New City High Yield Fund Ltd : Final Results
To: THOMSON REUTERS
Date: 10 October 2012
From: New City High Yield Fund Limited
Results for the year ended 30 June 2012
Net asset value total return of +2.0 per cent since 1 July 2011.
Ordinary share price total return of -1.7 per cent since 1 July 2011.
Dividend yield of 6.8 per cent, based on dividends at an annual rate of 4.01p and a share price of 58.75p at 30 June 2012.
Ordinary share price at a premium of 4.2 per cent to net asset value at 30 June 2012.
Chairman's Statement
Introduction
Your Company posted a solid performance against a most volatile investment backdrop, reversing the losses of the first six months to generate a total return of 2.0 per cent for the year. Concerns as to the strength of the US recovery, whether China would have a soft or hard landing and, above all, the existential threat to the Eurozone were ever present.
Investment and Share Price Performance
Your Company's net asset value fell by 5.0 per cent to 56.36 pence during the year ended 30 June 2012, but when this capital measure is adjusted for the payment of dividends totalling 4.01p per share in the year, the net asset value total return was 2.0 per cent.
The share price total return for the same period was rather less than this at -1.7 per cent, reflecting some moderation in the premium rating that continues to attach to the Company.
Dividends
Three interim dividends of 0.88 pence per share were paid during the year, each representing a 3.5 per cent increase on last year's corresponding dividend. The fourth interim dividend was increased by 3.7 per cent from 1.32 pence to 1.37 pence per share; this was paid after the year end on 28 August 2012. Based on an annualised rate of 4.01 pence and a share price of 63.13 pence at the time of writing, this represents a yield of 6.4 per cent.
Fund Raising
The continuing premium rating that the market attaches to the shares of your Company enabled it, for the fourth year in a row, to complete a share issue equivalent to 10 per cent of the Company's share capital in November 2011. £9.1 million was raised from new and existing shareholders. As well as a modest increase in net asset value, continuing shareholders can look to benefit from a lower total expense ratio and greater liquidity in the Company's shares.
Outlook
When I wrote to you in October 2010 I said that we awaited "the inevitable withdrawal of the colossal stimulus applied to the world's monetary system in the depths of the financial crisis". The world economy is slowing again and, rather than being withdrawn, the stimulus dosage is being increased, with an open ended QE3 programme announced in the United States, a trillion dollar RMB infrastructure programme announced in China and the deployment of the unlimited buying power of the ECB's balance sheet announced in Europe.
The turn of the year will see both the US Presidential contest concluded and the 18th National Congress of the Communist Party of China confirm a new Chinese leadership in place, holding out the possibility of serious remedial action rather than more sticking plasters.
At such a time the conservatism that has characterised the management of the Company's portfolio since its inception in 2007 reassures, holding out the prospect of dividend growth allied to a care for capital.
James G West
Chairman
Investment Manager's Review
The financial year has been totally dominated by the Eurozone crisis, the cooling Chinese economy and whether or not the US could avoid a double dip recession, all of which have a major effect on the UK economy. The net effect feels like the combination of death of a thousand cuts and Chinese water torture. We mentioned in the interim report that the slow reaction of the Eurozone governments, allied to the over-reaction of both media and markets, was a major feature of the first half; well, in the second half, despite the necessity being obvious to all but those intimately involved, neither Eurobonds with joint liability - vehemently opposed by the Germans - nor fiscal and budget union - seemingly opposed by just about everyone else - look likely to be implemented in the short-term as a panacea.
A fiscal compact was agreed in one of the many 'do or die' summits on 9 December 2011 to save the euro and the Eurozone, with only two countries refusing to sign up, the UK and the Czech Republic. The major stumbling block for the UK was the proposed EU financial transaction tax to be imposed on City of London institutions. The treaty was eventually signed by members on 2 March 2012 for implementation in January 2013, subject to ratification by individual parliaments, and managed to remove the short-term pressure for a while with the promise of European Stability Mechanism ("ESM") support for those who have ratified and legislated for the treaty by 1 March 2013. The second major 'do or die' summit (the 19th since the Eurozone crisis started) came right at the end of the Company's financial year. The outcome of it looks to be a positive, effectively putting into place altered terms and conditions of bank recapitalisation which allow the ESM to loan directly to banks rather than through governments, avoiding negative effects on government debt positions , providing that changes in regulations with the aim of a single bank regulator get through.
The effect of all this uncertainty on the high yield market in Europe was quite spectacular, with the iTraxx generic crossover index, starting at a margin of 384 bps spiralling to a high of 874 bps early October, finishing the calendar year at 754 bps, falling to 502 bps in mid-March and finishing the financial year at 661 bps.
As regards China, the 'slowdown' has hardly been a hard landing as yet; the forecast growth rate for 2012 in a June 2012 survey by Bloomberg was an average of 8.2%, which is a long way from the double digit growth of recent years. This fall has had a knock-on effect to commodity prices; a good example is Iron Ore trading at $168/tonne at the beginning of July 2011 and at $134/tonne at the end of June 2012. Against this, major commentators and market participants have been very wary about the data coming from official sources in China, pointing to the increasing visible stock piles of coal and other resources at the Chinese ports. And the knock-on effect on Dry Bulk shipping rates has been plain to see, falling by more than 29% in the year to 30 June 2012.
Regarding the portfolio, the level of unquoted securities declined further with Kalahari Minerals being converted and the resultant equity being sold at 247p, against the conversion price of 196p. Metals Ex convertible was redeemed at par, and at the end of the year there was a takeover announced for GoIndustry Dovebid where we also had an unlisted convertible bond being taken out at 130% of face value for cash. The money came in just after the end of the financial year.
In the "quoted" arena, Noreco, an issuer in which the Company had previously invested, sold its stake in the South Arne field for $200m, realising a gain of more that $50m on the sale, largely compensating for the $60m loss taken on its Siri field earlier in the year. Having sold the 12.9% 2014 NOK bonds at 105 1/2 in early April 2011, we felt that this was a good opportunity to buy these bonds back at 94. This was funded by the sale of the Morpol FRN bonds back to the company, which had outperformed in the Norwegian high yield market. Also in this space was the "Giant Oil Discovery" by STATOIL linking the Aldous and Araldenes structures and potentially doubling the size of the resource. Detnor had a 20% interest in the field and subsequently the bonds rose closer to their 106 1/2 call level, the Company taking a profit on some of its bonds at 105-105 1/2 level.
In the second half of the financial year we added further to the Noreco position. The Company also added to its holding in Ocean Rig 9 1/2 % 2016, a US dollar denounced bond on a running yield over 10%, and, purchased at issue Northland Resources 13% secured bond of 2017, an iron ore mine in northern Sweden, which, when we visited the site in early June 2012, was on time, on budget and one of the most efficient mine developments we have seen. Production is expected to commence in the fourth quarter of 2012.
In the third quarter of the financial year, the Company further lightened its already small exposure to Euro denominated bonds to under 3% of the total portfolio, reinvesting into sterling and dollar assets.
We continue to hunt for opportunities to invest in income enhancing investments whilst looking to grow the capital element.
The dividends paid out by the Company for the year rose by 3.6% to 4.01p per share up from 3.87p last year. It should also be of note that this is purely paid out of income received by the Company with no element of capital included.
Ian Francis
New City Investment Managers
Audited Income Statement
For the year ended 30 June 2012
| Year ended 30 June 2012 | ||||
| £ '000 | £'000 | £'000 | ||
| Notes | Revenue | Capital | Total | |
| Capital losses on investments | ||||
| Losses on investments | - | (7,350) | (7,350) | |
| Exchange losses | - | (21) | (21) | |
| Revenue | ||||
| Income | 11,916 | - | 11,916 | |
| 11,916 | (7,371) | 4,545 | ||
| Expenses | ||||
| Investment management fee | (776) | (259) | (1,035) | |
| Other expenses | (464) | - | (464) | |
| Total expenses | (1,240) | (259) | (1,499) | |
| Profit before finance costs and taxation | 10,676 | (7,630) | 3,046 | |
| Finance costs | ||||
| Interest payable and similar charges | (157) | (52) | (209) | |
| Profit/(loss) before taxation | 10,519 | (7,682) | 2,837 | |
| Irrecoverable withholding tax | (63) | - | (63) | |
| Profit/(loss) after taxation | 10,456 | (7,682) | 2,774 | |
| Earnings per ordinary share (pence) | 2 | 4.89p | (3.59)p | 1.30p |
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS (refer to note 1). The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement are derived from continuing operations.
No operations were acquired or discontinued in the year.
Audited Income Statement
For the year ended 30 June 2011
| Year ended 30 June 2011 | ||||
| £ '000 | £'000 | £'000 | ||
| Notes | Revenue | Capital | Total | |
| Capital gains/(losses) on investments | ||||
| Gains on investments | - | 9,612 | 9,612 | |
| Liquidation distribution | - | 259 | 259 | |
| Exchange losses | - | (303) | (303) | |
| Revenue | ||||
| Income | 10,030 | - | 10,030 | |
| 10,030 | 9,568 | 19,598 | ||
| Expenses | ||||
| Investment management fee | (702) | (234) | (936) | |
| Other expenses | (415) | - | (415) | |
| Total expenses | (1,117) | (234) | (1,351) | |
| Profit before finance costs and taxation | 8,913 | 9,334 | 18,247 | |
| Finance costs | ||||
| Interest payable and similar charges | (140) | (46) | (186) | |
| Profit before taxation | 8,773 | 9,288 | 18,061 | |
| Irrecoverable withholding tax | (69) | - | (69) | |
| Profit after taxation | 8,704 | 9,288 | 17,992 | |
| Earnings per ordinary share (pence) | 2 | 4.67p | 4.98p | 9.65p |
Audited Balance Sheet
| As at | As at | ||
| 30 June 2012 | 30 June 2011 | ||
| Notes | £'000 | £'000 | |
| Non-current assets | |||
| Investments held at fair value | 127,544 | 130,773 | |
| Current assets | |||
| Other receivables | 4,739 | 3,982 | |
| Cash and cash equivalents | 55 | 15 | |
| 4,794 | 3,997 | ||
| Total assets | 132,338 | 134,770 | |
| Current liabilities | |||
| Bank loan facility | (7,463) | (12,927) | |
| Other payables | (726) | (1,230) | |
| Total liabilities | (8,189) | (14,157) | |
| Net assets | 124,149 | 120,613 | |
| Stated capital and reserves | |||
| Stated capital account | 66,680 | 57,567 | |
| Special distributable reserve | 50,385 | 50,385 | |
| Capital reserve | (2,213) | 5,469 | |
| Revenue reserve | 9,297 | 7,192 | |
| Equity shareholders' funds | 124,149 | 120,613 | |
| Net asset value per ordinary share (pence) | 3 | 56.36p | 59.30p |
Audited Statement of Changes in Equity
For the year ended 30 June 2012
| Stated | Special | |||||
| capital | distributable | Capital | Revenue | |||
| account* | reserve+ | reserve | reserve# | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||
| At 1 July 2011 | 57,567 | 50,385 | 5,469 | 7,192 | 120,613 | |
| Total comprehensive income for the year: | ||||||
| (Loss)/Profit for the year | - | - | (7,682) | 10,456 | 2,774 | |
| Transactions with owners recognised directly in equity: | ||||||
| Dividends paid | - | - | - | (8,351) | (8,351) | |
| Issue of shares | 9,113 | - | - | - | 9,113 | |
| At 30 June 2012 | 66,680 | 50,385 | (2,213) | 9,297 | 124,149 | |
Audited Statement of Changes in Equity
For the year ended 30 June 2011
| Stated | Special | |||||
| capital | distributable | Capital | Revenue | |||
| account* | reserve+ | reserve | reserve# | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||
| At 1 July 2010 | 29,455 | 50,385 | (3,819) | 5,219 | 81,240 | |
| Total comprehensive income for the year: | ||||||
| Profit for the year | - | - | 9,288 | 8,704 | 17,992 | |
| Transactions with owners recognised directly in equity: | ||||||
| Dividends paid | - | - | - | (6,731) | (6,731) | |
| Issue of shares | 28,112 | - | - | - | 28,112 | |
| At 30 June 2011 | 57,567 | 50,385 | 5,469 | 7,192 | 120,613 | |
* Following a change in Jersey Company Law effective 27 June 2008 dividends can be paid out of any capital account of the Company subject to certain solvency restrictions. It is the Company's policy however to account for revenue items and pay dividends through a separate revenue reserve.
+ The balance on the special distributable reserve of £50,385,000 (2011: £50,385,000) is treated as distributable profits available to be used for all purposes permitted by Jersey Company Law including the buying back of shares, the payment of dividends and the payment of preliminary expenses.
# The balance on the revenue reserve of £9,297,000 (2011: £7,192,000) is available for paying dividends.
Audited Cash Flow Statement
| Year | Year | |
| Ended | Ended | |
| 30 June 2012 | 30 June 2011 | |
| £'000 | £'000 | |
| Operating activities | ||
| Profit before finance costs and taxation | 3,046 | 18,247 |
| Losses / (gains) on investments | 7,350 | (9,612) |
| Exchange losses | 21 | 303 |
| Increase in other receivables | (454) | (739) |
| Increase / (decrease) in other payables | 3 | (3) |
| Net cash inflow from operating activities before interest and taxation | 9,966 | 8,196 |
| Interest paid | (226) | (172) |
| Irrecoverable withholding tax paid | (63) | (69) |
| Net cash inflow from operating activities | 9,677 | 7,955 |
| Investing activities | ||
| Purchases of investments | (45,347) | (67,245) |
| Sales of investments | 40,433 | 35,413 |
| Net cash outflow from investing activities | (4,914) | (31,832) |
| Financing | ||
| Equity dividends paid | (8,351) | (6,731) |
| Repayment / (drawdown) of bank loan facility | (5,464) | 2,761 |
| Issue of ordinary shares | 9,113 | 28,112 |
| Net cash (outflow) / inflow from financing | (4,702) | 24,142 |
| Increase in cash and cash equivalents | 61 | 265 |
| Net debt at the start of the year | (12,912) | (10,113) |
| Repayment / (drawdown) of bank loan facility | 5,464 | (2,761) |
| Exchange (losses | (21) | (303) |
| Net debt at the end of the year+ | (7,408) | (12,912) |
| Dividend income received | 1,060 | 992 |
| Interest on fixed interest securities received | 10,406 | 8,392 |
+ Net debt includes cash held at bank and bank loan facility.
Principal Risks and Uncertainties
The principal risks faced by the Company are: investment and strategy risk; market risk; financial risk; earnings and dividend risk; operational risk and regulatory risk. These risks, which have not changed materially since the annual report for the year ended 30 June 2011, and the way in which they are managed, are described in more detail in the annual report for the year ended 30 June 2012. The report will be made available on the manager's website www.ncim.co.uk during October 2012.
Statement of Directors' Responsibilities in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Jersey law and International Financial Reporting Standards ("IFRS") as adopted by the International Accounting Standards Board ("IASB").
Jersey law requires the Directors to prepare in accordance with generally accepted accounting principles, financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit and loss of the Company for that year. Under Jersey law they have elected to prepare the financial statements in accordance with IFRS as adopted by the IASB.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and estimates that are reasonable and prudent;
· state whether applicable International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. The financial statements are published on the www.ncim.co.uk website, which is a website maintained by the Company's Investment Manager. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors confirm that to the best of their knowledge:
· the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
· the Report of the Directors includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
JG West
Chairman
9 October 2012
Notes (audited)
The annual results which cover the year to 30 June 2012 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the International Accounting Standards Board ("IASB") and in accordance with the guidance set out in the Statement of Recommended Practice ("SORP") for investment trust companies and venture capital trusts issued by the Association of Investment Companies ('AIC') in January 2009.
Standards and amendments not yet effective
The following standards have been issued but are not effective for this accounting period and have not been adopted early:
IFRS 9 - Financial Instruments - effective 01/01/13
IFRS 9 represents the first of a three part project to replace IAS 39 "Financial Instruments Recognition and Measurement". The objective of the standard is to enhance the ability of investors and other users of financial information to understand the accounting of financial assets and to reduce complexity.
IFRS 13 - Fair Value Measurement - effective 01/01/13
IFRS 13 defines fair value and sets out in a single IFRS, a framework for measuring fair value and requires disclosures about fair value measurement. The objective of the standard is to provide clear and consistent guidance for the measuring of fair value and addressing valuation uncertainty in markets that are no longer active and also providing improved transparency of fair value measurements by requiring detailed disclosures about fair values derived using models.
The Company does not consider that the future adoption of any new standards, in the form currently available, will have any material impact on the financial statements as presented.
Earnings per ordinary share
The revenue earnings per ordinary share is based on the net profit after taxation of £10,456,000 (2011: £8,704,000) and on 213,909,275 (2011: 186,387,820) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
The capital earnings per ordinary share is based on a net capital loss of £7,682,000 (2011: net capital profit of £9,288,000) and on 213,909,275 (2011: 186,387,820) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
Net asset value per ordinary share
The net asset value per ordinary share is based on net assets of £124,149,000 (2011: £120,613,000) and on 220,267,581 (2011: 203,404,249) ordinary shares, being the number of ordinary shares in issue at the year end.
4. Dividends
A fourth interim dividend in respect of the year ended 30 June 2012 of 1.37p per ordinary share was paid on 28 August 2012 to shareholders on the register on 27 July 2012. In accordance with IFRS this dividend has not been included as a liability in these accounts and will be recognised in the period in which it is paid.
5. Financial Instruments
The Company's financial instruments comprise its investment portfolio, cash balances, bank loan and debtors and creditors that arise directly from its operations. As an investment company, the Company holds a portfolio of financial assets in pursuit of its investment objective. The Company uses flexible borrowings for short term purposes, and to seek to enhance the returns to shareholders, when considered appropriate by the Investment Manager.
Investments held are valued at fair value. For listed securities this is either bid price or the last traded price depending on the convention of the exchange on which the investment is listed. Unlisted investments are valued by the Directors on the basis of all the information available to them at the time of valuation. The fair value of all other financial assets and liabilities is represented by their carrying value in the Balance Sheet. The fair value of the loan is not materially different from the carrying value in the Balance Sheet.
The main risks that the Company faces arising from its financial instruments are:
(i) market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency rate movements;
(ii) interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates;
(iii) foreign currency risk, being the risk that the value of investment holdings, investment purchases, investment sales and income will fluctuate because of movements in currency exchange rates;
(iv) credit risk, being the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company; and
(v) liquidity risk, being the risk that the bank may demand repayment of the loan and or that the Company may not be able to liquidate quickly its investments.
Market price risk
Market price risk arises mainly from uncertainty about future prices of financial instruments held.
It represents the potential loss the Company might suffer through holding market positions in the face of price movements. To mitigate the risk the Board's investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined accounting, market and sector analysis, with the emphasis on long term investments. An appropriate spread of investments is held in the portfolio in order to reduce both the statistical risk and the risk arising from factors specific to a country or sector. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy.
Interest rate risk
Financial assets
Bond and preference share yields, and their prices, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company. Returns from bonds and preference shares are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. Consequentially, if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.
Interest rate risk on fixed interest instruments is considered to be part of market price risk as disclosed above.
Floating rate
When the Company retains cash balances they are held in floating rate deposit accounts. The benchmark rate which determines the interest payments received on interest bearing cash balances is the UK bank base rate, which was 0.5 per cent at 30 June 2012.
Financial liabilities
The Company may utilise the bank loan facility to meet any liabilities due. The Company has borrowed in sterling at a variable rate of interest based on the UK bank base rate. The Board sets borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis.
At the year end, the Company had borrowings of £7,463,000 from HSBC Bank plc.
Fixed rate
The Company holds fixed interest investments.
Foreign currency risk
The Company invests in overseas securities and may hold foreign currency cash balances which give rise to currency risks. It is not the Company's policy to hedge this risk on a continuing basis but it may do so from time to time.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets best represents the maximum risk exposure at the balance sheet date. Credit risk on fixed interest instruments is considered to be part of market price risk.
Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the acceptable credit quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk.
The cash held by the Company and all the assets of the Company which are traded on a recognised exchange are held by HSBC Bank plc ('HSBC'), the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to the cash and securities held by the custodian to be delayed or limited. The Board monitors the Company's risk by reviewing the custodian's internal control reports.
Should the credit quality or the financial position of HSBC deteriorate significantly the Investment Manager will move the cash holdings to another bank.
The Company did not have any exposure to any financial assets which were past due or impaired at the year end.
There were no significant concentrations of credit risk to counterparties at 30 June 2012. No individual investment exceeded 4.0 per cent of the net assets attributable to the Company's shareholders at 30 June 2012.
Liquidity risk
The Company's financial instruments include investments in unlisted investments which are not traded in an organised public market and which generally may be illiquid. As a result, the Company may not be able to liquidate these investments at an amount close to their fair value.
The Company's listed securities are considered to be readily realisable.
The Company's liquidity risk is managed on an ongoing basis by the Investment Manager in accordance with policies and procedures in place as described in the Directors' Report. The Company's overall liquidity risks are monitored on a quarterly basis by the Board.
The Company maintains sufficient cash, has a short term bank loan facility and readily realisable securities to pay accounts payable and accrued expenses. The Company also maintains sufficient cash and readily realisable securities to meet any demand repayment on its overdraft facility.
6. Related parties
The following are considered related parties: the Board of Directors ("the Board") and CQS/New City Investment Managers ("the Investment Manager")
Mr G Ross is a director of the Company Secretary and Administrators, R&H Fund Services (Jersey) Limited and R&H Fund Services Limited, which receive fees from the Company.
Canaccord Genuity Limited provides advisory and brokerage services to the Company. Mr J. West, a Director, is deputy chairman of Canaccord Genuity Limited.
All transactions with related parties are carried out at an arms length basis.
There are no other transactions with the Board other than aggregated remuneration for services as Directors and there are no outstanding balances to the Board at the year end.
7. Bank loan facility
The Company has a short term loan facility with HSBC Bank Plc. This facility allows up to 20 per cent of the value of shareholders' funds to be borrowed with the drawn down amount repayable on demand. As at the year end the unsecured loan facility had a limit of £20.0 million of which £7.5 million was drawn down at the year end.
8. Financial information
These are not full statutory accounts for the year ended 30 June 2012. The full audited annual report and accounts for the year ended 30 June 2012 will be sent to shareholders in October 2012 and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The full audited accounts for the period ended 30 June 2011, which were unqualified, have been lodged with the Registrar of Companies.
9. The report and accounts for the year ended 30 June 2012 will be made available on the website www.ncim.co.uk. Copies may also be obtained from the Company's registered office, Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW, Channel Islands
Enquiries:
Ian Francis, New City Investment Managers: 020 7201 5366
Martin Cassels, UK Adminstrator 0131 625 2951
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: New City High Yield Fund Ltd via Thomson Reuters ONE
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