Half-yearly Report
BRITISH & AMERICAN INVESTMENT TRUST
PLC
GROUP FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2012
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Revenue
Return before tax 879 1,045 2,587
Earnings per £1 ordinary shares - 2.81p 3.47p 8.93p
basic (note 4)
Earnings per £1 ordinary shares - 2.51p 2.98p 7.38p
diluted (note 4)
Capital
Total equity 23,297 30,045 23,430
Revenue reserve (note 7) 870 653 1,341
Capital reserve (note 7) (12,573) (5,608) (12,911)
Net assets per ordinary share (note
5)
- Basic £0.53 £0.80 £0.54
- Diluted £0.67 £0.86 £0.67
Diluted net assets per ordinary share £0.71
at 24 August 2012
Dividends*
Dividends per ordinary share (note 3) 2.7p 2.7p 7.4p
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 2012
Company Nature of Valuation Percentage of
Business £ portfolio
'000 %
Geron Corporation Biomedical - 3,768 17.44*
USA
RIT Capital Partners Investment 3,307 15.31
Trust
Prudential Life Assurance 2,413 11.17
Dunedin Income Growth Investment 2,162 10.01
Trust
British Assets Trust Investment 1,725 7.98
Trust
St. James's Place International Unit Trust 1,407 6.51
Scottish American Investment Company Investment 868 4.02
Trust
Invesco Income Growth Trust Investment 641 2.97
Trust
Alliance Trust Investment 616 2.85
Trust
Royal & Sun Alliance Insurance Group - Insurance -
Cum. irred. preference shares Non-Life 468 2.17
Rothschilds Continuation Finance - Financial
Notes 424 1.96
Electra Private Equity Investment
Trust 411 1.90
F&C Asset Management - 6.75% FRN General
Sub.Bonds 2026 Financial 406 1.88
Shires Income Investment
Trust 381 1.76
Merchants Trust Investment
Trust 367 1.70
Earthport Software & 216 1.00
Computer
Services
Barclays - 9% PIB Capital Bonds Bank retail 213 0.99
Emblaze Software & 176 0.82
Computer
Services
Jupiter Income Trust Unit Trust 171 0.79
St. James's Place Life Assurance 167 0.77
20 Largest investments 20,307 94.00
Other investments (number of holdings 1,297 6.00
: 31)
Total investments 21,604 100.00
*Geron Corporation. 7.55% held by the company and 9.89% held by subsidiaries.
In addition the Group holds net purchases of £1,518,000 of put options in Geron
Corporation as part of its hedging strategy.
Unaudited Interim Report
30 June 2012
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 2012.
Revenue
The profit on the revenue account before tax amounted to £0.9 million (30 June
2011: £1.0 million), a decrease of 16 percent reflecting a lower level of
special dividends received in the period.
A gain of £0.4 million (30 June 2011: £1.8 million loss) was registered on the
capital account before capitalised expenses, incorporating a realised loss of £
0.6 million (30 June 2011: £0.6 million loss) and an unrealised gain of £1.0
million (30 June 2011: £1.2 million loss). This turnaround from unrealised loss
in the previous year to unrealised gain reflected principally modest gains
associated with our largest US investment, Geron Corporation, as noted below.
The revenue earnings per ordinary share were 2.8 pence on an undiluted basis
(30 June 2011: 3.5 pence) and 2.5 pence on a fully diluted basis (30 June 2011:
3.0 pence).
Net Assets and performance
Group net assets were £23.3 million (£23.4 million, at 31 December 2011), a
decrease of 0.6 percent. Over the same six month period, the FTSE 100 index
remained flat and the All Share index decreased by 0.6 percent. On a total
return basis, after adding back dividends paid during the period, group net
assets increased by 5.2 percent compared to a total return on the index of
approximately 2.2 percent. The net asset value per £1 ordinary share was 53
pence (prior charges deducted at par) and 67 pence on a fully diluted basis.
As noted above, the UK stock market finished the period little changed from its
level at the beginning of the year. In the US, the stock market achieved a
rise of 5.4 percent; however, over the period a similar pattern was seen in
both countries with the markets rising steadily in the first four months of the
year by around 7 percent, followed by a sharp drop to below year opening levels
as concerns resurfaced internationally for the over-indebted economies within
the euro area and doubts about the prospects for global growth. The economic
and investment themes of the period are set out in more detail in the Managing
director's report below.
As at 24 August, group net assets were £24.8 million, an increase of 6.5
percent since 30 June. This compares with an increase of 3.7 percent in the
FTSE 100 index and an increase of 5.7 percent in the All Share index over the
same period, and is equivalent to 59 pence per share (prior charges deducted at
par) and 71 pence per share on a fully diluted basis. This substantially firmer
performance in the markets since the half year has been the result of growing
confidence shown by investors in the actions - or at least indications of
action - from European institutions seeking to address the problems of the
eurozone. In addition, continued levels of growth albeit at a low level are
being shown in the USA as underlined by recently higher levels of employment
generation than previously expected.
Dividend
We intend to pay an interim dividend of 2.7 pence per ordinary share on 8
November 2012 to shareholders on the register at 12 October 2012. 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.
Outlook
As I reported in April, serious and substantial structural problems beset world
financial and economic markets, particularly in the eurozone and other
developed countries. These problems are likely to overhang markets for a
considerable period of time until sustained confidence can return. As a
result, market performance and investor appetite continues to follow a pattern
of swinging between worry and relief as politicians grapple with these problems
with varying levels of perceived success. In the less than 8 months of the
current year, investor sentiment has swung three times from confidence to fear
and recently back to confidence. At times such as this, objective investment
analysis is overshadowed by the stronger forces of market sentiment driven by
political uncertainties and the value of being able to take longer term
investment decisions can be particularly appreciated.
Against this background, therefore, we intend to remain fully invested in our
long term and income generating strategies that are based primarily on equity
investment.
Anthony Townsend
30 August 2012
Managing Director's Report
Performance
The pattern of financial market performance in the first half of 2012 generally
repeated that of 2011 in movement and nature. Equity markets in the UK and USA
have made no significant progress overall since the onset of the Eurozone
sovereign debt crisis in 2010 when Greece proved unable to service its debts.
During that time, markets have vacillated precipitately between periods of fear
and relief, so called 'risk-on/risk-off' trading, as perceptions of
governments' ability and willingness to address the structural problems
besetting the global economy and particularly the eurozone varied.
As noted above, sentiment in the first half swung from optimism following
substantial liquidity measures introduced by the European Central Bank at the
end of 2011 to mounting concern in April when equity markets tumbled by 10
percent. It had become evident through significant rises in the sovereign debt
yields of even the larger Eurozone economies such as Spain and Italy that
markets believed insufficient action had been taken by institutions and
governments to solve the underlying problems of over-indebtedness and
solvency.
In June, however, markets regained their confidence again to end the period
flat following a summit of European leaders at which a more comprehensive and
credible set of proposals than expected was agreed to address the sovereign
debt crisis, including (i) direct lending to troubled banks by the European
Stability Mechanism ("ESM"), rather than through their respective countries
which was only adding to sovereign debt burdens, (ii) discontinuation of the
preferment of official debt in bailout operations, which had been squeezing out
the supply of private funds to such sovereigns and (iii) commencement of
on-market purchases of sovereign bonds by the ESM to reduce sovereign borrowing
costs.
Over the period, our portfolio decreased by 0.6 percent in line with market
movements after the payment of dividends. On a total return basis, after
adding back dividends, our portfolio outperformed by approximately 3 percent.
The performance of our largest investment, Geron Corporation, broadly followed
the trend of US market movements over the period, albeit with a certain level
of magnification, rising by approximately 30 percent in the first four months
and finishing the period up by 15 percent. Geron remains a core holding
despite the difficulties experienced with this investment over the past 18
months, as detailed in previous reports. The company is due to announce the
results of several very important clinical oncology trials over the next six to
12 months at which time it is hoped that the significant value of its
programmes will be recognised by the market after the series of recent unforced
management errors which have so devastated the company's market value.
Outlook
Since the end of the period, leading equity indices in the UK and the USA have
increased by 4 percent and 2 percent, respectively. This coincides with a
period of optimism in the long struggle towards addressing the structural
problems facing world markets. This optimism has grown out of a perception
that following a change of leadership in France and a consequent rebalancing of
the Franco/German alliance at the top of the EU together with an indication
from the recent EU leaders summit that some tentative movement from Germany on
the relaxation of its views on bailout/austerity measures might be forthcoming
that the building blocks of a solution might be falling into place.
There is no doubt, however, that over the coming months further periods of
anxiety and risk will occur and markets will remain volatile as the strains and
pains of implementing a solution to these fundamental economic imbalances are
felt. These might come to a head when the basic insolvency of Greece is
finally addressed and a decision made whether it can credibly and viably remain
within the Eurozone. The outcome of this decision and the context in which it
will be executed could very well determine the outcome for financial markets
for a considerable period of time to come.
Jonathan C Woolf
30 August 2012
CONSOLIDATED INCOME STATEMENT
Six months ended
30 June 2012
Unaudited Unaudited Audited
6 months to 30 June 6 months to 30 June Year ended 31 December 2011
2012 2011
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 2 1,062 - 1,062 1,204 - 1,204 2,934 - 2,934
income
Holding
gains/
(losses) on
investments
at fair
value
through
profit or
loss - 1,047 1,047 - (1,195) (1,195) - (7,612) (7,612)
Losses on
disposal of
investments
at fair
value
through
profit or
loss - (613) (613) - (610) (610) - (1,395) (1,395)
Expenses (183) (96) (279) (159) (93) (252) (347) (194) (541)
Profit/ 879 1,045 2,587
(loss)
before tax 338 1,217 (1,898) (853) (9,201) (6,614)
Taxation - - - - - - (4) (4)
-
Profit/
(loss) for 879 1,045 (1, 2,583
the period 338 1,217 898) (853) (9,201) (6,618)
Earnings 4
per
ordinary
share
Basic 2.81p 1.35p 4.16p 3.47p (7.59)p (4.12)p 8.93p (36.80)p (27.87)
p
Diluted 2.51p 0.97p 3.48p 2.98p (5.42)p (2.44)p 7.38p (26.29)p (18.91)
p
The group does not have any income or expense that is not included in the
profit for the period and all items derive from continuing operations.
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 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 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
2012
Unaudited
Six months ended 30 June 2012
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 35,000 (12,911) 1,341 23,430
2011
Profit for the period - 338 879 1,217
Ordinary dividend paid - - (1,175) (1,175)
Preference dividend paid - - (175) (175)
Balance at 30 June 2012 35,000 (12,573) 870 23,297
Unaudited
Six months ended 30 June 2011
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 35,000 (3,710) 908 32,198
2010
(Loss)/profit for the - (1,898) 1,045 (853)
period
Ordinary dividend paid - - (1,125) (1,125)
Preference dividend paid - (175) (175)
-
Balance at 30 June 2011 35,000 (5,608) 653 30,045
Audited
Year ended 31 December 2011
Share Capital Retained Total
capital reserve earnings
£'000 £'000 £'000 £'000
Balance at 31 December 35,000 (3,710) 908 32,198
2010
(Loss)/profit for the - (9,201) 2,583
period (6,618)
Ordinary dividend paid - - (1,800) (1,800)
Preference dividend paid - - (350) (350)
Balance at 31 December 35,000 (12,911) 1,341 23,430
2011
CONSOLIDATED BALANCE SHEET
As at 30 June 2012
Unaudited Unaudited Audited
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Non-current assets
Investments - fair value through
profit or loss (note 1) 21,604 29,535 21,618
Current assets
Receivables 202 491 81
Derivatives - fair value through 2,832 1,946 3,322
profit or loss
Cash and cash equivalents 1,286 206 122
4,320 2,643 3,525
Total assets 25,924 32,178 25,143
Current liabilities
Trade and other payables - (983)
-
Other current liabilities (1,313) (199)
(80)
Derivatives - fair value through (1,314) (951) (1,633)
profit or loss
(2,627) (2,133) (1,713)
Total assets less current 23,297 30,045 23,430
liabilities
Net assets 23,297 30,045 23,430
Equity attributable to equity
holders
Ordinary share capital 25,000 25,000 25,000
Convertible preference share capital 10,000 10,000 10,000
Capital reserve (12,573) (5,608) (12,911)
Retained revenue earnings 870 653 1,341
Total equity 23,297 30,045 23,430
Net assets per ordinary share - £0.53 £0.80 £0.54
basic
Net assets per ordinary share - £0.67 £0.86 £0.67
diluted
CONSOLIDATED CASHFLOW
STATEMENT
Six months ended 30
June 2012
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Cash flow from
operating activities
Profit/(loss) before 1,217 (853) (6,614)
tax
Adjustment for:
(Profits)/losses on (434) 1,805 9,007
investments
Scrip dividends (3) (3) (7)
Film income tax (4)
deducted at source - -
Proceeds on disposal of
investments at fair
value
through profit or loss 7,786 8,520 18,579
Purchases of
investments at fair
value
through profit or loss (5,862) (8,829) (19,756)
Operating cash flows
before movements
in working capital 2,704 640 1,205
Increase in receivables (3,118) (299) (155)
Increase in payables 2,753 656 538
Net cash from operating
activities
before income taxes 2,339 997 1,588
Net cash flows from 2,339 997 1,588
operating activities
Cash flow from
financing activities
Dividends paid on (1,175) (1,125) (1,800)
ordinary shares
Dividends paid on (175) (175)
preference shares -
Net cash used in (1,175) (1,300) (1,975)
financing activities
Net increase/(decrease)
in cash and cash (387)
equivalents 1,164 (303)
Cash and cash 122 509 509
equivalents at
beginning of period
Cash and cash 1,286 206 122
equivalents at end of
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's annual Report and Accounts at 31
December 2011.
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.
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, calculated in accordance with the above
policy. 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% (2011 - 50%) to revenue and 50% (2011 -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 ended
to 30 June to 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Income from investments 1,063 1,204 2,928
Other (loss)/income (1) - 6
1,062 1,204 2,934
3. Proposed dividends
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 June 2012 30 June 2011 31 December 2011
Interim Interim Final
Pence per £ Pence per £ Pence per £
share share share
Ordinary shares 2.7 675,000 2.7 675,000 4.7 1,175,000
Preference
shares -
1.75 175,000 1.75 175,000 1.75 175,000
fixed
850,000 850,000 1,350,000
The directors have declared an interim dividend of 2.7p (2011 - 2.7p) per
ordinary share, payable on 8 November 2012 to shareholders registered on 12
October 2012. The shares will be quoted ex-dividend on 10 October 2012.
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 Audited
6 months to 6 months to Year ended
30 June 2012 30 June 2011 31 December 2011
Pence per £ Pence per £ Pence per £
share share share
Ordinary
shares -
4.7 1,175,000 4.5 1,125,000 4.5 1,125,000
final
Ordinary
shares -
- - - - 2.7 675,000
interim
Preference
shares -
1.75 175,000 1.75 175,000 3.5 350,000
fixed
1,350,000 1,300,000 2,150,000
4. Earnings per ordinary share
Unaudited Unaudited Audited
6 months 6 months Year ended
to 30 June to 30 June 31 December
2012 2011 2011
£'000 £'000 £'000
Basic earnings per share
Calculated on the basis of:
Net revenue profit after preference 704 870 2,233
dividends
Net capital profit/(loss) 338
(1,898) (9,201)
Net total earnings after preference 1,042 (6,968)
dividends (1,028)
Ordinary shares in issue 25,000 25,000 25,000
Diluted earnings per share
Calculated on the basis of:
Net revenue profit 879 1,045 2,583
Net capital profit/(loss) 338
(1,898) (9,201)
Profit/(loss) after taxation (6,618)
1,217 (853)
Ordinary and preference shares in 35,000 35,000 35,000
issue
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
2012 2011 December
£'000 £'000 2011
£'000
Total net assets 23,297 30,045 23,430
Less convertible preference shares (10,000) (10,000) (10,000)
Net assets attributable to ordinary 13,297 20,045 13,430
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 2011 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 2012 (12,911) 1,341
Allocation of profit for the year 879
338
Ordinary and preference dividends - (1,350)
paid
At 30 June 2012 (12,573) 870
The capital reserve includes £45,000 of investment holding gains (30 June 2011
- £8,494,000,
31 December 2011 - £111,000 loss).
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
2011.
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 30 August 2012 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 reviewed the condensed set of consolidated financial statements in the
half-yearly financial report of British & American Investment Trust PLC for the
six months ended 30 June 2012 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 that have been reviewed. We have read the other information contained in
the half yearly financial report 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's members, as a body, 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'. Our review work has been undertaken so that we might state to
the company's members those matters we are required to state to them in an
independent 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 and the company's members as a body, 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 International Financial Reporting Standards 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'. 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 2012 is not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', 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
30 August 2012
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