Annual Financial Report

RNS Number : 8955K

Mid Wynd Inter Inv Trust PLC

28 August 2012

 



MID WYND INTERNATIONAL INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT

Copies of the Annual Report and Financial Statements for the year ended 30 June 2012 have been submitted electronically to the National Storage Mechanism and will shortly be available for inspection at http://www.hemscott.com/nsm.do

The Annual Report and Financial Statements for the year ended 30 June 2012 including the Notice of Annual General Meeting is also available on Mid Wynd's page of the Baillie Gifford website at:

www.midwynd.co.uk

The unedited full text of those parts of the Annual Report and Financial Statements for the year ended 30 June 2012 which require to be published by DTR 4.1 is set out on the following pages.

Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

Baillie Gifford & Co

Company Secretaries

28 August 2012

CHAIRMAN'S STATEMENT

I am pleased to write to you for the first time as your Company's Chairman, a role I took over at the Company's financial year end.

In the year to 30 June 2012, net asset value declined by 8.6% to 229.8p per share. The share price fell by 9.2% to 230.75p per share. The FTSE World index dropped by 6.2% in sterling terms. This has been a challenging year for markets, reflecting the structural challenges faced by economies which companies cannot permanently insulate themselves against, and the Company's underperformance has been disappointing. Repeated central bank stimuli have managed to contain, for now, what would otherwise have been a combination of Western debt deflation and deep recession. These interventions buy time, but not an indefinite amount. Policy making in the afflicted parts of the Western world appears to be running up against the laws of diminishing returns. Underlying sovereign balance sheets are deteriorating further meantime. What has happened is akin to stripping insulation from the bare economic wire - governments and Central Banks are that insulation. As time goes on, and in the absence of a more potent recovery, the risk of short-circuit increases. Following a partial, tactical withdrawal from our sale of index futures following the European Central Bank intervention in the early part of this calendar year, we have reverted to the strategic position of having significant portfolio insurance. Should markets turn south unexpectedly, we would hope to find ourselves with cash flow from margin payments and to be in a position to exploit any major weakness in asset prices. This remains an unusual situation for the Company but one we believe remains merited by the circumstances.

Earnings and dividend

The revenue return for the year of 2.93p per share represents a 14.6% fall in earnings compared to the previous year. The surprising strength of portfolio dividends enjoyed last year has not been maintained, owing in part to the non-payment of a dividend by Marine Harvest in the current year, historically a generous contributor to our income stream.

The Company can draw upon accumulated revenue reserves to address such an earnings shortfall in order to maintain its dividend and, accordingly, a final dividend of 2.0p will be recommended, taking the full year total to 3.3p, equivalent to the 16.5p paid last year.

Discount and share buybacks/ issuance

The 1.0% premium at which the Company's shares were trading at the previous year end had fallen to 0.4% by 30 June 2012. During the year it rose to over 7%, however, and the Company was able to issue 500,000 new shares, raising £1.19m, to satisfy shareholder demand. To reiterate the intention expressed in the Half-Yearly Management Report, it is hoped that liquidity will be improved by the creation of a band within which issuance and buybacks take place as a matter of routine.

Board

At last year's Annual General Meeting ('AGM') I thanked Pat Barron for his years of service on this Company's Board, and I should like to do so again, following his retirement from the Board on 30 June 2012. After almost ten years as a Director, Pat took over as Chairman in 1989 after the sudden and untimely death of George Scott, and led the Company with calm and good humour through the long boom of the 1990s and the very difficult period since the spring of 2001. I also welcome two new Directors: Harry Morgan and Alan Scott, both appointed with effect from 21 May 2012, who therefore fall to be elected by shareholders at the AGM to be held on 8 October 2012. As can be seen from his description on page 5 of the Annual Report, Harry has wide and lengthy investment experience, particularly with private clients, while Alan, son of the late George, not only represents the next generation of the Scott family, but also has broad financial experience in banking and wealth management. Their experience will be of great value to the Board and I commend their election to you.

Outlook

Most of last year's outlook statement still applies. As is exhaustively rehearsed in the media, the Eurozone political and financial drama appears to be nearing a denouement. Periodic flurries of politicking demonstrate strong intent but also rising north/south strains and questionable effectiveness. There do not appear to be any clear winners in this game in either the short or even perhaps the medium term. Recovering from the prolonged overindulgence of the past, in the case of Europe, which for this purpose includes the UK, is likely to take a long period of adjustment (perhaps alongside fiscal, political and banking integrations). The alternative is a short, sharp shock - some manner of Eurozone break-up and a complex web of accompanying unintended and mostly undesirable consequences. Long term causes for optimism, however, are significant. They fall mainly into two categories - commercial innovation and renovation on the one hand, and a multi-decade long expansion of consumption across large swathes of the world's population on the other. Most of Asia, for instance, continues to grow at a worthwhile pace and has high savings ratios to back up higher spending. It would not be immune in the short term from some dislocation in Western economies, but seems well placed over the next ten or twenty years. This would appear to be a more significant development than the moderate but fragile recovery in the US economy that has preoccupied markets over the past year.

The pace of global growth has mostly been slowing markedly of late. Rising commodity prices, a feature of last year's report, have been reversing in the last few months, as has headline inflation. Industrial production indices and surveys have been slipping back into low growth or even flat to down territory. Inventory levels have not yet fallen, however, indicating a marked weakness in final demand and more weak output to come.

Overall, this is a subdued backdrop for equity investors despite or perhaps because of the recent success of companies and their profits. Outwith equities, where valuations seem from a long term perspective somewhere between moderately attractive to rather expensive, there appear to be few clear attractive asset classes. Some such, in the form of catastrophe bonds, litigation finance and assorted other forms of mispriced equity-like risk, are important and uncorrelated, if modest, elements of Mid Wynd's portfolio. Volatility in asset prices deriving from high profile events may continue to throw up investment opportunities of a short term nature. Taking advantage of such a situation will require tenacity, fortitude and intelligence in equal measure.

Richard RJ Burns

16 August 2012

MANAGERS' PORTFOLIO REVIEW

The portfolio

Five of last year's top ten holdings remain top ten holdings this year. All continue to feature in the portfolio but some (Dragon Oil, Seadrill, Yoox, Athena Debt Opportunities Fund and ASOS) were reduced in scale. Modest changes have occurred in the size and composition of non equity holdings over the year. The real yield on Brazilian index-linked bonds fell and they were replaced by Venezuelan dollar bonds yielding above 12%. New holdings have been taken in Everglades Re, a Florida related catastrophe bond, and in Reynolds Group, the unlisted but indebted owner of the global number two company in aseptic packaging after Tetrapak. This is an industry we admire, but to which we would otherwise have no access. Bonds accounted for 5% of the portfolio as at year end compared to 6% in June 2011.

Ten largest holdings

IP Group

IP Group is a UK listed company with unique access to participate in the intellectual property output of many of the UK's best universities. From a wide base of small commercialisations, a small number of enterprises have risen to comprise the bulk of the value in the group. Already one of our largest holdings last year, news on many of its portfolio companies has been encouraging. Nowhere was this more evident than at Oxford Nanopore, an unlisted company in which IP Group has a substantial stake, which has announced what may be ground-breaking new technology in the field of DNA sequencing and small molecule analysis. We added to the IP Group position over the course of the year. The primary impetus, however, to the expanding size of our holding has been a share price rising to reflect improving underlying prospects. The shares have the potential to deliver further strong results over coming years.

Level E Maya

This is an investment in two parts. First, the Maya fund itself, and second, an option to invest in the unlisted asset management and intellectual property companies (Level E) that lie behind the fund. The Maya fund has produced rather disappointing overall returns to date, even if volatility has been as low as intended. The overall fund mix has been altered to increase further the sub-segment that is most likely to deliver attractive returns that are also uncorrelated to equity markets. As regards the option component, we have nearly 3 years remaining on the option held by the Company to participate directly in the equity of the management companies at Level E. Some third party inflows into these funds have started to take place and should prove helpful to the economics of the respective management companies. The bulk of potential upside for Mid Wynd shareholders lies in the possibility of meaningful ownership in a growing new asset management business. The option that confers this possibility is held at its book cost of zero. Should it be exercised, it would be in the context of improving economics for the management group.

MANAGERS' PORTFOLIO REVIEW (Ctd)

Odontoprev

This is Brazil's leading dental plan company. We have seen the company deliver anticipated margin improvements following the important acquisition of Bradesco Dental. Scale and efficiency opportunities deriving from this are clearly paying off. As a strong market leader with economies of scale, its costs are rising more slowly than prices. Prices should have scope to continue to increase from fairly low levels. The determinant of future revenue trends may well be the group's ability to sell dental plans directly to Brazil's burgeoning middle classes, rather than simply supplying dental care as an adjunct to other employment benefits.

Kone

The lift business, and this applies almost as much to our other lift holding, Schindler, has continued to produce gratifying results. In particular for Kone, new orders, primarily from Asia, hold out the promise of continued expansion in the maintenance portfolio. Several small acquisitions of maintenance businesses have occurred over the course of the year as is the historical norm. Cash generation has been impressive and Kone has once again paid a special dividend to all shareholders in addition to its healthy and rising traditional dividend stream.

Ocean Wilsons

Wilson Sons, the main Brazilian operating company underlying this London listed holding company, is in the midst of an exciting expansion of its activities. The recent combination of the tug business with that of UltraTug has led to a very powerful offering up and down the Brazilian coastline. Cheap financing has been obtained to allow the expansion of the platform supply vessel production business. This is at a time when offshore activity is growing rapidly as the multi-decade project to exploit the Brazilian pre-salt oil resource gains momentum. Last, but not least, container port volumes have held up at high levels, and agricultural related exports continue to benefit from high prices. The remainder of Ocean Wilson's NAV lies in an investment portfolio, the results of which have been lacklustre over the past year or so. However, the discount at which the shares stand to the underlying combined net asset value has rarely been higher, and Mid Wynd continues periodically to add to its position here.

Marine Harvest

This is the world's leading salmon farming business. As Chilean supply continues to come back onstream following that country's uncontrolled over-expansion some years ago, salmon prices have remained rather weak over the course of the year. Marine Harvest, however, has managed to expand its own supply and constrain its cost base far better than in past cycles. The influence of the Fredriksen group ownership here, as in Seadrill, may be seen in the combination of persistent striving for operational excellence along with sensible capital allocation (and high levels of dividend payout) through the cycle. There is little argument that this is likely to remain a brutally cyclical industry even if ownership is now consolidated among fewer hands than in the past. We added to our holdings as new supply came on, and have lately enjoyed a boost in the share price as the market perhaps begins to anticipate the point at which demand again absorbs supply and salmon prices can begin to recover.

MANAGERS' PORTFOLIO REVIEW (Ctd)

BIM

BIM is a Turkish hard discount food retail format with similarities to that of Aldi. Both the business and the local economy have thrived over most of the period of our ownership, now more than three years. This year has been no exception and the shares, to which we added, have started to feature among our larger holdings.

Better Capital

The clearest opportunities to make money domestically in the UK are likely to stem from company failures of the past several years. This specialist fund aims to buy bankrupt or distressed businesses and reinvigorate them. It is sadly the case that many firms were run in good times by management that has proved inadequate in the downturn. It is equally undeniable that many such assets are now in the hands of bankers who lent too much money to uncertain propositions in a period of boom. In many such instances, simple changes, in the form of investment or cost cutting, can produce a very material improvement in trading.

Biotech Growth Trust

After a long period of research and development, many biotech firms are finally demonstrating strong results. Often assisted by technological advances, these firms are developing innovations that can transform healthcare in a way that mass marketed blockbuster drugs have largely failed to do. Valuations had fallen to low levels as markets lost patience. We chose to invest in this area via a fund as well as by directly capitalising on the analytical output of our own resources. NAV progression at BGT has taken it up the scale rankings of the Company's largest holdings.

MMXM11 Mineracao

This is a new holding for Mid Wynd, spun out from an old holding and added to in the autumn of 2011. It came about from the sale of the Sudeste port in Brazil to a mining company, MMX. MMXM11 is a bond-like structure that has rights to the payment from the new owner of the port. Holders of this security receive, in effect, U$5 per tonne of iron ore shipped through Sudeste with an inflation adjustment for US producer price indices. The related hinterland of mining undertakings and railroads is owned and run by a variety of companies, including MMX itself. Connection to Sudeste is made via transport systems that give the port a particularly favourable position. Port capacity stands at 50m tonnes but permission to double this is being actively sought. MMXM11 stands to benefit from any port and tonnage expansion but does not incur any of the related costs.

Transactions

Portfolio turnover was lower this year than last. It comprised the usual mixture of cutting back some successful holdings where a proportion of the upside opportunity had been captured, culling things that hadn't worked out and finding new ideas that appear to offer asymmetrically attractive potential returns.

MANAGERS' PORTFOLIO REVIEW (Ctd)

Sales

We cut back in telecoms and within the energy and resources sectors, these being areas where the Company had enjoyed some success. Telstra, Chunghwa and Verizon had suffered, when we bought these holdings, from a perception of shrinking top lines, whereas we believed that mobile data finally offered them some leeway to combat that. The sector performed well as views shifted towards ours and we sold the shares. In oil, the quality of DNO's reserves had gone a long way to move the share price despite ongoing challenges of exporting oil from Kurdistan. EOG enjoyed a run up on the back of hopes for shale gas and shale oil. We share a belief in the latter but are somewhat sceptical about the former. Kenmare Resources had finally brought its Mozambican mineral sands project to full scale production and was increasingly perceived and valued as a takeover target.

Inevitably, we had our share of mistakes too. MIPS (in semi-conductor design), ITT Education (a tertiary education provider) and Aixtron (a maker of machines to produce light emitting diodes), all failed to live up to expectations and involved bad timing on our part. The purchase and subsequent retreat from both RIM (maker of Blackberry phones) and Peugeot (autos) proved the old adage about catching a falling knife, in both cases to our material disadvantage. We suffered from out and out fraud at Sino Forest (Chinese timber producer) and within the Vision Opportunities China fund (an investor in Chinese unquoted mid cap growth enterprises). Every year experience increases our awareness of the worth of studying management and their incentives when analysing investments. The driving forces behind owners and managers vary materially as do business cultures across the globe. OGX proved the point about being better to travel than to arrive as capex budgets raced upwards and oil flow rate projections moved in the opposite direction.

New purchases

Tripadvisor, Priceline.com, Facebook, Retroscreen Virology (IPO'd out of IP Group), Westport Innovations and Marketaxess are all companies that, in very different contexts, are in the process of creating entirely new markets for themselves. The trend, noted last year, of increasing exposure to technological innovation and internet related businesses, continues.

Such propositions can involve a wide range of possible outcomes and pose quite a challenge to traditional valuation methods. Historically, observers and analysts tend to be over-confident about their predictive powers. But in this area it is hard to be over-confident. Even the revenue line in such businesses is open to many different and equally valid prognoses. In principle, we view this as a prospective area, as uncertainty is generally off-putting for many investors, and in practice we are living in an era that is producing increasing numbers of such opportunities. Those of us who see what economists would call 'creative destruction' at work today need to be mindful to exploit as many opportunities to turn creativity into cash flow as we can find, at reasonable prices. The reward of a single large success here can outweigh the pain of several failures.

Unloved or hidden growth stocks is another area of investment interest and engagement. Harley Davidson (motorbikes) has gone through hard times, appeared to be rated by the market as damaged goods, but is starting to capture new kinds of customers and is expanding internationally from a modest start. Bang & Olufsen (sound systems) is finding new ways of using its audio expertise to enhance the enjoyment of luxury car owners. Teradyne is a semiconductor testing company potentially emerging from a multi-year bout of brutal industry-wide competition. Many peers have gone out of business. A positive outcome here would see the company with oligopolistic pricing power in a rapidly expanding market in years to come. Ultra Petroleum (a gas producer) has suffered materially as the spot price of US domestic natural gas has collapsed. However, at the present very low prices, all capital expenditure on shale gas has been suspended. It seems reasonable to expect some retracement of recent falls in spot prices and much improved profits for Ultra.

Other new buys, such as IHS (where our thesis sees enhanced monetisation over time of powerful industry databases), or First Republic Bank, which is about wealth management opportunities within the shell of what looks like and is priced like a regular bank, are more recognisable long term, cash generative businesses. The upside may be less spectacular and tends to rely on good old-fashioned persistent hard work and management execution, but the odds of achieving that upside are often appealing.

Summary

This has been a frustrating year both relatively and absolutely: US market returns were markedly superior whereas European and developing markets fell short. It is of some consolation that stock selection boosted returns, as shown on page 10 of the Annual Report - we are essentially stock pickers whose geographic ambitions are limited to investing in a diverse range of companies and maintaining a long range perspective.

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

THIRTY LARGEST HOLDINGS at 30 June 2012
Name	Region		Business		2012			2011
					Value £'000	% of total assets		Value £'000
IP Group		United Kingdom		Commercialisation of intellectual property	3,791	5.7	1,254
Level E Maya Fund		United Kingdom		Artificial intelligence based algorithmic trading	2,129	3.2	2,454
Odontoprev		Emerging Markets		Dental health services - Brazil	2,127	3.2	2,286
Reinet Investments SCA		Continental Europe		Investment holding company	1,929	2.9	993
Kone		Continental Europe		Elevators	1,680	2.5	1,704
Ocean Wilsons		United Kingdom		Tugboats, platform supply vessels and container    handling - Brazil	1,344	2.0	1,755
Marine Harvest		Continental Europe		Salmon farming	1,300	1.9	359
BIM Birlesik Magazalar		Emerging Markets		Discount food stores - Turkey	1,193	1.8	588
Better Capital		United Kingdom		Fund investing in distressed businesses	1,114	1.7	885
The Biotech Growth Trust		United Kingdom		Biotechnology investment trust	1,064	1.6	723
MMS Mineracao e Metalicos		Emerging Markets		Port - royalties based on iron ore shipments	1,037	1.6	601
Fuchs Petrolub		Continental Europe		Specialty lubricant manufacturer	1,030	1.5	405
Schindler		Continental Europe		Elevators	999	1.5	1,061
Santos Brasil Participacoes		Emerging Markets		Container handling and logistics services - Brazil	921	1.4	1,064
Reynolds Group 9.5% 2017		Fixed Interest		Food and beverage packaging and storage    company bond	903	1.4	-
TJX Companies		North America		Discount clothing and homeware stores	854	1.3	510
Naspers		Emerging Markets		Media company - South Africa and China	846	1.3	875
Yoox.com		Continental Europe		Online fashion retailer	823	1.2	1,399
Chariot Oil & Gas		Emerging Markets		Oil and gas exploration and production -    Namibia	799	1.2	512
Doric Nimrod Air Two		United Kingdom		Fund to acquire, lease and sell A380 aircraft	792	1.2	-
ASOS.com		United Kingdom		Online fashion retailer	761	1.1	1,710
IG Group		United Kingdom		Spread betting	758	1.1	690
Athena Debt Opportunities    Fund		Fixed Interest		Distressed debt fund	746	1.1	1,622
Curis		North America		Biopharmaceutical drug development	737	1.1	477
Dragon Oil		Emerging Markets		Oil and gas exploration and production -    Turkmenistan	729	1.1	1,126
TOTVS		Emerging Markets		Application software for Latin American markets	719	1.1	481
Doric Nimrod Air One		United Kingdom		Fund to acquire, lease and sell A380 aircraft	716	1.1	637
Novozymes		Continental Europe		Enzyme producer	715	1.1	878
Seattle Genetics		North America		Biopharmaceuticals	712	1.1	467
CATco Reinsurance    Opportunities Fund		United Kingdom		Catastrophe reinsurance fund	701	1.1	685
					33,969	51.1	28,201

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

 

DISTRIBUTION OF ASSETS

			30 June 2012 %		30 June 2011 %
Equities:	United Kingdom		28.6		24.3
	Continental Europe		19.0		20.3
	North America		20.6		14.6
	Asia Pacific including Japan		5.5		7.8
	Emerging Markets		18.9		25.0
Total Equities			92.6		92.0
Fixed interest			5.0		6.0
Net liquid assets			2.4		2.0
Total assets (before deduction of bank loans)			100.0		100.0

RELATED PARTY TRANSACTIONS

The Directors' fees for the year are detailed in the Directors' Remuneration Report. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006. Baillie Gifford & Co are employed by the Company as Managers and Secretaries under a management agreement which is terminable on not less than one year's notice, or on shorter notice in certain circumstances. The fee in respect of each quarter is 0.125% of the net assets of the Company attributable to its shareholders on the last day of that quarter. The management fee is levied on all assets, including holdings in collective investment schemes (OEICs) managed by Baillie Gifford & Co, however, the OEICs' share classes held by the Company do not incur management fees.  The details of the management fee are as follows:

	2011 £'000		2011 £'000
Investment management fee	302		318
	302		318

PRINCIPAL RISKS AND UNCERTAINTIES

As an Investment Trust, the Company invests in equities and makes other investments so as to achieve its investment objective of achieving capital and income growth by investing on a worldwide basis. In pursuing its investment objective, the Company is exposed to various types of risk that are associated with the financial instruments and markets in which it invests.

These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent loss of capital rather than to minimise the short term volatility.

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

The Company may enter into derivatives transactions as explained in the Investment Policy on page 19 of the Annual Report. In the period under review the Company purchased equity index options and sold equity index futures. Details of derivative financial instruments open at the balance sheet date are shown below.

The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period.

Market Risk

The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. The Board of Directors reviews and agrees policies for managing these risks and the Company's Investment Managers both assess the exposure to market risk when making individual investment decisions and monitor the overall level of market risk across the investment portfolio on an ongoing basis.

(i) Currency Risk

Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items.

The Investment Managers monitor the Company's exposure to foreign currencies and report to the Board on a regular basis. The Investment Managers assess the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the company is quoted.

Foreign currency borrowings can limit the Company's exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments.

Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below. The exposure of the Company's OEIC investment managed by Baillie Gifford & Co has been included in the analysis at 30 June 2011 as sterling, being its currency of quotation. The main changes to net currency exposure during the year are as follows: exposure to the Euro decreased, reflecting the larger Euro loan; exposure to the Japanese yen increased following the expiry of the Japanese yen loan; exposure to the Brazilian real decreased through the sale of the Brazilian bond. Explanations of the changes in asset allocation can be found in the Chairman's Statement and Managers' Portfolio Review.

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

At 30 June 2012	Investments £'000		Cash and deposits £'000		Bank loans £'000		Other debtors and creditors* £'000		Net exposure £'000
US dollar	15,730		1,401		-		246		17,377
Euro	8,185		(107)		(2,247)		172		5,823
Norwegian krone	1,841		-		-		-		1,841
Swiss franc	1,671		-		-		-		1,671
Japanese yen	2,973		-		-		11		2,984
Brazilian real	5,487		-		-		-		5,487
Hong Kong dollar	1,057		-		-		15		1,072
South African rand	1,754		-		-		-		1,754
Other overseas currencies	5,866		-		-		-		5,866
Total exposure to currency risk	44,564		1,294		(2,247)		444		43,875
Sterling	20,603		(55)		(2,500)		(87)		17,961
	65,167		1,239		(4,927)		357		61,836

*          Includes net non-monetary assets of £9,000.

At 30 June 2011	Investments £'000		Cash and deposits £'000		Bank loans £'000		Other debtors and creditors* £'000		Net exposure £'000
US dollar	13,591		(19)		-		(15)		13,557
Euro	8,588		(27)		(1,192)		25		7,394
Norwegian krone	2,185		-		-		-		2,185
Swiss franc	2,527		346		-		-		2,873
Japanese yen	3,894		-		(2,314)		6		1,586
Brazilian real	7,159		1,008		-		14		8,181
Hong Kong dollar	2,426		-		-		-		2,426
South African rand	1,293		-		-		-		1,293
Other overseas currencies	7,374		-		-		79		7,453
Total exposure to currency risk	49,037		1,308		(3,506)		109		46,948
Sterling	21,323		51		(2,000)		(33)		19,341
	70,360		1,359		(5,506)		76		66,289

* Includes net non-monetary assets of £11,000.

Currency Risk Sensitivity

At 30 June 2012, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The analysis is performed on the same basis for 2011.

	2012 £'000		2011 £'000
US dollar	869		678
Euro	291		370
Norwegian krone	92		109
Swiss franc	84		144
Japanese yen	149		79
Brazilian real	274		409
Hong Kong dollar	54		121
South African rand	88		65
Other overseas currencies	293		372
	2,194		2,347

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

(ii) Interest Rate Risk

Interest rate movements may affect directly:

• the fair value of the investments in fixed interest rate securities;

• the level of income receivable on cash deposits;

• the fair value of the Company's fixed-rate borrowings; and

• the interest payable on any variable rate borrowings which the Company may take out.

Interest rate movements may also impact upon the market value of the Company's investments outwith fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements. The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments. The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board. Movements in interest rates, to the extent that they affect the market value of the Company's fixed rate borrowings, may also affect the amount by which the Company's share price is at a discount or a premium to the net asset value.

The interest rate risk profile of the Company's financial assets and liabilities at 30 June is shown below.

Financial assets	2012			2011
	Fair value £'000	Weighted average interest rate	Weighted average period until maturity	Fair value £'000	Weighted average interest rate	Weighted average period until maturity
Fixed rate:
US dollar bonds*	1,067	4.9%	8 years	180	4.3%	2 years
Euro bonds	986	9.1%	5 years	23	5.0%	4 years
Floating rate:
UK bonds (interest rate linked to LIBOR)	-	-	-	678	2.0%	1 year
US dollar bonds (interest rate linked to reinsurance rate)	684	13.6%	4 years	-	-	-
Euro bonds (interest rate linked to Euro LIBOR)	287	8.7%	3 years	278	9.5%	4 years
Brazilian bond (interest rate linked to Brazilian CPI)	-	-	-	939	12.1%	34 years
Fixed interest collective investment schemes:
CQS Rig Finance Fund	-	-	-	441	-	n/a
Athena Debt Opportunities Fund	746	2.5%	25 years	1,622	0.6%	26 years
K1 Life Settlements 0%	215	-	n/a	201	-	n/a

*Includes convertible treated as equity

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

The cash deposits generally comprise call deposits or short term money market deposits with original maturities of less than three months, which are repayable on demand. The benchmark rate which determines the interest payments received on cash balances is the bank base rate.

Financial Liabilities

The interest rate risk profile of the Company's bank loans and the maturity profile of the undiscounted future cash flows in respect of the Company's contractual financial liabilities at 30 June are shown below.

Interest Rate Risk Profile	2012 £'000	2011 £'000
Fixed rate - Yen denominated	-	2,314
Fixed rate - Euro denominated (2011 - floating rate)	2,427	1,192
Fixed rate - Sterling denominated (2011 - floating rate)	2,500	2,000
	4,927	5,506

Maturity Profile	2012 Within 1 year £'000	2012 Between 1 and 5 years £'000	2012 More than 5 years £'000	2011 Within 1 year £'000	2011 Between 1 and 5 years £'000	2011 More than 5 years £'000
Repayment of loans	-	4,927	-	5,506	-	-
Interest on loans	126	338	-	57	-	-
	126	5,265	-	5,563	-	-

Interest Rate Risk Sensitivity

An increase of 100 basis points in bond yields as at 30 June 2012 would have decreased total net assets and total return on ordinary activities by £83,000 (2011 - £145,000). A decrease of 100 basis points would have had an equal but opposite effect.

An increase of 100 basis points in bond yields as at 30 June 2012 would have decreased the net asset value per share (with borrowings at fair value) by 0.31p (2011 - 0.55p). A decrease of 100 basis points would have had an equal but opposite effect.

(iii) Other Price Risk

Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Managers. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objectives and investment policies. The portfolio does not seek to reproduce the index. Investments are selected based upon the merit of individual companies and therefore performance may well diverge from the short term fluctuations of the comparative index.

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

Other Price Risk Sensitivity

Fixed asset investments are valued at bid prices which equate to their fair value. A full list of the Company's investments is given on pages 15 to 18 of the Annual Report. In addition, a geographical analysis of the portfolio (shown above), an analysis of the portfolio by broad industrial or commercial sector and a list of the 30 largest investments by their aggregate market value (shown above) is given on pages 10 and 11 of the Annual Report Details of derivative financial instruments open at the balance sheet date are shown below. After deducting borrowings 100.0% (2011 - 99.5%) of the Company's net assets are invested in equities. The sensitivity of the Company's equity investments to general movements in equity markets has been adjusted by the use of the equity derivative instruments detailed below, with the purchase of equity index call options increasing it and the sale of equity index futures decreasing it. Further details of the impact of these instruments on the portfolio are set out in the Chairman's Statement on page 4 of the Annual Report. After taking into account the impact of the equity index options and equity index futures open at the balance sheet date, a 3% increase in quoted equity valuations at 30 June 2012 would have increased total assets and total return on ordinary activities by £1,637,000 (2011 - £2,016,000). A decrease of 3% would have had an equal but opposite effect.

Liquidity Risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Company's assets are investments in quoted securities that are readily realisable. The Board monitors the exposure to any one holding. The Company has the power to take out borrowings, which give it access to additional funding when required. The Company's borrowing facilities are detailed below and the maturity profile of its borrowings is set out above.

			2012 £'000	2011 £'000
Short term loan facility			-	2,000
Bank loans			4,927	3,506
			4,927	5,506

A US$5 million multi-currency loan facility and a £2 million loan facility with Lloyds TSB Scotland plc expired on 27 February 2012. Two three-year, fixed rate loan facilities, maturing 20 February 2015, were arranged with Scotiabank Europe PLC. At 30 June 2012 drawings were €3 million at an interest rate of 2.4780% per annum (2011 - €1.32 million at 1.7913% with Lloyds TSB); £2.5 million at an interest rate of 2.6530% per annum (2011 - £2 million at 2.3048% with Lloyds TSB). Nil yen borrowings (2011 - ¥300 million at 1.905% with Lloyds TSB).

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

Credit Risk

This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows:

·    Where the Investment Managers make an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question.

·    The Board regularly receives information from the Investment Managers on the credit ratings of those bonds and other securities in which the Company has invested.

·    The Company's listed investments are held on its behalf by The Bank of New York Mellon, the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Managers monitor the Company's risk by reviewing the custodian's internal control reports and reporting their findings to the Board.

·    Investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Managers. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company's custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed.

·    Transactions involving derivatives, and other arrangements wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest, are subject to rigorous assessment by the Investment Managers of the creditworthiness of that counterparty.

·    Cash is only held at banks that are regularly reviewed by the Managers.

Credit Risk Exposure

The exposure to credit risk at 30 June was:

	2012 £'000	2011 £'000
Fixed interest investments	3,356	4,362
Cash and deposits	1,239	1,359
Debtors and prepayments	985	238
	5,580	5,959

None of the Company's financial assets are past due or impaired.

Fair Value of Financial Assets and Financial Liabilities

The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the balance sheet with the exception of long term borrowings which are stated in accordance with FRS 26. Short term borrowings have a fair value equal to par.

	2012	2012		2011	2011
	Book £'000	Fair £'000		Book £'000	Fair £'000
Fixed rate sterling loan	2,500	2,553		-	-
Fixed rate euro loan	2,427	2,476		-	-
Total long term borrowings	4,927	5,029		-	-

 

PRINCIPAL RISKS AND UNCERTAINTIES (Ctd)

Gains and Losses on Purchased Options

The following purchased options were in position at 30 June:

At 30 June 2012	Number of contracts	Strike price	Expiration date	Potential exposure	Premium paid	Fair value
Description				£'000	£'000	£'000
FTSE 100 call	80	5,500	21/12/12	2,286	291	233
Eurostoxx 50 call	200	2,500	21/12/12	898	295	74
S&P 500 call	50	1,225	21/12/12	2,684	259	505
				5,868	845	812

At 30 June 2011	Number of contracts	Strike price	Expiration date	Potential exposure	Premium paid	Fair value
Description				£'000	£'000	£'000
Nikkei 225 call	100	11,000	09/12/11	1,257	353	73
				1,257	353	73

Gains and (Losses) on Equity Index Futures Sales

The following equity index futures sales were in position at 30 June:

At 30 June 2012	Expiration date	Notional amount	Position	Counterparty	Fair value
Description					£'000
FTSE 100 Sept 2012	21/9/12	(£4,304,200)	Sale	UBS	(114)
Eurostoxx 50 Sept 2012	21/9/12	(€4,275,000)	Sale	UBS	(188)
S&P 500 Sept 2012	21/9/12	(US$6,486,975)	Sale	UBS	(147)
					(449)

Gains and losses on hedges

At 30 June 2012 there were no unrecognised gains/losses on hedges (2011 - nil).

Currency gains/losses are taken to the capital reserve and are not reflected in the revenue account unless they are of a revenue nature.

Capital Management

The capital of the Company is its share capital and reserves as set out in notes 13 and 14 in the Annual Report together with its borrowings (see notes 11 and 12 in the Annual Report). The objective of the Company is to achieve capital and income growth by investing on a worldwide basis. The Company's investment policy is set out on page 19 in the Annual Report. In pursuit of the Company's objective, the Board has a responsibility for ensuring the Company's ability to continue as a going concern and details of the related risks and how they are managed are set out above. The Company has the ability to issue and buy back its shares and changes to the share capital during the year are set out in notes 14 and 15 in the Annual Report. The Company does not have any externally imposed capital requirements other than the covenants on its loans which are: (i) Total borrowings shall not exceed 33.33% of the Company's investment portfolio; and (ii) The Company's minimum net asset value shall be £32 million.

Investments

At 30 June 2012	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities	57,843	2,129	-	59,972
Listed equity index options	812	-	-	812
Listed convertible securities	712	-	-	712
Listed debt securities	1,341	684	1,248	3,273
Unlisted equities	-	-	398	398
Total financial asset investments	60,708	2,813	1,646	65,167

At 30 June 2011	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities	63,318	2,454	-	65,772
Listed equity index options	73	-	-	73
Listed convertible securities	203	-	-	203
Listed debt securities	1,380	-	2,101	3,481
Unlisted equities	-	-	153	153
Unlisted debt securities	-	-	678	678
Total financial asset investments	64,974	2,454	2,932	70,360

Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 29 'Financial Instruments: Disclosures', the above table provides an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value.

Fair Value Hierarchy

The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

Level 1 - investments with quoted prices in an active market;

Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly being derived from market prices; and

Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.

Other Risks

Other risks faced by the Company include the following:

Regulatory Risk - failure to comply with applicable legal and regulatory requirements could lead to suspension of the Company's Stock Exchange Listing, financial penalties or a qualified audit report. Breach of section 1158 of the Corporation Tax Act 2010 could lead to the Company being subject to tax on capital gains. The Managers monitor investment movements and the level of forecast income and expenditure to ensure the provisions of section 1158 are not breached. Baillie Gifford's heads of Business Risk & Internal Audit and Regulatory Risk provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes.

Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised.

Operational/Financial Risk - failure of the Managers' accounting systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. The Managers have a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption or major disaster. The Board reviews the Managers' Report on Internal Controls and the reports by other key third party providers are reviewed by the Managers on behalf of the Board.

Premium/Discount Volatility - the premium/discount at which the Company's shares trade can change. The Board monitors the level of premium/discount and the Company has authority to issue or buy back its own shares.

Gearing Risk - the Company may borrow money for investment purposes. If the investments fall in value, any borrowings will magnify the extent of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings. All borrowings require the prior approval of the Board and gearing levels are discussed by the Board and Managers at every meeting. The majority of the Company's investments are in listed securities that are readily realisable.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements respectively; 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 adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Company's page of the Managers' website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed within the Directors and Management section of the Annual Report confirm that, to the best of their knowledge:

•     the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and loss of the Company; and

•     the Directors' Report 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.

By order of the Board

Richard R J Burns

16 August 2012

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

INCOME STATEMENT

	For the year ended 30 June 2012				For the year ended 30 June 2011
	Revenue £'000	Capital £'000	Total £'000		Revenue £'000	Capital £'000	Total £'000
(Losses)/gains on investments	-	(5,604)	(5,604)		-	12,589	12,589
Gains on futures contracts	-	614	614		-	-	-
Currency losses	-	(346)	(346)		-	(117)	(117)
Income (note 2)	1,259	-	1,259		1,338	-	1,338
Investment management fee	(151)	(151)	(302)		(159)	(159)	(318)
Other administrative expenses	(233)	-	(233)		(186)	-	(186)
Net return before finance costs and taxation	875	(5,487)	(4,612)		993	12,313	13,306
Finance costs of borrowings	(63)	(63)	(126)		(54)	(54)	(108)
Net return on ordinary activities before taxation	812	(5,550)	(4,738)		939	12,259	13,198
Tax on ordinary activities	(32)	-	(32)		(63)	-	(63)
Net return on ordinary activities after taxation	780	(5,550)	(4,770)		876	12,259	13,135
Net return per ordinary share (note 3)	2.93p	(20.88p)	(17.95p)		3.43p	48.00p	51.43p

The total column of the Income Statement is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

BALANCE SHEET

30 June 2012 £'000		30 June 2011 £'000
Fixed Assets
Investments held at fair value through profit or loss	61,167		70,360
Current Assets
Debtors	985		238
Cash and deposits	1,239		1,359
	2,224		1,597
Creditors Amounts falling due within one year (note 5)	(628)		(5,668)
Net current assets/(liabilities)	1,596		(4,071)
Total assets less current liabilities	66,763		66,289
Creditors Amounts falling due after more than one year (note 5)	(4,927)		-
Total net assets	61,836		66,289
Capital and reserves
Called up share capital	1,343		1,318
Capital redemption reserve	16		16
Share premium	4,983		3,818
Capital reserve	54,004		59,554
Revenue reserve	1,490		1,583
Shareholders' funds	61,836		66,289
Net asset value per ordinary share (after deducting borrowings at fair value)	229.8p		251.4p
Net asset value per ordinary share (after deducting borrowings at par)	230.2p		251.4p

 

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

 

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 30 June 2012

	Share capital £'000	Capital redemption reserve £'000	Share premium £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 July 2011	1,318	16	3,818	59,554	1,583	66,289
Net return on ordinary activities after taxation	-	-	-	(5,550)	780	(4,770)
Shares issued (note 6)	25	-	1,165	-	-	1,190
Dividends paid during the year (note 4)	-	-	-	-	(873)	(873)
Shareholders' funds at 30 June 2012	1,343	16	4,983	54,004	1,490	61,836

For the year ended 30 June 2011

	Share capital £'000	Capital redemption reserve £'000	Share premium £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 July 2010	1,241	16	20	47,295	1,490	50,062
Net return on ordinary activities after taxation	-	-	-	12,259	876	13,135
Shares issued (note 6)	77	-	3,798	-	-	3,875
Dividends paid during the year (note 4)	-	-	-	-	(783)	(783)
Shareholders' funds at 30 June 2011	1,318	16	3,818	59,554	1,583	66,289

 

*Capital reserve balance as at 30 June 2012 included investment holding gains of £11,594,000 (30 June 2011: gains of £16,251,000).

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

CASH FLOW STATEMENT
	For the year ended 30 June 2012			For the year ended 30 June 2011
	£'000	£'000		£'000	£'000
Net cash inflow from operating activities		691			828
Servicing of finance
Interest and breakage costs paid	(129)			(109)
Net cash outflow from servicing of finance		(129)			(109)
Taxation
Corporation tax paid	-			-
Total tax paid		-			-
Financial investment
Acquisitions of investments	(29,882)			(29,760)
Disposals of investments	29,608			27,242
Futures	200
Realised currency (loss)/profit	(457)			42
Net cash outflow from financial investment		(531)			(2,476)
Equity dividends paid (note 4)		(873)			(783)
Net cash outflow before financing		(842)			(2,540)
Financing
Shares issued	1,190			3,875
Shares purchased for cancellation	-			(378)
Bank loans repaid	(5,465)			-
Bank loans drawn down	4,997			-
Net cash inflow from financing		722			3,497
(Decrease)/increase in cash		(120)			957
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the year		(120)			957
Net cash inflow from bank loans		468			-
Exchange movement on bank loans		111			(159)
Movement in net debt in the year		459			798
Net debt at 1 July		(4,147)			(4,945)
Net debt at 30 June		(3,688)			(4,147)
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return before finance costs and taxation		(4,612)			13,306
Losses/(gains) on investments		5,604			(12,589)
Gains on futures contracts		(614)			-
Currency losses		346			117
Amortisation of fixed interest book cost		(25)			(57)
Decrease in accrued income		46			86
(Increase)/decrease in debtors		(4)			2
(Decrease)/increase in creditors		(10)			28
Overseas tax suffered		(40)			(65)
Net cash inflow from operating activities		691			828

MID WYND INTERNATIONAL INVESTMENT TRUST PLC

NOTES

1.	The financial statements for the year to 30 June 2012 have been prepared on the basis of the accounting policies set out in the Company's Annual Report and Financial Statements at 30 June 2011, which are unchanged from the prior year and have been applied consistently.
				30 June 2012 £'000					30 June 2011 £'000
2.	Income
	Income from investments and interest receivable			1,258					1,335
	Other income			1					3
				1,259					1,338
				30 June 2012 £'000					30 June 2011 £'000
3.	Net return per ordinary share
	Revenue return			2.93p					3.43p
	Capital return			(20.88p)					48.00p
	Total return			(17.95p)					51.43p
	Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of £780,000 (2011 - £876,000) and on 26,577,628 (2011 - 25,541,500 - being 5,108,300 adjusted for the five for one share split) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital loss for the financial year of £5,550,000 (2011 - net capital gain of £12,259,000) and on 26,577,628 (2011 - 25,541,500 - being 5,108,300 adjusted for the five for one share split) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue.
			2012			2011		2012 £'000		2011 £'000
4.		Ordinary Dividends
		Amounts recognised as distributions in the year:
		Previous year's final (paid 14 October 2011)	2.00p			1.80p		527		447
		Interim (paid 5 April 2012)	1.30p			1.30p		346		336
			3.30p			3.10p		873		783

MID WYND INTERNATIONAL INVESTMENT TRUST PLC NOTES (Ctd)
4.	Ordinary Dividends (Ctd)
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered.  The revenue available for distribution by way of dividend for the year is £780,000 (2011 - £876,000).
		2012		2011		2012 £'000		2011 £'000
	Dividends paid and payable in respect of the year:
	Interim dividend per ordinary share (paid 5 April 2012)	1.30p		1.30p		346		336
	Proposed final dividend per ordinary share (payable 12 October 2012)	2.00p		2.00p		537		527
		3.30p		3.30p		883		863
	If approved the final dividend will be paid on 12 October 2012 to all shareholders on the register at the close of business on 7 September 2012. The ex-dividend date is 5 September 2012. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for receipt of elections for this dividend is 21 September 2012.
5.	A US$5 million multi-currency loan facility and a £2 million loan facility with Lloyds TSB Scotland plc expired on 27 February 2012. Two three-year, fixed rate loan facilities, maturing 20 February 2015, were arranged with Scotiabank Europe PLC. At 30 June 2012 drawings were as follows: €3 million at an interest rate of 2.4780% per annum (2011 - €1.32 million at 1.7913% with Lloyds TSB); £2.5 million at an interest rate of 2.6530% per annum (2011 - £2 million at 2.3048% with Lloyds TSB); and Nil yen borrowings (2011 - ¥300 million at 1.905% with Lloyds TSB). The fair value of borrowings at 30 June 2012 was £5,029,000 (2011 - short term borrowings - fair value equal to par).
6.	At the Company's Annual General Meeting in October 2011, shareholders approved a five for one share split and subsequently received five ordinary shares of 5p each for every ordinary share of 25p previously held. In the year to 30 June 2012 the Company allotted 500,000 ordinary shares with a nominal value of £25,000 for total consideration of £1,190,000 (2011 - allotted 310,000 ordinary shares with a nominal value of £77,500 for consideration of £3,875,000). At 30 June 2012 the Company had authority to buy back 3,951,938 ordinary shares and to allot a further 2,136,383 ordinary shares without application of pre-emption rights in accordance with the authorities granted at the AGM in October 2011. Under the provisions of the Company's Articles of Association share buybacks are funded from the capital reserve.
7.	The Annual Report and Financial Statements including the Notice of Annual General Meeting will be available on the Managers' website www.bailliegifford.com‡  on or around 28 August 2012.
8.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 June 2012.  The financial information for 2011 is derived from the financial statements for 2011 which have been delivered to the Registrar of Companies.  The Auditors have reported on the 2011 and 2012 accounts; their reports for both years were unqualified and did not contain a statement under sections 495 to 497 of the Companies Act 2006.  The statutory accounts for 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
	None of the views expressed in this document should be construed as advice to buy or sell a particular investment.
	‡Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

- ends -

 

END

 

 

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