
                                                                         
Purchases of investments at fair value            (14,111)    (19,756)   
through profit and loss                                                       


                                                                             
                                                  __________  __________


                                                                        
Operating cash flows before movements in          4,042       1,205      
working capital                                                               
                                                                         
Increase in receivables                           (3,372)     (155)       
                                                                         
Increase in payables                              1,798       538         


                                                                             
                                                  __________  __________


                                                                         
Net cash from operating activities before         2,468       1,588      
income taxes                                                                  


                                                                             
                                                  __________  __________


                                                                         
NET CASH FLOWS FROM OPERATING ACTIVITIES          2,468       1,588 


                                                                             
                                                  __________  __________


                                                                         
CASH FLOWS FROM FINANCING ACTIVITIES                                          
                                                                         
Dividends paid on ordinary shares                 (1,850)     (1,800) 
                                                                         
Dividends paid on preference shares               -           (175) 


                                                                             
                                                  __________  __________


                                                                         
NET CASH USED IN FINANCING ACTIVITIES             (1,850)     (1,975) 


                                                                             
                                                  __________  __________
                                                      


                   
NET INCREASE/(DECREASE) IN CASH AND CASH                                     
EQUIVALENTS                                       618        (387) 


                                                                             
                                                                             


                                                                         
CASH AND CASH EQUIVALENTS AT BEGINNING OF                                    
YEAR                                              122         509 


                                                                             
                                                  __________  __________


                                                                         
CASH AND CASH EQUIVALENTS AT END OF YEAR          740         122 


                                                                             
                                                  __________  __________
                                                                             


Purchases and sales of investments are considered to be operating activities of
the company, given its purpose, rather than investing activities. 


    1 Basis of preparation and going concern

The financial information set out above contains the financial information of
the company and its subsidiaries (together referred to as the "Group") for the
year ended 31 December 2012. The financial statements have been prepared on the
historical cost basis except for the measurements at fair value of investments,
derivative financial instruments and subsidiaries. The same accounting policies
as those published in the statutory accounts for 31 December 2011 have been
applied.

The information for the year ended 31 December 2012 is an extract from the
statutory accounts to that date. Statutory accounts for 2011, which were
prepared under IFRS as adopted by the EU, have been delivered to the registrar
of companies and those for 2012, prepared under IFRS as adopted by the EU, will
be delivered in due course.

The auditors have reported on the 31 December 2012 year end accounts and their
reports were unqualified and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying their reports
and did not contain statements under section 498(2) or (3) of the Companies Act
2006.

The directors, having made enquiries, consider that the Group has adequate
financial resources to enable it to continue in operational existence for the
foreseeable future. Accordingly, the directors believe that it is appropriate
to continue to adopt the going concern basis in preparing the Group's accounts.


2 Income
                                                                       
                                                    2012       2011
                                                                    


                                               £ 000      £ 000
Income from investments                                              
                                                                 
                                                                
UK dividends                                       1,838      2,119  
                                                                
Overseas dividends                                   342        506  
                                                                
Scrip and in specie dividends                          8          7  
                                                                
Interest on fixed income securities                  102        102  
                                                                
Property unit trust income                            22         22  
                                                                
Film revenues                                        179        172  


                                                                    
                                               __________ __________
                                                                    
                                                    2,491      2,928
                                                                    
                                               __________ __________


                                                                
Other income                                                         


                                                                    
                                                                    


                                                                
Deposit interest                                       -           1  
                                                                
Other                                                 (5)          5 


                                                                    
                                               __________ __________
                                                                    
                                                      (5)          6
                                                                    
                                               __________ __________


                                                                
Total income                                        2,486      2,934 


                                                                    
                                               __________ __________
                                                                    
                                                                    


                                                                
Total income comprises:                                              


                                                                    
                                                                    


                                                                
Dividends                                          2,188      2,632  
                                                                
Interest                                             102        103  
                                                                
Film revenues                                        179        172  
                                                                
Property income                                       22         22  
                                                                
(Loss)/gain on foreign exchange                       (5)         5 


                                                                    
                                               __________ __________
                                                                    
                                                    2,486      2,934
                                                                    
                                               __________ __________


                                                                
Income from investments                                              


                                                                    
                                                                    


                                                                
Listed investments                                 2,261      2,717  
                                                                
Unlisted investments                                 231        211  


                                                                    
                                               __________ __________
                                                                    
                                                    2,492      2,928
                                                                    
                                               __________ __________
                                                                    


Of the £ 2,188,000 (2011 - £2,632,000) dividends received in the group
accounts, £1,571,000 (2011 - £ 2,060,000) related to special and other
dividends received from investee companies that were bought after the dividend
announcement. There was a corresponding capital loss of £1,633,000 (2011 - £
2,183,000), on these investments. 
3 Earnings per ordinary share 
The calculation of the basic (after deduction of preference dividend) and
diluted earnings per share is based on the following data: 


                                       2012                               2011
                                                                                
              Revenue    Capital      Total    Revenue      Capital      Total
               return     return                return       return           
                                                                                


            £ 000      £ 000      £ 000      £ 000        £ 000      
£ 000      


                                                                                

Earnings:                                                                       
                                                                                
                                                                                
                                                                                

Basic          1,754         11      1,765      2,233        (9,201)    (6,968) 
                                                                                

Preference                                                                      

dividend         350          -        350        350              -       350
                                                                                
                                                                                


       __________ __________ __________ __________     __________ 
__________ 


                                                                                

Diluted         2,104         11      2,115      2,583       (9,201)     
(6,618)  
                                                                                


       __________ __________ __________ __________     __________ 
__________ 
                                                                             
Basic revenue, capital and total return per ordinary share is based on the net
revenue, capital and total return for the period after tax and after deduction
of dividends in respect of preference shares and on 25 million (2011: 25
million) ordinary shares in issue. 
The diluted revenue, capital and total return is based on the net revenue,
capital and total return for the period after tax and on 35 million (2011: 35
million) ordinary and preference shares in issue. 
4 Dividends 


                                                          2012       2011      
                                                                         
                                                         £ 000      £ 000     


                                                                     
Amounts recognised as distributions to equity                            
holders in the period:                                                    
                                                                     
Dividends on ordinary shares:                                             
                                                                     
Final dividend for the year ended 31 December 2011                       
of 4.7p (2010:4.5) per share                             1,175      1,125 
                                                                     
Interim dividend for the year ended 31 December                          
2012 of 2.7p                                               675        675
(2011:2.7p) per share                                                     


                                                                         
                                                                         
                                                                         
                                                    __________ __________
                                                                         
                                                         1,850      1,800
                                                                         
                                                    __________ __________


                                                                     
Proposed final dividend for the year ended 31                            
December 2012 of 4.9p (2011:4.7p) per share              1,225      1,175 


                                                                         
                                                    __________ __________
                                                                         
                                                                         


                                                                     
Dividends on 3.5% cumulative convertible preference                      
shares:                                                                   
                                                                     
Preference dividend for the 6 months ended 31                            
December 2011 of 1.75p (2010:1.75p) per share              175        175 
                                                                     
Preference dividend for the 6 months ended 30 June                       
2012 of 1.75p (2011:1.75p) per share                       175        175 


                                                                         
                                                    __________ __________
                                                                         
                                                           350        350
                                                                         
                                                    __________ __________


                                                                     
Proposed preference dividend for the 6 months ended                      
31 December 2012 of 1.75p (2011:1.75p) per share           175        175 


                                                                         
                                                    __________ __________
                                                                         
                                                                         
                                                                         


The preference dividend for the 6 months ended 31 December 2011 and the
preference dividend for the 6 months ended 30 June 2012 were paid as dividends
in specie. 
The proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
financial statements in accordance with IFRS. 
We have set out below the total dividend payable in respect of the financial
year, which is the basis on which the retention requirements of Sections 1158
and 1159 of the Corporation Tax Act 2010 are considered. 
Dividends proposed for the period                                         


                                                                         
                                                                         
                                                          2012       2011
                                                                         
                                                         £ 000      £ 000


                                                                     
Dividends on ordinary shares:                                             
                                                                     
Interim dividend for the year ended 31 December                          
2012 of 2.7p (2011:2.7p) per share                         675        675 


                                                                         
                                                                         


                                                                     
Proposed final dividend for the year ended 31                            
December 2012 of 4.9p (2011:4.7p) per share              1,225      1,175 


                                                                         
                                                    __________ __________
                                                                         
                                                         1,900      1,850
                                                                         
                                                    __________ __________


                                                                     
Dividends on 3.5% cumulative convertible preference                      
shares:                                                                   
                                                                     
Preference dividend for the year ended 31 December                       
2012 of 1.75p (2011:1.75p) per share                       175        175 
                                                                     
Proposed preference dividend for the year ended 31                       
December 2012 of 1.75p (2011:1.75p) per share              175        175 


                                                                         
                                                    __________ __________
                                                                         
                                                           350        350
                                                                         
                                                    __________ __________
                                                                         
    5 Net asset values
                        Net asset                 Net assets
                  value per share               attributable
                                                                             
                      2012   2011              2012     2011             
                                                                             
                      £      £                £ 000    £ 000            


                                                                         
Ordinary shares                                                               
                                                                         
Undiluted             0.53   0.54            13,345   13,430            
                                                                         
Diluted               0.67   0.67            23,345   23,430            
                                                                          
The undiluted and diluted net asset values per £1 ordinary share are based on
net assets at the year end and 25 million (undiluted) ordinary and 35 million
(diluted) ordinary and preference shares in issue. 
The undiluted net asset value per convertible £1 preference share is the par
value of £1.  The diluted net asset value per ordinary share assumes the
conversion of the preference shares to ordinary shares. 
Principal risks and uncertainties 
The principal risks facing the company relate to its investment activities and
include market risk (other price risk, interest rate risk and currency risk),
liquidity risk and credit risk. The other principal risks to the company are
loss of investment trust status and operational risk. These will be explained
in more detail in the notes to the 2012 Annual Report and Accounts, but remain
unchanged from those published in the 2011 Annual Report and Accounts. 
Related party transactions 
The company rents its offices from Romulus Films Limited, and is also charged
for its office overheads. 
The salaries and pensions of the company's employees, except for the three
non-executive directors, are paid by Remus Films Limited and Romulus Films
Limited and are recharged to the company. 
There have been no other related party transactions during the period, which
have materially affected the financial position or performance of the group.
During the period transactions between the company and its subsidiaries have
been eliminated on consolidation. 
Capital Structure 
The company's capital comprises £35,000,000 (2011 - £35,000,000) being
25,000,000 ordinary shares of £1 (2011 - 25,000,000) and 10,000,000 non-voting
convertible preference shares of £1 each (2011 - 10,000,000). The rights
attaching to the shares will be explained in more detail in the notes to the
2012 Annual Report and Accounts, but remain unchanged from those published in
the 2011 Annual Report and Accounts. 
Directors' responsibility statement 
The directors are responsible for preparing the financial statements in
accordance with applicable law and regulations. The directors confirm that to
the best of their knowledge the financial statements prepared in accordance
with the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and the profit of the company and
the undertakings included in the consolidation taken as a whole and that the
Chairman's Statement, Managing Director's Report and the Directors' report
include a fair review of the information required by rules 4.1.8R to 4.2.11R of
the FSA's Disclosure and Transparency Rules, together with a description of the
principal risks and uncertainties that the company faces. 
Annual General Meeting 
This year's Annual General Meeting has been convened for Tuesday 18 June 2013
at 12.15pm at Wessex House, 1 Chesham Street, London SW1X 8ND. 
END 
-0- Apr/30/2013 11:56 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.