Witan Pacific. Investment Trust Plc Half Year Report

Transcription

1 Witan Pacific 2012 Investment Trust Plc Half Year Report P

2 Contents Overview 01 Investment Objective & Strategy 02 Financial Highlights 03 Chairman s Statement Company Information 21 Information for Shareholders 23 Witan Wisdom: How to Invest 25 Directors and Advisers 11 Portfolio Information Financial Statements 12 Income Statement 13 Reconciliation of Movements in Shareholders Funds 14 Balance Sheet 15 Cash Flow Statement 16 Notes to the Financial Statements 19 Regulatory Disclosures 20 Responsibility Statement of the Directors History Witan Pacific is today an investment trust that invests in the Asia Pacific region including Japan. The Company began its life in 1907 as General Investors and Trustees Limited investing in a diverse range of assets. In 1984 under the management of F&C it was renamed F&C Pacific Investment Trust plc to reflect its regional investment trust policy. Following the appointment of Witan Investment Services as Executive Manager and the Company s change of structure to multi-manager it was renamed in LISTED PREMIUM Half Year Report 2012

3 Our Investment Objective is to provide shareholders with a balanced portfolio of equity investments in the Asia Pacific region with the aim of outperforming the MSCI AC Asia Pacific Free Index ( ) Strategy Use an active multi-manager approach to add value and diversify risk. Manage the fund for growth predominantly through capital return. Employ share buy-backs when the Company s shares are standing at an anomalous discount to their net asset value. Deploy moderate levels of gearing to augment long-term returns while giving discretion to the Investment Managers to hold cash. Aim to grow the dividend per share in real terms, subject to market circumstances and an overriding test of prudence. Control costs and expenses seeking to maintain ongoing charges (excluding performance fees) of less than 1%. Half Year Report

4 Financial Highlights Summary of Results attributable to equity shareholders 31 July January 2012 % change Share price p p 5.1 Net asset value per share p p 1.1 Discount 14.5% 17.8% Interim dividend per share* 2.00p Gearing # 4.3% 3.4% * Interim dividend introduced at 2.00p (paying October 2012). In previous years the annual dividend was paid as a single final payment in June. For the year ended 31 January 2012 the final dividend was 4.00p. # Calculated as the difference between the market value of investments and net assets as a percentage of net assets. Half year ended Half year ended 31 July July 2011 % % Ongoing charges (excluding performance fee) Ongoing charges (including performance fee) * * Includes 0.3% once-off effect of providing for future performance fees. Cumulative Performance (Total Returns) to 31 July months 1 year 3 years 5 years % % % % Total shareholder return Net asset value total return MSCI AC Asia Pacific Free Index ( )* total return Source: AIC Services Ltd. Returns include dividends reinvested. * Source: Datastream. Gross dividends reinvested. Investment Performance (Total Returns) to 31 July 2012 (since inception of the multi-manager structure) NAV Total Return Share Price Total Return Index Total Return /05/05 31/05/06 31/05/07 30/05/08 31/05/09 31/05/10 31/05/11 31/05/12 Source: Datastream. 2 Half Year Report 2012

5 Chairman s Statement The half year has been a successful one for the Trust with an increase in the value of the Trust s assets during a difficult market environment, outperformance of the Benchmark index and a decline in the discount. This all occurred whilst the Trust was undergoing the transition to its new three manager structure. Following a careful review and comprehensive search, the Board took the decision to change the manager line-up of the Trust, appointing two new managers to replace Nomura. These changes were implemented in April and set out in the Annual Report. I am pleased to report that the Trust outperformed its benchmark during the period in spite of the costs of the transition. Although it is early days, the change has so far proved successful. The Board significantly increased the dividend at the time of the final results announced in April. It also reaffirmed the policy to increase the payment in real terms in the future. In a further development, this year for the first time we are paying an interim dividend of 2p so that shareholders receive part of their income earlier in the year. Market Background There was a marked contrast between the recovery in equity markets at the start of the year and the uncertain mood which dominated the summer. Firmer than expected growth in the US economy during the (exceptionally mild) winter, together with substantial liquidity injections by the European Central Bank allowed equity markets to recover much of 2011 s lost ground. The optimistic mood dissipated during March, when there was a surge in the oil price related to friction between Iran and other countries over its nuclear programme. This increase in energy costs created a headwind to economic growth, which was already under pressure from the effects of fiscal tightening within Europe and the lagged impact of 2011 s interest rate rises in China and other emerging economies. In the Pacific region, Japanese growth was initially relatively firm, helped by reconstruction following last year s Tohoku earthquake and tsunami. However, weak demand elsewhere and the impact of renewed yen strength sapped optimism, ushering in renewed relative weakness in the market. China s economy has also slowed, as a result of deliberate efforts by the authorities to combat property speculation, as well as export Half Year Report

6 Chairman s Statement continued weakness arising from problems in developed economies. In response, the Chinese authorities began to ease monetary policy to prevent the economic slowdown from going too far, during what is already a year of uncertainty on the political front as a new generation of leaders takes over. The previous two years saw mid-year growth slowdowns usher in equity market corrections, followed by recoveries when the economic news came in better than expected (or feared). Investors are waiting to see whether this pattern repeats itself in Manager Changes In April 2012, the Company appointed Matthews International Capital Management LLC ( Matthews ) and MW GaveKal Asia Limited( GaveKal ) to manage the part of the portfolio previously managed by Nomura. Aberdeen was retained to continue to manage its part of the portfolio. In summary, we have chosen two new managers who we consider will widen the investment opportunities in the regions, strengthen our resources and add new skills and approaches. We described the changes in detail in the Annual Report for the full year ending 31 January 2012 and further information is available on the Company s website ( Performance During the first half of the Company s financial year, the Company achieved a net asset value total return of +2.9%, compared with the benchmark index total return of -1.0%. This outperformance of 3.9% was particularly encouraging since it enabled the Company s shareholders to enjoy a positive return during a period of volatile and declining markets. The share price total return was +7.4%, reflecting the narrower discount at the period end, 8.4% ahead of the benchmark index. It is encouraging that the combination of the two newly appointed managers, Matthews and GaveKal has started well, albeit over a short period, while the Aberdeen-managed part of the portfolio also outperformed. During the six months to 31 July 2012, the Company s discount remained in a stable range of 14-18% for most of the period and in line with its peer group, although discounts in the sector came under pressure in the thin and volatile markets seen during the summer. The Company bought back a total of 186,868 shares for cancellation (0.3% of the total) during the period. Your board believes that it is in shareholders interests to buy back the Company s shares when they are standing at a substantial and anomalous discount to their NAV, with the objective that the discount 4 Half Year Report 2012

7 Chairman s Statement continued The Trust s Equity Portfolio by Geographical Classification as at 31 July 2012 South Korea 5% (8%) Thailand 5% (4%) Taiwan 5% (6%) Australia 10% (12%) China 9% (7%) Singapore 14% (9%) The Philippines 2% (2%) Malaysia 2% (2%) Hong Kong 20% (13%) 31 January 2012 figures in brackets. Source: BNP Paribas Securities Services. Japan 21% (28%) India 4% (6%) Indonesia 3% (3%) Geographical Analysis Investment Managers v Benchmark Index % as at 31 July 2012 Matthews Aberdeen Asia GaveKal Benchmark Australia Aberdeen Matthews GaveKal MSCI AC Asia Pacific Free Index ( ) China Hong Kong India Indonesia Japan Malaysia The Philippines Singapore South Korea Taiwan * Source: BNP Paribas Securities Services. Thailand Half Year Report

8 Chairman s Statement continued The Company s Equity Portfolio by Sector Analysis as at 31 July 2012 Utilities 3% (0%) Telecommunication Services 7% (6%) Other 7% (6%) Consumer Discretionary 9% (11%) Consumer Staples 12% (5%) Materials 7% (12%) Energy 5% (5%) Information Technology 9% (13%) Industrials 9% (11%) Financials 28% (28%) 31 January 2012 figures in brackets. Source: BNP Paribas Securities Services. Healthcare 4% (3%) Sector Analysis Investment Managers v Benchmark Index % as at 31 July 2012 Aberdeen Matthews GaveKal MSCI AC Asia Pacific Free Index ( ) Matthews Aberdeen Asia GaveKal Benchmark Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunication Services Utilities * Source: BNP Paribas Securities Services. Includes Fixed interest securities (predominantly) and equity futures contracts. Other Half Year Report 2012

9 Chairman s Statement continued should be comparable to that of its peers, taking account of the prevailing market conditions. Performance for the half year ended 31 July 2012 and from inception to 31 July 2012 Inception Date Value of Witan Pacific s assets managed m at 31 July 2012 % of Witan Pacific s managed assets (Note 1) Performance half year to 31 July 2012 % Benchmark Performance half year to 31 July 2012 % Performance since inception to 31 July 2012 % (Note 2) Benchmark Performance since inception to 31 July 2012 % (Note 2) Aberdeen 31 May Matthews 30 April * GaveKal 24 April * Notes: 1. Excluding cash balances held centrally by Witan Pacific. 2. Manager performances are gross of management fees and are annualised where inception was before 31 January * Since inception. Source: WM Company, BNP Paribas Securities Services. Gearing The Company believes that the medium term growth prospects for the region are attractive and that it is in shareholders interests to employ moderate levels of gearing with the objective of enhancing returns. The company aims to be around 5% geared on average. At the end of July, net gearing was 4.3%, compared with 3.4% at the end of January. Dividend Income The Company has a policy of aiming to increase the dividend in real terms, ahead of inflation, subject to market conditions. The increases in recent years (set out in the chart on page 8) have been driven both by rising dividend income from the portfolio and a decision to increase the proportion of revenue earnings per share paid out as dividends to shareholders, given the strong revenue reserves. Revenue in the current financial year is running ahead of last year s level, with revenue earnings per share at the half year stage (3.12p) 26% higher than at the half year point in The appointment of Matthews, whose portfolio has a higher yield than that of the Nomura portfolio which it replaces should improve the income of the Trust in the future. The Board has decided this year to introduce the payment of twice yearly dividends rather than a single annual payment, so that shareholders receive income earlier in Half Year Report

10 Chairman s Statement continued the year and more regularly. Accordingly, for the current year an interim payment of 2p will be paid on 19 October 2012 to shareholders on the register on 5 October The Board is hopeful that, in the absence of a material change in the outlook, an increase in the total dividend for the year (which was 4p in 2012) will be possible. The final dividend to be announced with the Annual Results will represent the difference between the dividend decided for the full year and the 2p to be paid this October. Witan Pacific dividends vs. UK CPI since Special dividend 3.5 Regular dividend (n.b reflects interim only) 3.0 UK CPI index since Expenses The continued good performance by Aberdeen means that there was an additional accrual for performance fees amounting to 0.5m. This is lower than the provision made in the comparable period in 2011, which included a revision in the basis for estimating future performance fees payable, boosting accrued costs for that period. There were advisory costs associated with the search for new managers, amounting to 42,000, 0.03% of the total assets. In addition, the estimated cost of the portfolio transition process was 0.6m. This amounted to 0.9% of the assets in transition and 0.4% of the total portfolio. These costs do not fall within the ongoing charges but are reported to ensure transparency. The Board recognises that the costs of changing manager are significant, which is the reason so much care is taken over the selection process. The transition costs were, of course, fully taken into account in the NAVs released during April, when the transition occurred and it is worth emphasising that the significant outperformance recorded during the 6 month period 8 Half Year Report 2012

11 Chairman s Statement continued was after paying the transition costs, in addition to the normal running costs of the Company. The management fees for the two new managers appointed are higher than the basic fee previously payable to Nomura but without an additional performance-related element. This is reflected in a rise in base management fees during the first half of As noted in the Annual Report, the gap between the ongoing charges including and excluding performance fees will narrow now that approximately half the portfolio does not pay any performance fees. It is expected that the ongoing charges in the current year may slightly exceed the Board s target of ongoing charges (excluding performance fees) of 1% or below, although it is encouraging that even after the increased management costs the Company s portfolio outperformed its benchmark by 3.9% during the period. Nonetheless, the Board will continue to manage costs closely, seeking to reduce the ongoing charges as far as possible and ensure that shareholders derive value for money from the higher base management fees. Outlook Economic growth has slowed during 2012, under the influence of austerity policies and political disagreement within the Euro zone, the fear of US fiscal policy tightening after the elections in November and a slowdown in faster-growing economies such as China and Brazil. This slowdown has prompted a fall in commodity prices, providing some relief on the inflation front, in both emerging and developed economies and removes a constraint on the introduction of easier monetary policies to stimulate growth. The summer was marked by poor sentiment in equity markets and periods of volatility. The problems of slow growth and coping with the aftermath of the debt crisis are well known to investors. However, the solutions are likely to be relatively long-term in coming, even assuming the right decisions are made by politicians. With this in mind, there is heightened sensitivity to near-term economic news with the consequent underlying risk of volatility in markets. If growth recovers from the soft patch experienced during the summer then confidence in outlook for corporate profits will improve and the ability of debt-encumbered countries to manage their borrowings will be enhanced. There are some signs that the fall in the oil price has begun to benefit demand in oil-consuming countries, with a gradual, though fragile, improvement in growth forecasts. Monetary policy has also been eased worldwide, which should generate some benefit, at least in Half Year Report

12 Chairman s Statement continued Given the unpredictability of short-term political developments and market sentiment, it is more than ever sensible to view equity investment on a medium term timescale rather than a short-term trading view. With this in mind, our managers are focused on finding well-managed companies, with strong balance sheets, able to drive their own growth prospects, with the aim of delivering long-term returns from growth in earnings and dividends. Gillian Nott Chairman 26 September Half Year Report 2012

13 Portfolio Information at 31 July 2012 Twenty Largest Investments of the Company This Last % of total Value period period* Company Country investments ( ) MW GaveKal Asian Opportunities Fund Far East & Pacific Region ,920 2 (1) Aberdeen Global Indian Equity Fund India 4.2 6,828 3 ( ) QBE Insurance Australia 2.8 4,621 4 ( ) HSBC Holdings Hong Kong/UK 2.7 4,423 5 (17) China Mobile China 2.5 4,179 6 (9) Taiwan Semiconductor Manufacturing Taiwan 2.5 4,129 7 (18) United Overseas Bank Singapore 2.3 3,744 8 ( ) Singapore Tech Engineering Singapore 2.2 3,580 9 (7) Oversea-Chinese Banking Corporation Singapore 2.1 3, (2) Samsung Electronics South Korea 2.0 3, (13) Takeda Pharamaceutical Japan 1.9 3, (10) Canon Japan 1.8 3, (11) Standard Chartered Hong Kong/UK 1.7 2, (4) BHP Billiton Australia/UK 1.7 2, ( ) PTT Exploration & Production Thailand 1.7 2, (8) Petrochina China 1.6 2, (19) Shin-etsu Chemical Japan 1.5 2, (3) Rio Tinto Australia/UK 1.5 2, ( ) Japan Tobacco Japan 1.5 2, ( ) AIA Hong Kong 1.5 2,381 Total ,949 *The figures in brackets denote their position within the top 20 at the previous year end. The country shown is the country of incorporation. The value of the twenty largest holdings represents 49.4% (31 January 2012: 41.2%) of the Company s total investments. Half Year Report

14 Income Statement for the half year ended 31 July 2012 (Unaudited) (Unaudited) (Audited) Half year ended 31 July 2012 Half year ended 31 July 2011 Year ended 31 January 2012 Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total Notes Gains/(losses) on investments held at fair value through profit or loss 3,070 3,070 1,601 1,601 (8,201) (8,201) Exchange losses (343) (343) (92) (92) (25) (25) Income 2 3,079 3,079 2,507 2,507 4,766 4,766 Management fees 3 (306) (306) (238) (238) (499) (499) Performance fees 3 (534) (534) (1,260) (1,260) (1,167) (1,167) Other expenses (440) (29) (469) (368) (29) (397) (786) (50) (836) Net return/(loss) before finance charges and taxation 2,333 2,164 4,497 1, ,121 3,481 (9,443) (5,962) Finance charges (87) (87) (93) (93) (191) (191) Net return/(loss) on ordinary activities before taxation 2,246 2,164 4,410 1, ,028 3,290 (9,443) (6,153) Taxation on ordinary activities (181) (181) (162) (162) (275) (275) Net return/(loss) on ordinary activities after taxation 2,065 2,164 4,229 1, ,866 3,015 (9,443) (6,428) Return/(loss) per Ordinary share pence (14.25) (9.70) All revenue and capital items in the above statement derive from continuing operations. The total columns of this statement represent the Profit and Loss Account of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. The Company had no recognised gains or losses other than those disclosed in the Income Statement. 12 Half Year Report 2012

15 Reconciliation of Movements in Shareholders Funds for the half year ended 31 July 2012 Called up Share Capital share premium redemption Capital Revenue capital account reserve reserves reserve Total Half year ended 31 July 2012 (unaudited) At 31 January , ,012 86,300 12, ,052 Net return on ordinary activities after taxation 2,164 2,065 4,229 Dividends paid in respect of year ended 31 January 2012 (2,645) (2,645) Purchase of own shares (47) 47 (369) (369) At 31 July , ,059 88,095 11, ,267 Half year ended 31 July 2011 (unaudited) At 31 January , ,010 95,762 10, ,282 Net return on ordinary activities after taxation 220 1,646 1,866 Dividends paid in respect of year ended 31 January 2011 (1,855) (1,855) At 31 July , ,010 95,982 10, ,293 Year ended 31 January 2012 (audited) At 31 January , ,010 95,762 10, ,282 Net (loss)/return on ordinary activities after taxation (9,443) 3,015 (6,428) Dividends paid in respect of year ended 31 January 2011 (1,855) (1,855) Write back of dividends over twelve years old Purchase of own shares (2) 2 (19) (19) At 31 January , ,012 86,300 12, ,052 Purchase transaction costs for the half year ended 31 July 2012 were 83,000 (including transition costs) (half year ended 31 July 2011: 40,000; year ended 31 January 2012: 102,000). Sale transaction costs for the half year ended 31 July 2012 were 140,000 (including transition costs) (half year ended 31 July 2011: 44,000; year ended 31 January 2012: 111,000). Half Year Report

16 Balance Sheet at 31 July 2012 (Unaudited) (Unaudited) (Audited) 31 July July January 2012 Notes Fixed assets Investments held at fair value through profit or loss 164, , ,334 Current assets Debtors ,796 Cash at bank and short-term deposits 2,654 4,784 2,462 3,039 5,419 4,258 Creditors: amounts falling due within one year Loans Other (7,000) (8,950) (7,000) (2,611) (2,748) (2,181) (9,611) (11,698) (9,181) Net current liabilities (6,572) (6,279) (4,923) Total assets less current liabilities 157, , ,411 Provision for liabilities and charges 6 (182) (522) (359) Net assets 157, , ,052 Capital and reserves Called up share capital 7 16,512 16,561 16,559 Share premium account Capital redemption reserve 41,059 41,010 41,012 Capital reserves 88,095 95,982 86,300 Revenue reserve 11,596 10,735 12,176 Equity shareholders funds 157, , ,052 Net asset value per Ordinary share pence Half Year Report 2012

17 Cash Flow Statement for the half year ended 31 July 2012 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 July July January 2012 Notes Net cash inflow from operating activities 9 2,221 1,521 2,140 Servicing of finance Bank and loan interest paid (88) (138) (238) Net cash outflow from servicing of finance (88) (138) (238) Capital expenditure and financial investment Purchases of investments (84,761) (19,750) (43,913) Sales of investments 86,396 20,019 43,191 Gains on futures contracts 129 Losses on forward exchange contracts (368) Capital expenses paid (35) (30) (50) Net cash inflow/(outflow) from financial investment 1, (772) Equity dividends paid (2,645) (1,855) (1,783) Net cash inflow/(outflow) before financing 849 (233) (653) Financing Repurchase of own shares (314) (19) Drawdown of bank loan 3,050 1,100 Net cash (outflow)/inflow from financing (314) 3,050 1,081 Increase in cash 535 2, Reconciliation of net cash flow to movements in net debt Increase in cash as above 535 2, Exchange movements (343) (92) (25) Increase in bank loan (3,050) (1,100) Movement in net debt in the period 192 (325) (697) Net debt at start of period (4,538) (3,841) (3,841) Net debt at end of period (4,346) (4,166) (4,538) Half Year Report

18 Notes to the Financial Statements for the half year ended 31 July Accounting policies The Financial Statements have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable Accounting Standards, pronouncements on interim reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies ( SORP ) revised December 2005 and January All of the Company s operations are of a continuing nature. The same accounting policies used for the year ended 31 January 2012 have been applied. 2 Income (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 July July January Overseas dividends 2,838 2,232 4,103 UK dividends Overseas scrip dividends Other income: Bank interest ,079 2,507 4,766 3 Management fee and performance-related management fee On 27 May 2005, the Company appointed Witan Investment Services Limited as Executive Manager and Aberdeen Asset Managers Limited and Nomura Asset Management U.K. Limited as Investment Managers. In April 2012, the Company appointed Matthews International Capital Management LLC and Marshall Wace GaveKal Limited to replace Nomura Asset Management U.K. Limited. Each Management Agreement can be terminated at one month s notice in writing. Each investment Manager is entitled to a base management fee, at rates between 0.20% and 0.75% per annum, calculated according to the value of the assets under their management, Aberdeen is also entitled to a performance fee based on relative outperformance against the MSCI AC Asia Pacific Index (sterling adjusted total return). The performance fee is calculated according to investment performance over a three year rolling period and is payable at a rate of 15% of the calculated outperformance relative to the benchmark (subject to a cap). The provisions included in the Income Statement at 31 July 2012, are calculated on the actual performance of Aberdeen relative to the benchmark index. The provision for the rest of the year assumes that both the benchmark index remains unchanged and that Aberdeen s assets under management perform in line with the benchmark index to 31 May 2013, being the date the performance period ends. In addition, provisions have been made for the performance periods ending 31 May 2014 and 31 May 2015, on the assumption that Aberdeen performs in line with the benchmark to each period end. The total of these provisions amounts to 534, Dividends per Ordinary share An interim dividend of 2p per Ordinary share (2011: nil) will be paid on 19 October 2012 to shareholders on the register on 5 October Half Year Report 2012

19 Notes to the Financial Statements continued 5 Return per Ordinary share The return per Ordinary share is based on the net return attributable to the ordinary shares of 4,229,000 (half year ended 31 July 2011: net return 1,866,000; year ended 31 January 2012: net loss 6,428,000) and on 66,162,098 ordinary shares (half year ended 31 July 2011: 66,244,868; year ended 31 January 2012: 66,244,320) being the weighted average number of ordinary shares in issue during the period. (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 July July January 2012 Revenue return ( 000) 2,065 1,646 3,015 Capital return/(loss) ( 000) 2, (9,443) Total return/(loss) ( 000) 4,229 1,866 (6,428) Weighted average number of ordinary shares in issue during the period 66,162,098 66,244,868 66,244,320 Revenue return per Ordinary share pence Capital return/(loss) per Ordinary share pence (14.25) Total return/(loss) per Ordinary share pence (9.70) 6 Provision for liabilities and charges This represents the estimated performance fees payable for the 3 year performance fee periods ending 31 May 2014 and 31 May This accrual is based on actual performance to 31 July 2012 and the assumption that Aberdeen performs in line with the benchmark from 31 July 2012 to the end of each fee period. Changes in the level of accrual for future performance periods could arise for one of three principal reasons: a change in the degree of relative performance, the elapse of time (since this would increase the proportion of the rolling three-year performance period to which the performance calculation would be applied) or the termination of Aberdeen s contract. 7 Share capital During the half year ended 31 July 2012, the Company repurchased 186,868 ordinary shares for cancellation (half year ended 31 July 2011: nil; year ended 31 January 2012: 10,000 shares) at a total cost of 369,000 (half year ended 31 July 2011: nil; year ended 31 January 2012: 19,000). 8 Net asset value per Ordinary share Net asset value per Ordinary share is based on 66,048,000 ordinary shares of 25p each in issue as 31 July 2012 (31 July 2011: 66,244,868 and 31 January 2012: 66,234,868). Half Year Report

20 Notes to the Financial Statements continued 9 Reconciliation of net revenue return before finance costs and taxation to net cash inflow from operating activities (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 July July January Total return/(loss) before finance charges and taxation 4,497 2,121 (5,962) (Less)/add: capital (return)/loss before finance charges and taxation (2,164) (220) 9,443 Net revenue return before finance costs and taxation 2,333 1,901 3,481 (Increase)/decrease in accrued income and other debtors (33) Increase in creditors 643 1, Expenses charged to capital (534) (1,260) (1,167) Management fee rebate (63) (51) Scrip dividends (7) (216) (493) Overseas withholding tax suffered (181) (162) (275) Net cash inflow from operating activities 2,221 1,521 2, Results The results for the half year ended 31 July 2012 and 31 July 2011, which are unaudited and were not reviewed by the Auditors, constitute non-statutory accounts within the meaning of Section 435 of the Companies Act The latest published accounts which have been delivered to the Registrar of Companies are for the year ended 31 January 2012, the report of the Auditor thereon was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act The comparative figures for the year ended 31 January 2012 have been extracted from those accounts. 18 Half Year Report 2012

21 Regulatory Disclosures Related party transactions No related party transactions took place in the period under review. Principal risk and uncertainties The principal risks faced by the Company for the remaining six months of the financial year include financial risks relating to markets, liquidity and credit. Market risk includes market price risk, currency risk and interest rate risk. Other risk categories include those relating to investment strategy, investment management resources, regulatory requirements, operational structure and the external economic and financial environment. These risks and the way in which they are managed, are described in more detail in the Annual Report for the year ended 31 January 2012 in the Business Review and in the Notes to the Financial Statements. The Report is available on the Company s website at Half Year Report

22 Responsibility Statement of the Directors in respect of the Half Year Report for the six months ended 31 July 2012 The Directors listed on the inside back cover confirm to the best of their knowledge that: (a) the condensed set of financial statements in this Half Year Report, which has been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; (b) the Interim Management Report which comprises the Chairman s Statement and the Regulatory Disclosures above includes a fair review, as required by Disclosure and Transparency Rule R, 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, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and (c) no related parties transactions took place in the first six months of the current financial year and no related parties transactions were described in the last Annual Report of the Company and accordingly there are no disclosures required to be made pursuant to Disclosure and Transparency Rule R. This Half Year Report was approved by the Board on 26 September 2012 and the above responsibility statement was signed on its behalf by: Gillian Nott Chairman 26 September Half Year Report 2012

23 Information for Shareholders Shareholder Communications Website The Company s website is The site provides visitors with a comprehensive range of performance statistics, Company information and literature downloads. The Company s profile is also available on third party sites such as and Annual and Half Year Reports Copies of the annual and half year report may be obtained from Witan Investment Services by calling or by visiting Share Prices and Net Asset Value Information The Company s ordinary 25p shares are quoted on the London Stock Exchange: SEDOL number: ISIN number: GB EPIC code: WPC The codes above may be required to access trading information relating to the Company on the internet. depending on whether you hold shares in your own name (see 1. below) or hold shares through the Witan Wisdom scheme (see 2. below): 1. Shareholders who hold shares in their own name should contact: Computershare Investor Services PLC The Pavilions, Bridgwater Road Bristol BS99 6ZY and should have to hand their Shareholder Reference Number. 2. Investors who hold shares through the Witan Wisdom scheme should contact: Witan Wisdom PO Box 10550, Chelmsford CM99 2BA wisdom@ifdsgroup.co.uk and should have to hand their Witan Wisdom Account Number. AIC The Company is a member of the Association of Investment Companies Share Price Listings The Company s share price is listed daily in selected national newspapers including the Financial Times, The Times and The Daily Telegraph. Electronic Communications with the Company (E-communications) Shareholders and Witan Wisdom scheme members now have the opportunity to be notified by when the Witan Pacific Annual Report, Half Year Reports and other formal communications are available on the Company s website instead of receiving printed copies by post. This reduces the costs to the Company as well as having an environmental benefit in the reduction of paper, printing, energy and water usage. If you have not already elected to receive E-communications from the Company and now wish to do so please contact one of the following Financial Calendar Year End Results announced: Annual Half Year Annual General Meeting Company Registration Company registration number January April September June Enquiries Witan Wisdom Saving Plans address wisdom@ifdsgroup.co.uk Corporate Secretary Half Year Report

24 Information for Shareholders continued Warning to Shareholders Share Fraud Scams Many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based brokers who are very persistent and persuasive and who target UK shareholders, offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or are offered an inflated price for shares they own. These calls come from fraudsters operating in boiler rooms that are mostly based abroad. While high profits are promised, those who buy or sell shares in this way usually lose their money. The Financial Services Authority (FSA) has found most share fraud victims are experienced investors who lose an average of 20,000, with around 20m lost in the UK each year. If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you should take these steps before handing over any money: 1. Get the name of the person and organisation contacting you. 2. Check the FSA Register at register to ensure they are authorised. 3. Use the details on the FSA Register to contact the firm. 4. If there are no contact details on the Register or you are told they are out of date, call the FSA Consumer Helpline on Search the FSA list of unauthorised firms and individuals with whom you should avoid any business dealings. 6. Remember: If it sounds too good to be true, it probably is! If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong. Report a Scam If you are approached about a share scam you should tell the FSA using the share fraud reporting form at where you can find out about the latest investment scams. You can also call the Consumer Helpline on If you have already paid money to share fraudsters you should contact Action Fraud on Details of any share dealing facilities that the Company endorses will be included in Company mailings. Please note that it is very unlikely that either the Company or the Company s Registrar, Computershare Investor Services PLC, would make unsolicited telephone calls to shareholders. Any such calls would relate only to official documentation already circulated to shareholders and never in respect of investment advice. If you are in any doubt about an unsolicited phone call, please call either the Company Secretary or the Registrar at the numbers provided at the back of this Annual Report. 22 Half Year Report 2012

25 How to Invest There are a variety of ways to invest in Witan Pacific Investment Trust plc. Naturally, Witan Pacific s shares can be traded through any UK stockbroker; however, Witan Pacific is also available for investment through the savings scheme managed by Witan Investment Services Witan Wisdom. Witan Wisdom Witan Wisdom offers two different savings wrappers: The Witan Wisdom ISA is a stocks and shares ISA that enables investors to buy Witan Pacific shares within a tax efficient wrapper. Investors have an annual ISA allowance of up to 11,280 for the 2012/13 tax year. The minimum lump sum investment with Witan Wisdom is 2,000 with the regular savings minimum being 100 per month. You can also transfer existing ISAs to Witan Wisdom while retaining their tax efficient wrapper during and after transfer. The Witan Wisdom Share Plan is a straightforward, low-cost savings scheme. The minimum lump sum investment is 500, and the minimum regular contribution is 50 per month or quarter. There is no maximum. Accounts can also be held jointly, or designated to a child. Brochures and application forms which include the terms and conditions for all of our products are available by calling or online via If you would prefer to write to request further information, the address details can be found at the back of this Report. Investors are reminded that the value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. A Glossary of the Terms frequently used in the investment trust sector is available on the Company s website at Please note that tax assumptions may change if the law changes, and the value of tax relief (if any) will depend upon your individual circumstances. Investors should consult their own tax advisers in order to understand any applicable tax consequences. Witan Pacific Investment Trust plc is an equity investment. Issued and approved by Witan Investment Services Limited. Witan Investment Services Limited of 14 Queen Anne s Gate, London SW1H 9AA is registered in England number Witan Investment Services provides investment products and services and is authorised and regulated by the Financial Services Authority. We may record telephone calls for our mutual protection and to improve customer service. Other ways to invest Private Client Stockbrokers If you have a lump sum to invest you may want to contact a private client stockbroker. They can manage your entire portfolio of shares and will advise you on your investments. A list of private client stockbrokers is available from the Association of Private Client Stockbrokers and Investment Managers at Online Stockbroking Services In addition to the Witan Wisdom service there are a number of real time execution only stockbroker services which allow you to trade online, manage a portfolio and buy UK listed shares. Many such websites ask for a Stock Exchange code which for Witan Pacific is WPC. Half Year Report

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27 Directors Gillian Nott OBE Chairman Alan Barber Audit Committee Chairman Sarah Bates Senior Independent Director Dermot McMeekin Diane Seymour-Williams All the Directors are Members of the Audit and Management Engagement Committee and of the Nomination and Remuneration Committee. Executive Manager Witan Investment Services Limited 14 Queen Anne s Gate London SW1H 9AA Investment Managers Aberdeen Asset Managers Limited 10 Queen s Terrace Aberdeen AB10 1YG Matthews International Capital Management, LLC Four Embarcadero Center, Suite 550 San Francisco, USA Marshall Wace GaveKal Asia Limited Suites , 28th Floor One International Finance Centre 1 Harbour View Road, Central, Hong Kong Corporate Secretary and Registered Office Phoenix Administration Services Limited Springfield Lodge Colchester Road Chelmsford Essex CM2 5PW Telephone: cosec@phoenixfundservices.com Website: Fund Accountants and Administrator BNP Paribas Securities Services 55 Moorgate London EC2R 6PA Independent Auditors PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors 7 More London Riverside London SE1 2RT Custodian and Bankers J.P. Morgan Chase Bank, N.A. London Branch 125 London Wall London EC2Y 5AJ The Royal Bank of Scotland plc 7th Floor 135 Bishopsgate London EC2M 3UR Registrars Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZY Telephone: Facsimile: Calls cost approximately 3.0p per minute plus network extras web.queries@computershare.co.uk Website: Authorised and regulated in the UK by the UK Financial Services Authority Witan Wisdom Schemes Witan Wisdom PO Box Chelmsford CM99 2BA Telephone: wisdom@ifdsgroup.co.uk Stockbrokers J.P. Morgan Cazenove 25 Bank Street London E14 5JP Printed on Revive 50:50 Silk, a recycled paper containing 50% recycled waste and 50% virgin fibre. Pulps used are elemental chlorine free process, manufactured at a mill certified with the ISO environmental management standard. The FSC logo identifies products which contain wood from well-managed forests certified in accordance with the rules of the Forest Stewardship Council.

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