Half-yearly Report
BRITISH & AMERICAN INVESTMENT TRUST PLC
GROUP FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2010
Unaudited Unaudited Audited
6 months 6 months Year ended
to 30 to 30 31
June June December
2010 2009 2009
£'000 £'000 £'000
Revenue
Return before tax 1,067 745 1,624
Earnings per £1 ordinary shares - 3.56p 2.41p 5.07p
basic (note 4)
Earnings per £1 ordinary shares - 3.04p 2.22p 4.62p
diluted (note 4)
Capital
Total equity 29,019 30,312 31,037
Revenue reserve (note 7) 686 853 844
Capital reserve (note 7) (6,667) (5,541) (4,807)
Net assets per ordinary share (note 5)
- Basic £0.76 £0.81 £0.84
- Diluted £0.83 £0.87 £0.89
Diluted net assets per ordinary share £0.86
at 20 August 2010
Dividends*
Dividends per ordinary share (note 3) 2.7p 2.7p 6.9p
Dividends per preference share (note 1.75p 1.75p 3.5p
3)
* Dividends declared for the period. Dividends shown in the accounts are, by
contrast, dividends paid or approved
in the period.
Copies of this report will be posted to shareholders and be available for
download at the company's website: www.baitgroup.co.uk.
GROUP INVESTMENT PORTFOLIO
As at 30 June 2010
Company Nature of Business Valuation Percentage
£'000 of
portfolio
%
Geron Corporation Biomedical - USA 7,410 26.68*
RIT Capital Partners Investment Trust 3,097 11.15
Prudential Life Assurance 2,543 9.15
Alliance Trust Investment Trust 2,126 7.65
Dunedin Income Growth Investment Trust 1,765 6.35
Electra Private Equity Investment Trust 1,688 6.08
British Assets Trust Investment Trust 1,605 5.78
St. James's Place International Unit Trust 1,349 4.86
Scottish American Investment Investment Trust 764 2.75
Company
Invesco Income Growth Trust Investment Trust 511 1.84
Royal & Sun Alliance Insurance Insurance - Non - Life 446 1.60
Group - Cum. irred. preference
shares
F&C Asset Management - 6.75% FRN General financial 438 1.58
Sub.Bonds 2026
Rothschilds Continuation Finance - Financial 403 1.45
Notes
Shires Income Investment Trust 349 1.26
Merchants Trust Investment Trust 326 1.17
BT Group Telecommunications 260 0.94
Barclays - 9% PIB Capital Bonds Bank retail 239 0.86
Matrix Chatham Maritime EZT Enterprise Zone Trust 205 0.74
(unquoted)
Second Downing EZT (unquoted) Enterprise Zone Trust 203 0.73
Capital Shopping Centres Property 171 0.62
20 Largest investments 25,898 93.24
Other investments (number of 1,878 6.76
holdings : 35)
Total investments 27,776 100.00
*Geron Corporation. 18.08% held by the company and 8.6% held by subsidiaries.
In addition the Group holds net £1,025,000 of put options in Geron Corporation
as part of its hedging strategy.
BRITISH & AMERICAN INVESTMENT TRUST PLC30 June 20022002
Unaudited Interim Report
30 June 2010
Registered number : 433137
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
Website: www.baitgroup.co.uk
Chairman's Statement
I report our results for the 6 months to 30 June 2010.
Revenue
The profit on the revenue account before tax amounted to £1.1 million (30 June
2009: £0.8 million), an increase of 43 percent, continuing the return of
revenues levels to those achieved prior to the financial crisis of the last two
years.
A loss of £1.8 million (30 June 2009: £2.5 million gain) was registered on the
capital account, incorporating a realised loss of £0.6 million (30 June 2009: £
1.2 million loss) and unrealised loss of £1.2 million (30 June 2009: £3.8
million gain). This capital loss reflected the decline in equity markets
generally over the period as noted below.
The revenue earnings per ordinary share were 3.6 pence on an undiluted basis
(30 June 2009: 2.4 pence) and 3.0 pence on a fully diluted basis (30 June 2009:
2.2 pence).
Net Assets
Group net assets were £29.0 million (£31.0 million, at 31 December 2009), a
decrease of 6.5 percent. This represents a modest out-performance compared to
the falls in FTSE 100 and All Share benchmark indices which decreased by 9.2
percent and 7.9 percent, respectively over the same six month period. On a
total return basis, after adding back dividends paid during the period, group
net assets decreased by 2.5 percent, increasing the out-performance by a
further approximately 2 percent. The net asset value per £1 ordinary share was
76 pence (prior charges deducted at par) and 83 pence on a fully diluted basis.
Our net assets followed the market over the period which was characterised by a
high level of volatility in all stocks. The market achieved a high point in
April registering an increase of 6 percent from the opening 2010 level but then
declined in the final two months to register a loss of almost 10 percent over
the 6 month period. This volatility, coming after the significant recovery in
equities markets in 2009 after the financial crisis of 2007/8, indicated
growing indecision in markets about the continued pace of global economic
recovery and could be seen as an inflection point for markets to continue or
reverse the upward trend of the prior year.
Dividend and performance
We intend to pay an interim dividend of 2.7 pence per ordinary share on 11
November 2010 to shareholders on the register at 15 October 2010. This
represents an unchanged dividend from last year's interim dividend. A
preference dividend of 1.75 pence will be paid to preference shareholders on
the same date.
The out-performance of our portfolio against our benchmark indices over the
period has been noted above. Given the volatility in all market constituents,
including in US equities and currencies, and the allied lack of any particular
trends, there is no single element that can be singled out over the period for
useful comment. It is worth noting, however, that the portfolio remains fully
invested and despite the unprecedented swings in equities and currency markets
over the past two and a half years, the company has outperformed its benchmark
indices on a total return basis over this very turbulent and unpredictable
period.
As at 20 August, group net assets were £30.2 million, an increase of 4.1
percent since 30 June. This compares with an increase of 5.7 percent in the
FTSE 100 index and an increase of 5.4 percent in the All Share index over the
same period, and is equivalent to 81 pence per share (prior charges deducted at
par) and 86 pence per share on a fully diluted basis.
Changes to investment trust company regulation
We note with interest the changes to the rules governing the operation of
authorised investment trust companies proposed by the government for next year.
In general, the proposed changes significantly improve and simplify the
operation of investment trusts in respect of portfolio and risk management,
reporting and compliance and will be welcomed by the industry. In some areas,
however, the proposed changes appear to discriminate against smaller and more
esoteric trusts such as ourselves which nevertheless offer investors a greater
choice of investment opportunity. The proposed changes are currently subject to
a formal consultation process and the Association of Investment Companies will
be responding to the consultation document on behalf of its members.
Outlook
As I reported in April, the general recovery in global financial markets which
commenced in 2009 continued into 2010 as economic activity and company profits
continued to grow. Sentiment remained generally firm in these opening months of
the year, but given the extent of the recovery over a relatively short period
of time, it was always vulnerable to any disappointments or unexpected
setbacks.
In the event, April became the high point in the equity market's recovery and
in the months since then a decline of 17 percent has been registered as data
showed a softening in economic growth and job creation in the USA and European
countries. This re-ignited investors' concerns about the sustainability of the
recovery and the potential for a return to recession.
At this point, there is very little consensus amongst forecasters on any of the
major economic trends. Economists and investment professionals appear to be
split on whether growth can continue in the major economies or whether a
`double dip' recession will be experienced. Central bankers are unclear about
whether monetary and fiscal policy will lead to renewed inflation or the risk
of deflation. Commercial banks have proved unable to implement government
policies to re-invigorate commercial lending while repairing balance sheets.
What seems clear, however, is that interest rates are likely to remain at their
current historically low levels for some considerable period of time to
encourage growth and investment. For investors, this remains good news
particularly at a time when on most measurements (P/E ratio and equity/gilt
yield comparison) equities remain cheap. However, in the light of recent market
experience, investors currently have very little risk appetite and are
reluctant to commit funds to equities, despite receiving very low returns on
government bonds or cash.
Against this highly confusing and uncertain background, we will continue to
remain fully invested in our long term and income generating strategies that
are based primarily on equity investment.
Anthony Townsend
27 August 2010
Managing Director's Report
Performance
In the first six months of 2010, both UK and US equity markets experienced
considerable volatility, moving by a combined amount (peak to trough) of
approximately 15 percent over the period and registering declines of 9 percent
and 6 percent, respectively, by period end. As reported in April, the recovery
in markets up to that time had been swift and dramatic, leaving open the
potential for a significant correction which indeed occurred in the following
months. Growth forecasts for the USA and other developed markets began to be
adjusted downwards based on results from a number of indicators including
production indices, corporate profitability, employment, housing starts and
commodities prices. In addition, further volatility in currencies occurred, in
particular in the Euro as confidence weakened in the ability of periphery
member countries' ability to maintain recovery.
There was therefore a general weakening in investment sentiment in the second
quarter together with a clear move away from risk. Equity markets came under
pressure as a result with capital moving decisively into US government bonds or
even cash, specifically US dollars. This was despite what would be normally
seen as a range of factors favourable for equity investment, including
historically low interest rates, recovery in corporate profitability, and
cheapness in long-term valuation measurements such as P/E ratios and equity/
bond yield comparators. Indeed, specifically in relation to the latter, the
yield on equities has recently moved to its largest premium over bonds for many
decades and on the few occasions in the past that the equity yield even just
matched that of bonds, it has always been seen as a strong buy signal for
equities. It is clear, however, that in the current volatile market conditions,
investors do not have the necessary confidence to act on this signal.
As noted above, our portfolio outperformed its benchmark indices on both a NAV
and total return basis over the period. This was partly due to the maintenance
of the price in sterling terms of our large US investment, Geron Corporation,
over the period. While the US dollar price of Geron tracked the market down
over the period, a strengthening in the US dollar versus sterling resulted in a
stable value over the period. It should be also be noted that shortly after the
period end, Geron announced the long awaited resumption of its highly important
clinical embryonic stem cell trials for spinal injury in the USA after
receiving clearance from the FDA.
Outlook
As is evident from the above, a great deal of uncertainty and even confusion
can be seen in markets generally at this time. The likely direction and extent
of equity market movement over the coming period is impossible to gauge and
will depend ultimately on whether the global economic recovery can now be
sustained or whether a return to recession or a period of stagnation or below
trend growth is in prospect. Governments and central banks are clearly
straining every policy muscle through low interest rates and liquidity
provision to support the recovery through this period of doubt, while realising
that the major task of deleveraging their economies and the financial system
remains to be tackled.
It would appear likely and reasonable that continuation of the generally above
trend growth rates seen in the early stages of the recovery will not be
continued. Therefore for developed countries to sustain even minimal levels of
growth against a background of domestic financial and fiscal retrenchment over
the years to come, improvements in external activities, namely exports, will
have to be relied upon. This requires some degree of competitive currency
depreciation to encourage trade, as has been seen over the last year in the US,
UK and German economies. In addition at least some economies, namely China and
other far east countries, will also have to provide demand through domestic
expansion.
As a traditional fund with exposure to UK and US equities as well as fixed
interest and property, we remain fully invested and will continue with our
current investment strategy to achieve a balance of income and growth against
the uncertainties currently presented in the financial markets.
Jonathan C Woolf
27 August 2010
CONSOLIDATED INCOME STATEMENT
Six months ended 30
June 2010
Unaudited Unaudited Audited
6 months to 30 June 6 months to 30 June Year ended 31 December
2010 2009 2009
Note Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment income 2 1,231 - 1,231 930 - 930 1,967 - 1,967
Holding (losses)/ (1,165) (1,165)
gains on 3,773 3,773
investments at - - - 4,350 4,350
fair value through
profit or loss
Losses on disposal (604) (604) (1,195) (1,195) (937) (937)
of investments at - -
fair value through -
profit or loss
Expenses (164) (91) (255) (185) (84) (269) (343) (185) (528)
(1,860) (793)
(Loss)/profit 1,067 745 2,494 3,239 1,624 3,228 4,852
before tax
Taxation - - - 33 - 33 (5) - (5)
(Loss)/profit for (1,860) (793)
the period 1,067 778 2,494 3,272 1,619 3,228 4,847
Earnings per 4
ordinary share
Basic 3.56p (7.44)p (3.88)p 2.41p 9.98p 12.39p 5.07p 12.91p 17.98p
Diluted 3.04p (5.31)p (2.27)p 2.22p 7.13p 9.35p 4.62p 9.22p 13.84p
The group does not have any income or expense that is not included in the
profit for the period. Accordingly, the `(Loss)/profit 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 is the Group's Income Statement, prepared in
accordance with IFRS.
The supplementary revenue return and capital return columns are both prepared
under guidelines 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.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June 2010
Unaudited
Six months ended 30 June 2010
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 2009 35,000 (4,807) 844 31,037
(Loss)/profit for the period - (1,860) 1,067 (793)
Ordinary dividend paid - - (1,050) (1,050)
Preference dividend paid - - (175) (175)
Balance at 30 June 2010 35,000 (6,667) 686 29,019
Unaudited
Six months ended 30 June 2009
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 2008 35,000 (8,035) 1,225 28,190
Profit for the period - 2,494 778 3,272
Ordinary dividend paid - - (975) (975)
Preference dividend paid - - (175) (175)
Balance at 30 June 2009 35,000 (5,541) 853 30,312
Audited
Year ended 31 December 2009
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 2008 35,000 (8,035) 1,225 28,190
Profit for the period - 3,228 1,619 4,847
Ordinary dividend paid - - (1,650) (1,650)
Preference dividend paid - - (350) (350)
Balance at 31 December 2009 35,000 (4,807) 844 31,037
CONSOLIDATED BALANCE SHEET
As at 30 June 2010
Unaudited Unaudited Audited
30 June 30 June 31
2010 2009 December
£'000 £'000 2009
£'000
Non-current assets
Investments - fair value
through profit or loss (note 27,776 30,850 29,385
1)
Current assets
Receivables 310 982 109
Derivatives - fair value 1,922 1,215 1,335
through profit or loss
Cash and cash equivalents 248 372 985
2,480 2,569 2,429
Total assets 30,256 33,419 31,814
Current liabilities
Trade and other payables (143) (2,346) (62)
Current tax - (5) -
Other current liabilities (197) (149) (122)
Derivatives - fair value (897) (607) (593)
through profit or loss
(1,237) (3,107) (777)
Total assets less current 29,019 30,312 31,037
liabilities
Net assets 29,019 30,312 31,037
Equity attributable to equity
holders
Ordinary share capital 25,000 25,000 25,000
Convertible preference share 10,000 10,000 10,000
capital
Capital reserve (6,667) (5,541) (4,807)
Retained revenue earnings 686 853 844
Total equity 29,019 30,312 31,037
Net assets per ordinary share £0.76 £0.81 £0.84
- basic
Net assets per ordinary share £0.83 £0.87 £0.89
- diluted
CONSOLIDATED CASHFLOW STATEMENT
Six months ended 30 June 2010
Unaudited Unaudited Audited
6 months 6 months Year
to to 30 ended
30 June June 31
2010 2009 December
£'000 £'000 2009
£'000
Cash flow from operating activities
(Loss)/profit before tax (793) 3,239 4,852
Adjustment for:
Losses/(profits) on investments 1,769 (2,578) (3,413)
Scrip dividends (164) (3) (6)
Film income tax deducted at source (1) (1) (5)
Proceeds on disposal of investments
at fair value
through profit or loss 5,036 8,526 17,756
Purchases of investments at fair
value
through profit or loss (4,457) (8,026) (16,995)
Operating cash flows before movements
in working capital 1,390 1,157 2,189
Increase in receivables (1,944) (230) (869)
Increase/(decrease) in payables 1,042 (269) 771
Net cash from operating activities
before income taxes 488 658 2,091
Income taxes (paid)/received - - 30
Net cash flows from operating 488 658 2,121
activities
Cash flow from financing activities
Dividends paid on ordinary shares (1,050) (975) (1,650)
Dividends paid on preference shares (175) (175) (350)
Net cash used in financing activities (1,225) (1,150) (2,000)
Net (decrease)/increase in cash and (737) (492)
cash 121
equivalents
Cash and cash equivalents at 985 864 864
beginning of period
Cash and cash equivalents at end of 248 372 985
period
NOTES TO THE gROUP RESULTS
Accounting policies
Basis of preparation
This interim report is prepared in accordance with IAS 34 and on the basis of
the accounting policies set out in the group and company's annual Report and
Accounts at 31 December 2009.
Basis of consolidation
These consolidated condensed financial statements incorporate the financial
statements of the company and its subsidiary undertakings made up to 30 June.
Control is achieved where the company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its
activities. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Significant accounting policies
In order better to reflect the activities of an investment trust company and in
accordance with guidance issued by the Association of Investment Companies
(AIC), supplementary information which analyses the income statement between
items of a revenue and capital nature has been presented alongside the income
statement. In accordance with the company's status as a UK investment company
under section 833 of the Companies Act 2006, net capital returns may not be
distributed by way of dividend.
As the entity's business is investing in financial assets with a view to
profiting from their total return in the form of interest, dividends or
increases in fair value, listed equities and fixed income securities are
designated as fair value through profit or loss on initial recognition. The
group manages and evaluates the performance of these investments on a fair
value basis in accordance with its investment strategy, and information about
the group is provided internally on this basis to the entity's key management
personnel.
Investments held at fair value through profit or loss, including derivatives
held for trading, are initially recognised at fair value.
All purchases and sales of investments are recognised on the trade date.
After initial recognition, investments, which are designated as at fair value
through profit or loss, are measured at fair value. Gains or losses on
investments designated as at fair value through profit or loss are included in
net profit or loss as a capital item, and material transaction costs on
acquisition and disposal of investments are expensed and included in the
capital column of the income statement. For investments that are actively
traded in organised financial markets, fair value is determined by reference to
Stock Exchange quoted market bid prices or last traded prices, depending upon
the convention of the exchange on which the investment is quoted at the close
of business on the balance sheet date. Investments in units of unit trusts or
shares in OEICs are valued at the closing price released by the relevant
investment manager.
In respect of unquoted investments, or where the market for a financial
instrument is not active, fair value is established by using an appropriate
valuation technique.
Investments in subsidiary companies are held at the fair value of their
underlying assets and liabilities. Where a subsidiary has negative net assets
it is included in investments at nil value and a provision made against it on
the balance sheet..
Dividend income from investments is recognised as income when the shareholders'
rights to receive payment has been established, normally the ex-dividend date.
Interest income on fixed interest securities is recognised on a time
apportionment basis so as to reflect the effective interest rate of the
security.
Property EZT income is recognised on the date the distribution is receivable.
Film royalty income is recognised on receipt of royalty statements covering
periods ending in the financial year.
When special dividends are received, the underlying circumstances are reviewed
on a case by case basis in determining whether the amount is capital or income
in nature. Amounts recognised as income will form part of the company's
distribution. Any tax thereon will follow the accounting treatment of the
principal amount.
All expenses are accounted for on an accruals basis. Expenses are charged as
revenue items in the income statement except as follows:
- transaction costs which are incurred on the purchase or sale of an investment
designated as fair value through profit or loss are expensed and included in
the capital column of the income statement;
- expenses are split and presented partly as capital items where a connection
with the maintenance or enhancement of the value of the investments held can be
demonstrated, and accordingly investment management and related costs have been
allocated 50% (2009 - 50%) to revenue and 50% (2009 -50%) to capital, in order
to reflect the directors' long-term view of the nature of the expected
investment returns of the company.
The 3.5% cumulative convertible non-redeemable preference shares issued by the
company are classified as equity instruments in accordance with IAS 32
`Financial Instruments - Disclosure and Presentation' and FRS 25 as the company
has no contractual obligation to redeem the preference shares for cash or pay
preference dividends unless similar dividends are declared to ordinary
shareholders.
Segmental reporting
The directors are of the opinion that the Group is engaged in a single segment
of business, that is investment business, and therefore no segmental reporting
is provided.
2. Investment income
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 ended
June June 31
2010 2009 December
£'000 £'000 2009
£'000
Income from investments 1,207 933 1,961
Other income/ (loss) 24 (3) 6
1,231 930 1,967
3. Proposed dividends
Unaudited Unaudited
6 months to 30 June 6 months to 30
2010 June 2009
Pence per Pence per
share £ share £
Ordinary shares - interim 2.7 675,000 2.7 675,000
Preference shares - fixed 1.75 175,000 1.75 175,000
850,000 850,000
The directors have declared an interim dividend of 2.7p (2009 - 2.7p) per
ordinary share, payable on 11 November 2010 to shareholders registered on 15
October 2010. The shares will be quoted ex-dividend on 13 October 2010.
The dividends on ordinary shares are based on 25,000,000 ordinary £1 shares.
Dividends on preference shares are based on 10,000,000 non-voting 3.5%
convertible preference shares of £1.
The holders of the 3.5% convertible preference shares will be paid a dividend
of £175,000 being 1.75p per share. The payment will be made on the same date as
the dividend to the ordinary shareholders.
Amounts recognised as distributions to ordinary shareholders in the period:
Unaudited Unaudited
6 months to 30 June 6 months to 30
2010 June 2009
Pence per Pence
share £ per £
share
Ordinary shares - final 4.2 1,050,000 3.9 975,000
Preference shares - fixed 1.75 175,000 1.75 175,000
1,225,000 1,150,000
4. Earnings per ordinary share
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to ended
June 30 June 31
2010 2009 December
£'000 £'000 2009
£'000
Basic earnings per share
Calculated on the basis of:
Net revenue profit after preference 892 603 1,269
dividends
Net capital (loss)/profit (1,860) 2,494 3,228
Net total earnings after preference (968) 3,097 4,497
dividends
Ordinary shares in issue 25,000 25,000 25,000
Diluted earnings per share
Calculated on the basis of:
Net revenue profit 1,067 778 1,619
Net capital (loss)/profit (1,860) 2,494 3,228
(Loss)/profit after taxation (793) 3,272 4,847
Ordinary and preference shares in issue 35,000 35,000 35,000
Diluted earnings per share is calculated taking into account the preference
shares which are convertible to ordinary shares on a one for one basis, under
certain conditions, at any time during the period 1 January 2006 to 31 December
2025 (both dates inclusive).
5. Net asset value attributable to each share
Basic net asset value attributable to each share has been calculated by
reference to 25,000,000 ordinary shares, and group net assets attributable to
shareholders as follows:
Unaudited Unaudited Audited
30 June 30 June 31
2010 2009 December
£'000 £'000 2009
£'000
Total net assets 29,019 30,312 31,037
Less convertible preference shares (10,000) (10,000) (10,000)
Net assets attributable to ordinary 19,019 20,312 21,037
shareholders
Diluted net asset value is calculated on the total net assets in the table
above and on 35,000,000 shares, taking into account the preference shares which
are convertible to ordinary shares on a one for one basis, under certain
conditions, at any time during the period 1 January 2006 to 31 December 2025
(both dates inclusive).
6. Financial information
This interim statement is not the company's statutory accounts. The statutory
accounts for the year ended 31 December 2009 have been delivered to the
Registrar of Companies and received an audit report which was unqualified, did
not include a reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report, and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The Interim Report will be sent to the company's shareholders shortly, and
members of the public may obtain a copy at that time on application to the
company's registered office or by download at the company's website
www.baitgroup.co.uk.
7. Retained earnings
The table below shows the movement in the retained earnings analysed between
revenue and capital items.
Capital Retained
reserve earnings
£'000
£'000
1 January 2010 (4,807) 844
Allocation of (loss)/profit for the year (1,860) 1,067
Ordinary and preference dividends paid - (1,225)
At 30 June 2010 (6,667) 686
The capital reserve includes £6,389,000 of investment holding gains (30 June
2009 - £6,138,000,
31 December 2009 - £7,028,000).
DIRECTORS' RESPONSIBILITIES STATEMENT
Principal risks and uncertainties
The principal risks and uncertainties faced by the company continue to be as
described in the previous annual accounts. Further information on each of these
areas, together with the risks associated with the company's financial
instruments are shown in the Directors' Report and notes to the financial
statements within the Annual Report and Accounts for the year ended 31 December
2009.
The Chairman's Statement and Managing Director's report include commentary on
the main factors affecting the investment portfolio during the period and the
outlook for the remainder of the year.
Directors' responsibilities statement
The Directors are responsible for preparing the half-yearly report in
accordance with applicable law and regulations. The Directors confirm that to
the best of their knowledge the interim financial statements, within the
half-yearly report, have been prepared in accordance with IAS 34 'Interim
Financial Reporting'. The Directors further confirm that the Chairman's
Statement and Managing Director's Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FSA's Disclosure and
Transparency Rules.
The Directors of the company are listed in the section preceding the Chairman's
Statement.
The half-yearly report was approved by the Board on 27 August 2010 and the
above responsibility statement was signed on its behalf by:
Jonathan C Woolf
INDEPENDENT REVIEW REPORT TO
BRITISH & AMERICAN INVESTMENT TRUST PLC
Introduction
We have been engaged by the company to review the condensed set of consolidated
financial statements in the half-yearly financial report for the six months
ended 30 June 2010 which comprises the Consolidated Income Statement, the
Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet,
the Consolidated Cashflow Statement and the related explanatory notes. We have
read the other information contained in the half yearly financial report, which
comprises only the Group Financial Highlights, the Chairman's Statement, the
Managing Director's Report, the Group Investment Portfolio and the Directors
responsibilities statement, and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the company in accordance with guidance contained
in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review work has been
undertaken so that we might state to the company those matters we are required
to state to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company, for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.
As disclosed in Note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting,' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2010 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
GRANT THORNTON UK LLP
AUDITOR
London
27 August 2010
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