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Mid Wd Ittil Ivtmt Tt PLCAnnual Report and Financial Statements 30 June 2010
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1 CompanySummary2 Year’sSummary
3 FiveYearSummary
4 Chairman’sStatement
7 DirectorsandManagement
9 TenYearRecord
10 PerormanceAttribution
10 InvestmentChanges
11 ContributorstoPerormance
11 ThirtyLargestEquityHoldings12 ClassifcationoInvestments
13 Managers’PortolioReview
17 ListoInvestments
21 Directors’Report
29 Directors’RemunerationReport
31 StatementoDirectors’Responsibilities
32 IndependentAuditors’Report
34 IncomeStatement
Contents
35 BalanceSheet36 ReconciliationoMovementsin Shareholders’Funds
37 CashFlowStatement
38 NotestoFinancialStatements
53 NoticeoAnnualGeneralMeeting
56 FurtherShareholderInormation
57 AnalysisoShareholders
Mid Wynd invests on an international basis.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent nancial adviser authorised under the FinancialServices and Markets Act 2000 immediately.
If you have sold or otherwise transferred all of your ordinary shares in Mid Wynd International Investment Trust PLC, please forward thisdocument and the accompanying form of proxy as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agentthrough whom the sale or transfer was or is being effected for delivery to the purchaser or transferee.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 1
CoMPany suMMary
Company Summary
Investment Policy
MidWyndseekstomeetitsobjectiveoachievingcapitalandincomegrowththroughinvestmentprincipallyinaportolioointernationalquotedequities.TheproportionotheportolioinvestedinUKcompanieswillnotnormallyexceed25%.
FurtherdetailsotheCompany’sinvestmentpolicyaregivenintheDirectors’Report.
Company History
MidWyndcantraceitsoriginstoaDundeebasedtextilebusinessoperatedbysuccessivegenerationsotheScottamily
since1797,whenpremiseswerefrstpurchasedorthebusinessinthelaneor‘wynd’romwhichtheCompanytakesitsname.MidWyndobtainedalistingoitssharecapitalontheLondonStockExchangeinOctober1981andhas,sincethattime,conducteditsbusinessasaninvestmenttrustcompany.
Comparative Index
TheprincipalindexagainstwhichperormanceismeasuredistheFTSEWorldIndexinsterlingterms.
Management Details
BaillieGiord&CoareappointedasinvestmentmanagersandsecretariestotheCompany.Themanagementcontractcanbeterminatedattwelvemonths’notice.
Management Fee
BaillieGiord&Co’sannualremunerationis0.50%othenetassetsotheCompanyattributabletoitsshareholders,calculatedonaquarterlybasis.
Capital Structure
AttheyearendtheCompany’ssharecapitalconsistedo4,962,766ullypaidordinaryshareso25peach.TheCompanyhasbeengrantedauthoritytobuybackalimitednumberoitsownordinarysharesorcancellation.
AIC
TheCompanyisamemberotheAssociationoInvestmentCompanies.
Savings Vehicles
MidWyndsharescanbeheldthroughavarietyosavingsvehicles(seepage57ordetails).
Notes
Noneotheviewsexpressedinthisdocumentshouldbeconstruedasadvicetobuyorsellaparticularinvestment.
InvestmenttrustsareUKpubliclistedcompaniesandassuchcomplywiththerequirementsotheUKListingAuthority.TheyarenotauthorisedorregulatedbytheFinancialServicesAuthority.
Mid Wynd’s objective is to achieve capital and income growth by investingon a worldwide basis.
Company data at 30 June 2010
Total assets Shareholders’ funds Market capitalisation
£55.4m† £50.1m £46.4m
†beoredeductionobankloans.
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2 ANNUAL REPORT 2010
year’s suMMary
Year to Year to
30 June 2010 30 June 2009
Year’s high and low High Low High Low
Shareprice* 963.5p 657.5p 826.0p 566.0pNetassetvalue(aterdeductingborrowingsatairvalue) 1,113.8p 766.6p 994.4p 629.2pNetassetvalue(aterdeductingborrowingsatpar) 1,114.4p 767.1p 994.3p 629.2p(Discount)/premium(aterdeductingborrowingsatairvalue) (6.8%) (23.1%) 1.4% (21.0%)(Discount)/premium(aterdeductingborrowingsatpar) (6.8%) (23.2%) 1.4% (21.0%)
30 June 30 June
2010 2009 % change
Totalassets(beoredeductionobankloans) £55.4m £41.0mBankloans £5.3m £1.9mEquityshareholders’unds £50.1m £39.1m
Netassetvalueperordinaryshare(aterdeductingborrowingsatairvalue) 1,008.2p 776.5p 29.8Netassetvalueperordinaryshare(aterdeductingborrowingsatpar) 1,008.7p 777.0p 29.8Shareprice* 935.0p 672.5p 39.0FTSEAll-ShareIndex 2,543.5 2,172.1 17.1FTSEWorldIndex(insterlingterms) 303.7 253.4 19.9
Dividendspaidandproposed 15.50p 15.00p 3.3Revenuereturnperordinaryshare 16.85p 16.26p 3.6Totalexpenseratio 0.87% 0.77%
Discount(aterdeductingborrowingsatairvalue) 7.3% 13.4%Discount(aterdeductingborrowingsatpar) 7.3% 13.4%
30 June 30 June2010 2009
Total return per ordinary share
Revenue 16.85p 16.26p
Capital 229.23p (216.24p)
Total 246.08p (199.98p)
*Atmidmarketprice.
Year’s Summary
One Year Performance
(fguresrebasedto100at30June2009)
Pastperormanceisnotaguidetoutureperormance.
Source: Thomson Financial Datastream/Baillie Gifford & Co
NAV (after deducting borrowings at fair value)
Share price
FTSE World Index (in sterling terms)
Dividends are not reinvested.
20102009
J A S O D J F M A M JN
95
100
105
110
115
120
125
130
135
140
145
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 3
Five Year SummaryThe following charts indicate how an investment in Mid Wynd has performed relative
to its comparative index and its underlying net asset value over the ve year period to
30 June 2010.
fIe year suMMary
5 Year Total Return Performance
(fguresrebasedto100at30June2005)
Dividend and RPI Growth
(fguresrebasedto100at30June2005)
Annual Share Price Total Return and NAVTotal Return (relative to the FTSE WorldIndex Total Return in sterling terms)
Discount to Net Asset Value
(plottedonamonthlybasis)
Pastperormanceisnotaguidetoutureperormance.
Source: Thomson Financial Datastream
NAV (par) total return
Share price total return
FTSE World Index (in sterling terms) total return
CUMULATIVE TO 30 JUNE
20102005 2006 2007 2008 2009
80
100
120
140
160
180
Source: Thomson Financial Datastream
NAV (par) total return
Share price total return
YEARS TO 30 JUNE
20102006 2007 2008 2009
-10
-5
0
5
10
15
20
Source: Thomson Financial Datastream
Mid Wynd discount
The discount is the difference between Mid Wynd’s quotedshare price and its underlying net asset value (at par).
YEARS TO 30 JUNE
20092005 2006 2007 2008(25%)
(5%)
2010
(10%)
(15%)
(20%)
Source: Thomson Financial Datastream/Baillie Gifford & Co
RPI
Mid Wynd’s dividend*
*The 2008 dividend excludes the special dividendof 2.30p.
YEARS TO 30 JUNE
20092006 2007 2008
100
110
120
130
140
150
160
170
180
2010
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4 ANNUAL REPORT 2010
ChaIrMan’s sTaTeMenT
Performance
Intheyearto30June2010,netassetvaluepershareroseby29.8%to1,008.2ppershare,thesharepriceincreased39.0%to935.0pandtheFTSEWorldIndexinsterlingtermsroseby19.9%.Theimprovementinperormanceshowninthesecondhalolast yearcontinuedasmarketsreboundedandMidWynddidindeed,aswehopedlastyear,managetomakehayasthesunshone.NAVpersharereachedanewhigho1,113.8pinmidApril.Inthefnaltwomonthsoouryearitebbedby9.5%romitspeakasdatahaveunveiledaslowinginthepaceoeconomicgrowth,astillsomewhatjoblessWestandthelevellingoutocorporateearningsexpectationsalbeitatimpressivelevels.Allothisisavastimprovementonthedramaandshockenduredinlate2008andearly2009.Thereisrelativelylittlementiontodayosystemicearsoverbankingsystemsand,instead,someocusonahandulominorsovereigns’solvencyproblems.Governmentshavetakenthedebtburdenuponthemselves.Someareweigheddownmorethanothersinconsequence.Ithisappearsnoveltoourgeneration,itisscarcelyunknowntoormerones.Despitethewideningosomesovereignandcorporatecreditspreads,thespectreoinationremainsapaleshadowandmostgovernmentbondyieldshavesteadilyallenintheaceorapidlyrisingstocksodebt.Thiswedidnotanticipate,
andcontinuetomistrust.Wehopethatgovernmentbondsarenotaballooninsearchoapin,orthatwouldhaveadverseconsequencesacrossmostassetclasses.
Havingbemoanedtheailureoourbondholdingstocushionusagainstthedownturninmarketslastyearitseemsonlysymmetricaltopointoutthatourbondportolio,largelythesamebondportolio,outperormedthosesameequitiesthisyearinarisingmarket.CQS,LloydscontingentconvertiblesandtheAthenadistresseddebtundareattherootothisphenomenonandarediscussedintheManagers’review.
Earnings and dividend
Earningso16.85ppersharecomparewith16.26ppershareromtheyeartoJune2009.Despitedismallevelsointerestondepositandgenerallylowcashlevelstogetherwithasteadilyallingbondallocation,revenueswerestrong.Thisreectsaewlargeindividualeatures(Seadrill,MarineHarvest,Kone).Againstourexpectationsolastyear,thereore,wefndourselvesoncemorewitharisingstreamodividendstoreport.Giventheextentosalesromthebondportolio,however,thisisunlikelytocontinue.
Afnaldividendo9.0pisrecommended,takingtheullyeartotalto15.5ppershare,anincreaseo3.3%onlastyear.
Pastperormanceisnotaguidetoutureperormance.
Chairman’s Statement
• Relative and absolute NAVand share price performancewas strong over the year; up29.8% and 39.0% respectively
compared to 19.9% for thecomparative index.
• Earnings per share increased to16.85p (2009 – 16.26p) and anal dividend of 9.0p per shareis being recommended, taking
the total to 15.5p per share forthe year (2009 – 15.0p).
• Investments continue to be madein stocks that should benetfrom continuing epochal shiftsin economic power or where
mispricing presents a specicopportunity.
highlights
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 5
ChaIrMan’s sTaTeMenT
Discount and share buybacks
Thediscountnarrowedrom13.4%to7.3%overthecourseothe year.TheBoardconsidersthelevelodiscountonaregularbasisandhasauthorisedtherepurchaseoshareswhenthiswillbeobenefttocontinuingshareholdersaswellasbeingintheinterestothoseshareholderswhomayneedtosellsomeorallotheirshares.
Duringtheyearto30June2010theCompanyutiliseditsauthoritytorepurchaseitsownsharesorthefrsttime,buyingback65,000
sharesorcancellationatacosto£616,000.AttheAnnualGeneralMeetingotheCompanytobeheldon22September2010theBoardwillseektorenewthebuybackauthorityandextendittopermitsharesboughtbacktobeheldintreasury,orreissueorcancellationatalaterdate.
Outlook
Thelongrunchallengesacedbydevelopedeconomieshavechangedlittleoverthepastyear.Massivestimulusandrecordlowinterestrateshaveproducedasoartepidrecoveryinenddemandandasparklingrecoveryinassetmarkets.Asurprisinglywiderangeopossibleprognosesjostleorspace,withdebtdeationatoneendandhighinationattheother.Thedistributionoprobabilitiesseemsunusuallywidelydispersedwithinthiswiderangeopossibleoutcomes.Fiscalretrenchmentisbeingamboyantlydeployedtosupportconfdenceinpublicfnancesandenablemonetarypolicytoremainloose.Thisissomethingoahighwireact.
Hereisasynopsisoplausible(butnotexclusive)scenariosortheindebtedWestrecentlyprovidedbyHSBC’schieeconomist:
1. The‘theological’option:fscaldefcitproblemsareallcyclical,notstructural.Nominalgrowthwilltherebysolveeverything.
2. Austerity:peoplemostlydislikeitenoughtovoteagainstit,andtoomuchoitisseldeeating.AsktheIMF.OrArgentina.OrGreece.Theewexamplesthathavehistoricallysucceeded–Swedenintheearly‘90sisroutinelyrunout–havebenefttedromoneormoreotheollowingco-drivers:devaluation,allingglobalbondyields,allingination,aleveragingupintheprivatesector,aboomingglobaleconomy.Itishardtobehopeulthatmanyothesemaybewithusincombinationstartingromhere.
3. Japanese-styledeation:tolerableinretainingthestabilityorealpercapitaGDP.Thispathonlyworksoranagedsocietywithaloathingochangewhere,critically,domesticsavingsarelargeenoughtosupportanincreasinglybustgovernment.Buyssometimebut,likedebtandination,borrowsromuturegenerations.Notopentomany.Wouldseemtomaketheunderlyingproblemworsenotbetter.
4. Deaultbystealth:negativerealinterestratesandrisingination–baby-boomerslikeditwhentheywereindebt;theymaywellnotnowtheyarethesavers.
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6 ANNUAL REPORT 2010
5. Devaluation:onlytobeattemptediyourdebtislargelyinyourowncurrency.Notagameormultipleplayerssimultaneously.
6. Outrightdeault:allthatremainsatertheseotherpossibilitieshavebeenexhausted.
Happilyorourshareholders,webelievewehavemorechoicesthanjusttheseavailabletous.Therearemanymorepeopleintoday’sworldwhoareexperiencingoroughtsoontoexperiencevastlyimprovedprospectsorthemselvesandtheirchildrenthantherearethosewhofndthemselvesunder-skilled,over-aged,increasinglywithoutthewelaresaetynettheyexpectedandmiredindebt.Thatthisissoowesinlargeparttoglobalisation,industrialisation,educationandproductivity.
Despitethevicissitudesoshorttermpolicytightening,realstrengthandpotentialresidesinthosesuchasChinese,Indian,Indonesian,TurkishandBrazilianconsumers.Asyetitislargelyuntapped.Realinterestratesinthesecountriesremainhigh,thoughmainlyallingacrossrecentcycles,andaccesstocreditisstillconstrained.Shouldthischange,asseemsareasonable10yearexpectation,weplantobebenefciariesosuchacontinuedcomingoage.Lookingthroughtheoddityowherestocksarelistedandconcentratingmoreonwhereourbusinessesandtheircustomersactuallyare,theeectiveexposuretothischangeisclosertohalor60%oourassetsthantheonethirdorsothatderivesromthelistingsdata.Iwouldconesstowonderingattimeswhetherthisisyetsufcientlybold.
Separately,giventheebrilenatureomarkets,ongoingprivatesectorde-leveragingandalingeringspiritotrepidationatertheeventsolate2008andearly2009,itseemstousthereisarangeoattractiveunusual,neglected,illiquidorunlovedinvestmentsacrossaspanoendmarkets.Litigationfnance,liesettlementsandturnaroundundsareexamplesothis.Manyaceindividualchallengesoruncertaintiesthatareairlyspecifctotheirowncircumstances.Somethrowupawiderangeopotentialoutcomes.Allwouldseemtooerexploitabledegreesomispricingotheopportunitieseachholdsorinvestmentreturns.
PatrickMSBarron5August2010
ChaIrMan’s sTaTeMenT
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 7
Directors and ManagementThe Directors of the Company have many years’ experience of investment trusts and
professional services. Baillie Gifford & Co, a leading UK investment management rm,
have acted as Managers and Secretaries to the Company since it listed on the London
Stock Exchange in 1981.
DIreCTors anD ManaGeMenT
3 RAR Napier, LLB, LLM, ASIPRussellNapierbecameaDirectorotheCompanyin2009.HejoinedBaillieGiordin1989managingundsintheJapanese,USand,fnally,Asianmarkets.HemanagedAsianportoliosorForeign&ColonialEmergingMarketsrom1994andin1995becameAsianequitystrategistorstockbrokersCLSAinHongKong.Since1999hehasbeenaconsultantglobalmacrostrategistwithCLSAAsia-Pacifcmarkets.Heistheauthoro‘AnatomyoaBear
–LessonsromWallStreet’sFourGreatBottoms’andhehasestablishedandrunsacoursecalled‘APracticalHistoryoFinancialMarkets’atTheEdinburghBusinessSchool.HeisadirectorotheDidaskoEducationCompanyLimited,OrlockAdvisorsLimitedandtheScottishInvestmentTrustPLC.
4 MCN Scott, QCMalcolmScottbecameaDirectorotheCompanyin1990.HewaseducatedatTrinityCollege,GlenalmondandthereateratGonville&CaiusCollege,CambridgeandGlasgowUniversity.HebecameanAdvocatein1978andaQCin1991.HeisapractisingAdvocate.
Directors
1 PMS Barron, RDPatBarronhasbeenaDirectorotheCompanysince1979,wasappointedChairmanin1989andisChairmanotheNominationCommittee.HavingarmedinPerthshireor30years,heconvertedhisarmintoagolcourseinthemid-90s,retiringin2006.Heservedor20yearsintheRoyalNavalReserveretiringintherankoCommander.
2 RRJ Burns, W.S.
RichardBurnsbecameaDirectorotheCompanyatthetimeothelistingoitssharesin1981.Hequalifedasasolicitorin1971andhejoinedBaillieGiordin1973asatraineeinvestmentmanager,becomingaPartnerin1977andwasjointSeniorPartnerrom1999untilhisretiralinApril2006.HeisadirectoroEPGlobalOpportunitiesTrustPLC,StandardLieEquityIncomeTrustPLC,TheBankersInvestmentTrustPLC,JPMorganIndianInvestmentTrustplc,TheArmyandNavyInvestmentCompanyLimitedandisaTrusteeotheNationalGalleriesoScotland.
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8 ANNUAL REPORT 2010
1 PMS Barron, RD 2 RRJ Burns, W.S.
DIreCTors anD ManaGeMenT
AllDirectorsaremembersotheNominationandAuditCommittees,withtheexceptionoMrBurns,whoisnotamemberotheAuditCommittee.
Managers and Secretaries
MidWyndismanagedbyBaillieGiord&Co,aninvestmentmanagementfrmormedin1927outothelegalfrmBaillie&Giord,WS,whichhadbeeninvolvedininvestmentmanagementsince1908.
BaillieGiordareoneothelargestinvestmenttrustmanagersintheUKandcurrentlymanageeightinvestmenttrusts.BaillieGiordalsomanageunittrustsandOpenEndedInvestmentCompanies,togetherwithinvestmentportoliosonbehalopensionunds,charitiesandotherinstitutionalclients,bothintheUKandoverseas.FundsunderthemanagementoradviceoBaillieGiordtotalaround£60billion.
BasedinEdinburgh,theyareoneotheleadingprivatelyownedinvestmentmanagementfrmsintheUK,with35partnersandastaoaround650.
ThemanageroMidWynd’sportolioisMichaelMacPhee,apartneroBaillieGiord.
ThefrmoBaillieGiord&CoisauthorisedandregulatedbytheFinancialServicesAuthority.
3 RAR Napier, LLB 4 MCN Scott, QC
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 9
Ten year reCorD
Capital
FTSEWorld Index
Net FTSE (in sterling Dividend paidasset value Net Share price World Index terms) Revenue and proposed Retail
At per share asset value Share total (in sterling total earnings per share price30 June (at par) total return †† price return †† terms) †† return †† per share (net) # index ††
2000 100 100 100 100 100 100 100 100 1002001 96 98 91 92 87 88 112 102 1022002 82 84 83 86 67 69 119 107 1032003 76 80 76 80 60 63 123 111 1062004 86 91 79 86 66 72 94 111 1092005▲ 98 106 92 101 74 81 110 113 1122006 116 125 114 126 83 93 131 127 1162007 129 141 127 143 94 108 151 145 1212008 128 142 124 142 83 99 236 169 1272009 100 114 102 119 70 85 189 181 1252010 130 150 141 169 84 105 196 187 131
Compoundannualreturns
5year 5.8% 7.1% 8.9% 10.8% 2.6% 5.2% 12.3% 10.5% 3.1%10year 2.7% 4.1% 3.5% 5.4% (1.8%) 0.5% 7.0% 6.4% 2.7%
Cumulative Performance (taking 2000 as 100)
†† Source:ThomsonFinancialDatastream.# The2008dividendexcludesthespecialdividendo2.30p.▲ Thefgurespriorto2005havenotbeenrestatedorthechangesinaccountingpoliciesimplementedin2006.
Pastperormanceisnotaguidetoutureperormance.
Equity NetAt Total shareholders’ asset value Share30 June assets* Bank loans funds per share (at par) price Discount †
£’000 £’000 £’000 p p %
2000 40,804 1,873 38,931 774.3 662.5 14.42001 39,462 1,939 37,523 746.3 602.5 19.3
2002 33,671 1,861 31,810 632.7 550.0 13.12003 31,425 1,737 29,688 590.5 501.0 15.22004 35,053 1,654 33,399 664.3 526.0 20.82005▲ 40,209 1,674 38,535 766.4 611.0 20.32006 46,672 1,622 45,050 896.0 753.0 16.02007 52,590 2,422 50,168 997.8 842.5 15.62008 51,411 1,422 49,989 994.3 824.0 17.12009 40,953 1,888 39,065 777.0 672.5 13.42010 55,409 5,347 50,062 1,008.7 935.0 7.3#
* Totalassetscomprisetotalnetassetsbeoredeductionobankloans.† DiscountisthedierencebetweenMidWynd’squotedsharepriceanditsunderlyingnetassetvalue(atpar).▲ Thefgurespriorto2005havenotbeenrestatedorthechangesinaccountingpoliciesimplementedin2006.# At30June2010thenetassetvalueaterdeductingborrowingsatairvaluewas1,008.2p.Thediscountonthesamebasiswas7.3%.
Dividend paidAvailable Revenue and proposed Total
Year to Gross for ordinary earnings per share expense Actual Potential30 June revenue shareholders per share (net)# ratio § gearing ¶ gearing ll
£’000 £’000 p p %
2000 804 432* 8.59* 8.30 0.97 86 1052001 849 484 9.64 8.50 0.89 90 1052002 858 512 10.18 8.90 0.86 82 1062003 887 533 10.60 9.20 0.93 83 1062004 721 406 8.07 9.20 0.98 95 1052005▲ 833 475 9.43 9.40 0.90 92 1042006 996 564 11.21 10.50 0.94 96 1042007 1,113 649 12.93 12.00 0.84 99 1052008 1,561 1,020 20.29 14.00 0.82 86 1032009 1,336 818 16.26 15.00 0.77 87 105
2010 1,263 847 16.85 15.50 0.87 105 111# The2008dividendexcludesthespecialdividendo2.30p.§Ratioototaloperatingcoststoaverageshareholders’unds.The2008fgureexcludestheimpactoVATrecovered.Witheectrom2009operatingcostsare
calculatedwithoutanydeductionorcorporationtaxreliethereon.Figurespriorto2009havebeenrestatedaccordingly.¶ Totalassets(includingalldebtusedorinvestmentpurposes)lessallcashandfxedinterestsecurities(excludingconvertibles)dividedbyshareholders’unds.ll Totalassets(includingalldebtusedorinvestmentpurposes)dividedbyshareholders’unds.* Restatedorchangeinaccountingpolicytochargeexpenses50:50betweenrevenueandcapital.▲ Thefgurespriorto2005havenotbeenrestatedorthechangesinaccountingpoliciesimplementedin2006.
Revenue Gearing Ratios
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10 ANNUAL REPORT 2010
Contribution
Mid Wynd Contribution attributable to:
Index allocation asset allocation Performance* to relative Stock Asset
01.07.09 30.06.10 01.07.09 30.06.10 Mid Wynd Index return selection allocation†
Portfolio breakdown % % % % % % % % %
UK 9.0 8.4 8.8 22.9 39.2 19.9 3.4 3.7 (0.3)
Europeex.UK 19.8 18.4 22.5 21.9 26.2 15.9 1.9 2.4 (0.5)
NorthAmerica 47.6 47.9 20.4 20.3 29.3 26.1 (0.3) 0.5 (0.8)
AsiaPacifcincludingJapan 16.2 17.1 11.8 6.9 19.9 18.6 0.1 0.2 (0.1)
EmergingMarkets 7.4 8.2 21.9 31.7 33.2 35.7 1.5 (0.1) 1.6
Bonds – – 18.6 5.2 55.4 – 1.4 – 1.4
Cash – – 0.8 1.8 – – (0.9) – (0.9)
Loans – – (4.8) (10.7) 9.8 – 0.8 – 0.8
Total 100.0 100.0 100.0 100.0 32.7 22.9 7.9 6.7 1.2
Thefguresaboveortotalassetsaremadeupototalnetassetsbeoredeductionothebankloans.
*Equitiesincludelimitedpartnerships,unittrusts,OEICs,SICAVsandconvertibleloannotesexpectedtoconverttoequity.
Investment Changes (£’000)
Valuation at Net acquisitions/ Appreciation/ Valuation at30 June 2009 (disposals) (depreciation) 30 June 2010
Equities*:UK 3,178 6,361 1,902 11,441
ContinentalEurope 9,122 (472) 2,338 10,988
NorthAmerica 8,027 (233) 2,428 10,222
AsiaPacifcincludingJapan 4,632 (1,902) 749 3,479
EmergingMarkets 8,627 4,655 2,579 15,861
Totalequities 33,586 8,409 9,996 51,991
Bonds:Sterlingbonds 1,125 (1,000) 773 898
Eurobonds 1,005 (1,053) 160 112USdollarbonds 3,915 (3,145) 815 1,585
Japaneseyenbonds 1,145 (1,378) 233 –
Totalbonds 7,190 (6,576) 1,981 2,595
Totalinvestments 40,776 1,833 11,977 54,586
Netliquidassets 177 617 29 823
Totalassets 40,953 2,450 12,006 55,409
Performance Attribution for the year to 30 June 2010 (in sterling terms)ComputedrelativetotheFTSEWorldIndex(insterlingterms)withnetincomereinvested.
Pastperormanceisnotaguidetoutureperormance.
Source:Statpro/BaillieGiord&Co
*Theabovereturnsarecalculatedonatotalreturnbasiswithnetincomereinvested.MidWynd’sfguresrepresentthereturnsontheCompany’sportolioandtheindexfguresoreachgeographicalarearepresentthereturnontheappropriateFTSEindex.
†Assetallocationincludesthecontributionattributabletocurrencymovements.
Contributionscannotbeaddedtogetherastheyaregeometric;orexample,tocalculatehowareturno32.7%againstanindexreturno22.9%translatesintoarelativeperormanceo7.9%,dividetheportolioperormanceo132.7bytheindexyearendfgureo122.9andsubtractone.
PerforManCe aTTrIbuTIon anD InesTMenT ChanGes
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 11
Top Ten and Bottom Ten Contributors to PerformanceFortheyearended30June2010
ConTrIbuTors To PerforManCe anD ThIrTy LarGesT equITy hoLDInGs
2010 2009
Value % of Value
Name Region Business £’000 total assets £’000
LevelEMayaFund UnitedKingdom Artifcialintelligencebasedtradingplatorm 2,473 4.5 –
OGXPetróleoe GásParticipacoes EmergingMarkets Oilandgasexplorationandproduction–Brazil 1,545 2.8 618
EldoradoGold NorthAmerica Goldmining–Brazil,China,GreeceandTurkey 1,343 2.4 –
Kone ContinentalEurope Elevators 1,167 2.1 1,069
OceanWilsons UnitedKingdom Tugboatsandportterminals–Brazil 1,145 2.1 553
ChinaMerchantsBank EmergingMarkets Banking–China 1,137 2.0 707
BaillieGiordJapanese AsiaPacifc SmallerCompaniesFund includingJapan Investmentund 1,050 1.9 1,688
VisionOpportunity ChinaFund EmergingMarkets Investmentund–China 1,022 1.8 –
BaillieGiordDeveloped AsiaPacifc AsiaPacifcFund includingJapan Investmentund 1,013 1.8 2,037
Odontoprev EmergingMarkets Dentalhealthservices–Brazil 941 1.7 –
ReinetInvestmentsSCA ContinentalEurope Investmentholdingcompany 835 1.5 692
Seadrill ContinentalEurope Deepwateroilrigs 826 1.5 735
BetterCapital UnitedKingdom Fundinvestingindistressedbusinesses 810 1.5 –
Schindler ContinentalEurope Elevators 796 1.4 528
ASOS UnitedKingdom Onlineashionretailer 774 1.4 –
Essilor ContinentalEurope Ophthalmology 702 1.3 753
FalklandOilandGas UnitedKingdom Oilandgasexplorationandproduction –FalklandIslands 679 1.2 210
McDonalds NorthAmerica Fastoodrestaurantchain 678 1.2 279
IGGroup UnitedKingdom Spreadbetting 666 1.2 252
Healthspring NorthAmerica Medicare 665 1.2 –
JuridicaInvestments UnitedKingdom Fundolawsuits 664 1.2 398
MedcoHealthSolutions NorthAmerica Prescriptionmanagementandhealthinormation 662 1.2 499
MarineHarvest ContinentalEurope Salmonarming 636 1.1 407
Novozymes ContinentalEurope Enzymeproducer 622 1.1 427
AtlasCopco ContinentalEurope Industrialcompressorsandminingequipment 621 1.1 381
Ctrip.comInternational EmergingMarkets Travelservices–China 603 1.1 337
TheBiotechGrowthTrust UnitedKingdom Biotechnologyinvestmenttrust 600 1.1 –
DragonOil EmergingMarkets Oilandgasexplorationandproduction –Turkmenistan 570 1.0 508
Naspers EmergingMarkets Mediacompany–SouthAricaandChina 563 1.0 398
Cetip EmergingMarkets Investmentservices–Brazil 558 1.0 –
26,366 47.4 13,476
Thirty Largest Equity Holdings
Top TenName Contribution (%)
AthenaDebtOpportunitiesFund 1.1OGXPetróleoeGásParticipacoes 1.0
ASOS 0.9
FalklandOilandGas 0.9
CQSRigFinanceFund 0.7
EldoradoGold 0.7
Seadrill 0.6
LevelEMayaFund 0.6
LloydsBankSaphir6.369%2015Perpetual 0.5
Kone 0.5
Bottom TenName Contribution (%)
MarfnInvestmentGroup (0.5)USTII1.75%15/01/2028 (0.5)
PantheonInternationalParticipationsULN (0.4)
SevanMarine (0.4)
Apple (0.4)
AlliedIrishbanks (0.3)
NationalBankoGreece (0.3)
Curis (0.3)
InspurInternational (0.3)
BasileaPharmaceutica (0.3)
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12 ANNUAL REPORT 2010
CLassIfICaTIon of InesTMenTs
Classication of Investments
*Equitiesincludeslimitedpartnerships,unittrusts,OEICs,SICAVsandconvertibleloannotesexpectedtoconverttoequity.
Continental North Asia Pacic Emerging 2010 2009UK Europe America incl. Japan Markets Total Total
Classication % % % % % % %
Equities*:Oilandgasproducers 1.6 0.5 0.4 – 4.7 7.2 8.0Oilequipment,servicesanddistribution 1.1 1.8 – – – 2.9 5.0Alternativeenergy – – – – 0.4 0.4 –
Oil and Gas 2.7 2.3 0.4 – 5.1 10.5 13.0
Forestryandpaper – – 0.7 – – 0.7 –Industrialmetals – – – – – – 0.5Mining – – 2.9 – 1.1 4.0 1.1
Basic Materials – – 3.6 – 1.1 4.7 1.6
Constructionandmaterials – 0.6 – – 0.7 1.3 1.4Generalindustrials – 0.6 – – – 0.6 –Electronicandelectricalequipment 0.7 – – – – 0.7 1.3Industrialengineering – 4.6 0.5 – – 5.1 5.3Industrialtransportation 2.1 – – – 2.2 4.3 2.4
Supportservices – – – – – – 0.7Industrials 2.8 5.8 0.5 – 2.9 12.0 11.1
Beverages – 0.5 – – 0.8 1.3 1.4Foodproducers – 1.1 – – – 1.1 3.1Leisuregoods – – – 0.4 0.7 1.1 1.2Personalgoods – 0.7 – – – 0.7 0.9Tobacco 0.8 – 0.9 – – 1.7 1.9
Consumer Goods 0.8 2.3 0.9 0.4 1.5 5.9 8.5
Healthcareequipmentandservices – 2.5 3.0 – 1.7 7.2 3.7Pharmaceuticalsandbiotechnology 0.6 2.2 2.5 – – 5.3 2.1
Health Care 0.6 4.7 5.5 – 1.7 12.5 5.8
Foodanddrugretailers – – – – 1.0 1.0 2.0Generalretailers 1.4 – 1.3 – 0.5 3.2 2.0
Media – – – – 1.0 1.0 1.0Travelandleisure – 0.7 1.2 0.7 1.1 3.7 1.5
Consumer Services 1.4 0.7 2.5 0.7 3.6 8.9 6.5
Fixedlinetelecommunications – – – – 0.6 0.6 –Mobiletelecommunications – – – – 0.5 0.5 1.4
Telecommunications – – – – 1.1 1.1 1.4
Electricity 0.6 – – – – 0.6 –Gas,waterandmultiutilities 0.5 – – – – 0.5 –
Utilities 1.1 – – – – 1.1 –
Banks – 0.4 0.8 – 4.7 5.9 4.5Insurance – – 0.6 – – 0.6 2.2Realestate – 0.7 – 0.5 1.0 2.2 1.8Generalfnancial – 0.9 1.7 – 1.7 4.3 3.8
Investmentcompanies 10.7 1.9 0.7 4.1 3.4 20.8 18.4Financials 10.7 3.9 3.8 4.6 10.8 33.8 30.7
Sotwareandcomputerservices 0.7 – 0.7 0.6 – 2.0 1.4Technologyhardwareandequipment – – 0.6 – 0.7 1.3 1.8
Technology 0.7 – 1.3 0.6 0.7 3.3 3.2
TotalEquities* 20.8 19.7 18.5 6.3 28.5 93.8
TotalEquities*–2009 7.7 22.1 19.6 11.4 21.0 – 81.8Bonds 1.6 0.2 2.9 – – 4.7 17.8Net Liquid Assets 0.3 0.4 0.1 0.1 0.6 1.5 0.4
TotalAssets 22.7 20.3 21.5 6.4 29.1 100.0(beoredeductionobankloans)
TotalAssets–2009 10.4 25.0 29.3 14.3 21.0 – 100.0 Bank Loans (3.6) (2.0) – (4.0) – (9.6) (4.6)
Shareholders’Funds 19.1 18.3 21.5 2.4 29.1 90.4Shareholders’Funds–2009 10.4 25.0 29.3 9.7 21.0 95.4
Numberofequityinvestments* 19 24 26 7 33 109 91
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 13
1 Marine Harvest
The world’s largest sh farmingcompany.
Picture courtesy of Marine Harvest.
(The value of our holding in MarineHarvest is £407,000)
ManaGers’ PorTfoLIo reIeW
Managers’ Portfolio Review
The portfolio
Bondshaveshrunkto5%oassetsollowingnetsales.Ourhurricanebond,Vega,appreciatedaswehadhopedandhadlittleurtherupsidetooer.Lloyds’BankSaphirnoncumulativepreerredshareswereconvertedto‘co-co’bonds,resultinginatreblingovalueromdepressedlevelsandasubsequentsale.CQSRigFinanceFund’sNAVroseromminus3pandsuspensionto25p;wequadrupledourholdingintheshareswhentheyre-quotedollowingnegotiationswiththeirbankersoninteresttermsanddebtcovenants.Athena,the
distressedsecuritiseddebtund,sawitsNAVrise70%orsoromatrough(atwhichweaddedtotheholding)asseniortranchesosecuritiseddebtpoolshaveaccumulatedadominantshareocashowsintothesevehiclesandconfdencehasreturnedamodicumoliquiditytothismarket.
Largest equity holdings
Level E Maya Fund
Thisisanewinvestmentwhichhastwoparts.TheholdingintheundrepresentsourcontributiontoseedingaundthatusesalgorithmictradingstrategiesderivedromtheworkoanEdinburghUniversitybasedteamoexpertsinartifcialintelligence.Thesecondelement
isanoptionbasedontheundinvestmentgrantingtheCompanytherighttoacquire6.25%otheunderlyingintellectualpropertyortechnologycompanyanditssisterassetmanagementcompany.
Theoptionisorafveyearterm,orafxedshareinthecapitalobothcompaniesasatthetimeoexercise,andatafxedexercisepriceo$1.25m.WepaidnothingortheoptionanditisconsequentlyheldatazerovaluationatthisearlystageotheLevelEcompanies’lives.
OGX Petróleo e Gás Participacoes
ABrazilianexplorationandproductioncompanyholdingvaluableoshoreacreageamiliarromlastyear’sreport.TheCompanyincreaseditspositionovertheyear,andthesharepricehasalso
appreciatedalongsideavourablenews.AstrategyoemployingtheretiringseniorgeologistatPetrobras,thenationaloilgiant,appearstobepayingohandsomelywithan89%drillingsuccessratetodateinthoseareaswherethegrouphaswonbids.
Kone
Theelevatorbusinessisastable,disciplined,airlyastgrowingindustrywithhighlyattractivefnancialcharacteristics.Maintenance,serviceandupgraderevenuesprovideacoresourceostrengthandrecurrence.Globalindustrialisationandurbanisationtrendsdriveunderlyingdemandornewlits.Strongcashowsdeployedinacquiringsub-scalemaintenanceportoliosascontiguousin-fllstothecorebusinessareanotherworthwhileeature.Signifcantamily
ownershipandinvolvementoersthebeneftolongtermalignmentopurposebetweencontrollersandshareholders.Schindler,anothersignifcantholdingortheCompany,enjoysthesamestrengths.Bothhavebeenandremaincorelongtermholdings.
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14 ANNUAL REPORT 2010
ManaGers’ PorTfoLIo reIeW
1 Pride International
Owner of primarily semi-submersibledrilling rigs.
Picture courtesy of Pride International.
(The value of our holding in PrideInternational is £636,000)
Ocean Wilsons
Thevaluationderivesromtwoparts.First,theunderlyingBrazilianmarinebusiness–atraditionalranchiseintugboats,containerterminalsandplatormsupplyvessels.Second,aninvestmentportoliowithastronglongrunrecordorealtotalreturns.Bothelementshavedoneverywellonaverageovermanyyearsnow.Thewholeremainsavailableinthestockmarketataverylargediscounttothepublicmarketvalueoitstwohalves.
Eldorado Gold
Thisisalowcostgoldproducerwithexperienced,successul,downtoearthmanagement,assetsinChina,TurkeyandBrazilandwhichoersrisingproductionandgrowthpotentialalongsideitsunderlyingexposuretogolditsel.Goldisointerestseparatelyinrelationtotheriskoscenarios4and5mentionedintheChairman’sStatement.
China Merchants Bank
MarketshaveexpendedconsiderableenergyworryingabouttheChinesebankingsystem.Thiswassopriortoandduringtheunanticipatedcollapseoourownandappearstoremainthecasestill.Weareimpressedbythecombinationostrongandrationaldemandorcreditromthebanks’customers,stillmorebythepotentialoruturesimilardemandandalsobythestrengthoits
balancesheetcombinedwithstrong,eectiveregulationandsystemicallyhighmargins.
Vision Opportunity China Fund
VOCprovidesgrowthcapitaltoasmallnumberorapidlygrowing,largelyunlistedandamilycontrolledChineseconcerns.Theseoperateacrossabreadthodomesticindustries.Inreturn,VOCattainssignifcantequityinthesebusinessesandhelpsthemtolistontheNASDAQmarketintheUS.Followingthisprimarycycle,theund’scapitalisthensteadilyredeployedinareshroundounlisted,immaturegrowthbusinesses.Thisprocesshasbeenbothoperationallysuccessulorthefrmsandhighlyrewardingortheund,withNAV
doublinginthefrsttwoyearssincelistinginlate2007versusadeclineosome30%inthemainChinesestockindices.
Odontoprev
ThisistheleadingBraziliandentalplancompanythatacquireditsnearestcompetitorattheendo2009.Theresultinggrouphasadominantmarketpositioninahighlyimmatureandunder-penetratedindustryinayoungcountrywithrapidlygrowingincomes.Dentalplansquicklybecomehighmargin,cashgenerativeoperationsicustomerserviceandretentioniscemented,andOdontoprevhasundertakentoreturnnearlyallproftstoshareholders.Thecompanyshouldhavenodifcultyinundingitseldespitethishighdividendpayoutwhilecontinuingtogrowrapidly.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 15
ManaGers’ PorTfoLIo reIeW
Seadrill
RecenteventsintheGuloMexicohavethrowntheworldodeepwaterdrillingintoturmoil.Seadrillhasabrandnewindustry-leadingeet,aportolioocontractstermedoutto2013,asecurestreamocashowsthereoreandadoubledigitdividendyield.Mostlikely,atsomepoint,therewillbeanopportunitytourtherconsolidateitsindustry.Weexpectthatdeepwateroilrecovery, whetheroshoreBrazil,oshoreWestArica,GuloMexicoorromextremeregionsNorthandSouth,willormacriticalelementinmeetingenergy
demandsoverthecomingtwentyyearsorsodespitegrowingincentivestoaccelerateresearchintoalternativeuels.
Reinet
ThisistheRupertamilyholdingcompany,spunoutoRichemontandcomprisedoasubstantialholdinginBATandinvestmentsmaderomcashandthedividendstreamromthoseBATshares.Havingappreciatedsignifcantlyromspinout,itstillstandsatamoderatediscounttoitsNAVandmainlydependsupontheskillwithwhichinvestmentsaremadeoranyutureoutsizereturns.TheacquisitionoorwardcommitmentsromadistressedLehmanprivateequityundbodeswellinthisregardwebelieve.
Better Capital
Anopportunisticundpioneered,managedandinvestedinby JonMoulton,whosespecialismisinturningaroundbankruptordistressedcompanies.Regrettably,weanticipatetherewillbemuchworktobedoneinthisareaovercomingyearsintheUK.
1 Marvel Entertainment
The world’s largest comic bookpublisher, Marvel has begun to produceits own lms after several years oflicensing out lm rights.
Picture courtesy of Marvel Entertainment.
(The value of our holding in MarvelEntertainment is £303,000)
2 ALL America Latina Logistica
ALL operates railway concessions inSouthern Brazil and Argentina.
Picture courtesy of ALL America LatinaLogistica.
(The value of our holding in ALL AmericaLatina Logistica is £231,000)
ASOS
Thisisanonlineclothesretailer,thenameowhichstandsorAs-Seen-On-Screen,andthathasanenthusiasticandrapidlygrowingbaseocustomersintheUK.Thebusinessmodel,whichshouldtransertoothergeographies,issomewherebetweenAmazonandZaraandwearetakenbothbyitsprospectsanditsrecentabilitytotradeverysuccessullyduringadifcultperiodorUKconsumersandbricksandmortarretailers.
Healthspring
Averytightlymanaged,lowcostAmericanproviderohealthinsuranceservices.ThevaluationhadbeenheldbackbygloomconcerningPresidentObama’shealthcarerhetoricwhenwestartedbuyingtheshares.WeeelthatHealthspring,likeanotherlargeholding,Medco,ismorepartothecostandservicesolutionthanpartotheproblem.Despitetheincompetenceoreormssoar,wemightexpecttoseethisedgetranslateintoworthwhileearningsgrowth.
Falkland Oil and Gas
WeinvestedinthiswildcatoilexplorerwithinterestingacreageintheSouthEastFalklandsbasinandaverystrongpartnerinBHP.Thesharesperormedverystronglyintherunuptothedrilling
campaignandwedisinvestedprogressivelyintothisstrength.Ourintentionhadalwaysbeentotrytoremoveourinitialstakewhilstleavingaremainingholdingtorunthroughthedrillingcampaign.Asithasturnedout,wehavemanagedratherbetterthanthat.
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16 ANNUAL REPORT 2010
FollowingtheinitialToroaresults,however,whichweredisappointing, weeltthattheoptionvalueascribedtoLoligo,theremainingprospect,wasover-estimatedandhavesoldthesmallbalanceoourholdings,stillataproftthoughatalesserone.
Transactions
Thereareaewclearthematicinuencesthoughmostideasareveryspecifctotheirownuniqueprospects.TheCompanybuiltupabasketobiotechholdingsorreasonscoveredintheinterimreport.
ThethreeinternalBaillieGiordOEICshavesteadilybeensolddownasindividualideashavecomeintoreplacethem.Wellknowncompanieshavebeenreplacedbylesserknownones.Overthepastseveralyears,asdiscussedbytheChairman,theportoliohasprogressivelysoughtoutinvestmentstobeneftromcontinuingepochalshitsineconomicpower.SaversinpopulousdevelopingnationsareachievinghigherlivingstandardsandproductivityleapsevenasconsumersintheWestarealteringalongwiththeirbanksandgovernmentsollowingmanyyearsodebtaccumulation.
Someexamplesonewholdingsduringtheyearareasollows.CetipcontrolstheBrazilianpaymentssystem,MIPShasasystem-on-a-chipdesignranchisethatmaywellderivegreatopportunityrom
anexponentialgrowthinsmartphoneusage,Greenlight Capital RedependsupontheinvestmentskilloitsounderDavidEinhornandOSXupontheentrepreneurialskilloitsounderEikeBatistaandthe
needsohisrelatedexplorationandproductioncompanyOGX. Jain IrrigationisaMalthusianinvestmentinsustainablelongtermproductivitygrowthorinnumerablearmersacrosstheglobeoperatingonwaterscarceland.Mundra,India’sleadingport,expressesanoptimismoverwhereIndiantradeislikelytoheadovercomingyears.ThesameappliestoSantoswithregardtoBraziliantrade,inparticularthelikelygrowthoimportsromverylowlevelstoday.CFAOistheleadingdistributoroconsumergoodsacrossNorthernArica.Dialightisameansocapturingtheattractive
prospectsorandefcienciesoLEDlightingovercomingyears.DNOand,morerecently,Gulf Keystone PetroleumarebothrelatedtotheopeningupoKurdistan’soilbasins. Cryo Saveisdesignedtoallowparentstooertheirchildrenthechancetobeneftromadvancesinmedicalsciencebypreservingtheirumbilicalstemcells.VODoneexpectstobeabletotapintoamainlandChineseadoptionomobilelotterygames.
Portolioturnoverremainsaroundlastyear’shighlevelandabovewhattheManagerconsiderstobethelikelylongtermaverageobetweenafthandathird.Followingadramaticreboundinmarketsandintermittentperiodsoheightenedvolatilityitisperhapsnotsurprisingthatopportunitieshavearisenand/orbeenrealised.Wehopethatoursuccesseswillcontinuetobemorematerialinscale
thanourmistakesandthatwecancontinuetoproduceattractivelongtermrealtotalreturns.Uncertaintyovertheunderpinningsorecoveryremainsornowbothachallengeandanopportunity.
ManaGers’ PorTfoLIo reIeW
1 Kellogg
Leading cereal and snack producer.
Picture courtesy of Kellogg.
(The value of our holding in Kellogg is
£280,000)
2 Impala Platinum Holdings
South Africa’s second largest producerof platinum group metals.
Picture courtesy of Impala PlatinumHoldings.
(The value of our holding in ImpalaPlatinum Holdings is £335,000)
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 17
LIsT of InesTMenTs as aT 30 June 2010
Value
Classication Name Business £’000 %
UnitedKingdom
Oilandgasproducers Borders&SouthernPetroleum Oilandgasexplorationandproduction –FalklandIslands 223 FalklandOilandGas Oilandgasexplorationandproduction –FalklandIslands 679
902 1.6
Oilequipment,services anddistribution Petroac Engineeringservices–MiddleEast 296 Wellstream Pipelineproducts 314
610 1.1
Electronicandelectricalequipment Dialight LEDlighting 384 0.7
Industrialtransportation OceanWilsons Tugboats,platormsupplyvesselsand
containerhandling–Brazil 1,145 2.1Tobacco ImperialTobacco Tobacco 453 0.8
Pharmaceuticalsandbiotechnology Genus Livestockarmingproducts 357 0.6
Generalretailers ASOS Onlineashionretailer 774 1.4
Electricity DraxGroup Electricitygeneration 325 0.6
Investmentcompanies AlternativeAssetOpportunities Liesettlementsinvestmenttrust 251 BetterCapital Fundinvestingindistressedbusinesses 810 BurordCapital Fundolawsuits 370 IGGroup Spreadbetting 666 JuridicaInvestments Fundolawsuits 664 LevelEMayaFund Artifcialintelligencebasedalgorithmictrading 2,473 TheBiotechGrowthTrust Biotechnologyinvestmenttrust 600
5,834 10.7Sotwareandcomputerservices AutonomyCorporation Searchandprocessingotext,audioandvideo 365 0.7
Gas,waterandmultiutilities IslandGasResources Gasdistribution 292 0.5
Total United Kingdom Equities 11,441 20.8
ContinentalEurope
Oilandgasproducers DNOInternational Oilandgasexplorationandproduction–Kurdistan 267 0.5
Oilequipment,services anddistribution Seadrill Deepwateroilrigs 826 SevanMarine Engineeringservices 178
1,004 1.8
Constructionandmaterials Geberit Plumbingsystems 312 0.6Generalindustrials CFAO SpecialisedconsumerdistributioninArica 314 0.6
Industrialengineering AtlasCopco Industrialcompressorsandminingequipment 621
Kone Elevators 1,167 Schindler Elevators 796
2,584 4.6
Beverages Anheuser-BuschInbev Globalbrewer 283 0.5
Foodproducers MarineHarvest Salmonarming 636 1.1
Personalgoods Richemont Luxurygoods 404 0.7
Healthcareequipmentandservices CryoSaveGroup Stemcellbank 360 Essilor Ophthalmology 702 Getinge Healthcareequipment 334
1,396 2.5
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18 ANNUAL REPORT 2010
LIsT of InesTMenTs
Value
Classication Name Business £’000 %
ContinentalEurope(continued)
Pharmaceuticalsandbiotechnology BasileaPharmaceutica Pharmaceuticals 266 Novozymes Enzymeproducer 622 Roche Pharmaceuticalsanddiagnostics 351
1,239 2.2
Travelandleisure Ryanair Airline 411 0.7
Banks AlliedIrishBanks Bank–Ireland 196 0.4
Realestate AtriumEuropeanRealEstate Operatinganddevelopingshoppingcentres 383 0.7
Generalfnancial MarfnInvestmentGroup Investmentholdingcompany–Greece 414 Marfn5%19/03/2015CV Investmentholdingcompany–Greece 97
511 0.9
Investmentcompanies CorporaciónFinancieraAlba Investmentholdingcompany–Spain 213
ReinetInvestmentsSCA Investmentholdingcompany–Luxembourg 835 1,048 1.9
Total Continental European Equities 10,988 19.7
NorthAmerica
Oilandgasproducers PrideInternational Oshoredrillingcontractor 211 0.4
Mining EldoradoGold Goldmining–Brazil,China,GreeceandTurkey 1,343 PolarisMinerals Commercialaggregatequarries–Canada 276
1,619 2.9
Forestryandpaper Sino-Forest Commercialorestplantationoperator–China 370 0.7
Industrialengineering FirstSolar Manuacturerophotovoltaicsolarmodules 259 0.5
Tobacco Altria Tobaccoandood–US 144 PhilipMorrisInternational Tobacco–worldexUS 329
473 0.9
Healthcareequipmentandservices Healthspring Medicare 665 IntuitiveSurgical Roboticminimallyinvasivesurgicaltools 337 MedcoHealthSolutions Prescriptionmanagementandhealthinormation 662
1,664 3.0
Pharmaceuticalsandbiotechnology Celgene Biopharmaceuticals 268
Curis Biopharmaceuticaldrugdevelopment 199 Genzyme Biopharmaceuticals 231 GileadSciences Biopharmaceuticals 213 SeattleGenetics Biopharmaceuticals 293
VandaPharmaceuticals Pharmacogenetics 188 1,392 2.5
Generalretailers O’ReillyAutomotive Automotivepartsstores 257 TJXCompanies Discountclothingandhomewarestores 437
694 1.3
Travelandleisure McDonalds Fastoodrestaurantchain 678 1.2
Banks Capitalsource Caliornianbank 437 0.8
Insurance BerkshireHathaway Insuranceandinvestmentholdingcompany 359 0.6
Generalfnancial GoldmanSachsGroup Investmentbank 372 GreenlightCapitalRe Reinsurancecompany 540
912 1.7
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 19
Value
Classication Name Business £’000 %
LIsT of InesTMenTs
NorthAmerica(continued)
Investmentcompanies FairaxFinancial Propertyandcasualtyinsuranceand investmentholdingcompany 416 0.7
Sotwareandcomputerservices SoleraHoldings Sotwareservicesorautomobileclaimsprocessing 416 0.7
Technologyhardwareandequipment MIPSTechnologies Embeddedsemiconductors 322 0.6
Total North American Equities 10,222 18.5
AsiaPacicincludingJapan
Leisuregoods FunaiElectric ManuactureoLCD,wirelessand plasmamonitors–Japan 213 0.4
Travelandleisure SankyoGunma ManuactureandsaleoPachinkoand slotmachines–Japan 404 0.7
Realestate ShuiOnLand Propertycompany–China 265 0.5
Investmentcompanies BaillieGiordDevelopedAsia PacifcFund Investmentund 1,013 BaillieGiordJapanese
SmallerCompaniesFund Investmentund 1,050 KenedixRealtyInvestment Realestateinvestmentund–Japan 216
2,279 4.1
Sotwareandcomputerservices VODone Onlinemedia,gamingandlottery–China 318 0.6
Total Asia Pacic including Japan Equities 3,479 6.3
OtherEmergingMarkets
Oilandgasproducers DragonOil Oilandgasexplorationandproduction –Turkmenistan 570 GulKeystonePetroleum Oilandgasexplorationandproduction –Kurdistan 248 KazMunaiGasExploration Oilandgasexplorationandproduction –Kazakhstan 283 OGXPetróleoeGásParticipacoesOilandgasexplorationandproduction –Brazil 1,545
2,646 4.7
Alternativeenergy GushanEnvironmentalEnergy Biodieselproduction–China 232 0.4
Mining ImpalaPlatinumHoldings Platinumminingcompany 392 KenmareResources Naturalresourcemining–Mozambique 206
598 1.1Constructionandmaterials JainIrrigationSystems Micro-irrigation–India 379 0.7
Industrialtransportation MundraPortandSEZ Privateport–India 290 OSXBrasil Shipyard–Brazil 471 SantosBrasilParticipacoes Containerhandlingandlogisticsservices–Brazil 525
1,286 2.2
Beverages AnadoluEes Beerandsotdrinks–Turkey 424 0.8
Leisuregoods LGElectronics Electronicgoods 380 0.7
Healthcareequipmentandservices Odontoprev Dentalhealthservices–Brazil 941 1.7
Foodanddrugretailers BIMBirlesikMagazalar Discountoodstores–Turkey 530 1.0
Generalretailers Walmex Generalretailer–Mexico 281 0.5
Media Naspers Mediacompany–SouthAricaandChina 563 1.0Travelandleisure Ctrip.comInternational Travelservices–China 603 1.1
Mobiletelecommunications MTNGroup Mobiletelecommunication–AricaandMiddleEast 299 0.5
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20 ANNUAL REPORT 2010
OtherEmergingMarkets(continued)
Banks ChinaConstructionBank Bank–China 475 ChinaMerchantsBank Bank–China 1,137 ItauUnibancoBancoMultiplo Bank–Brazil 445 TurkiyeGarantiBankasi Bank–Turkey 533
2,590 4.7
Realestate ChinaVankeCompany Residentialrealestatedeveloper–China 302 RenheCommercialHoldings Undergroundshoppingmall–China 275
577 1.0
Fixedlinetelecommunications TelekomunikacjaPolska Diversifedtelecommunicationservices–Poland 320 0.6
Generalfnancial BM&FBovespa Securitiesexchangeandposttradeservices–Brazil 391 Cetip Investmentservices–Brazil 558
949 1.7Investmentcompanies BaillieGiordGreaterChinaFund Investmentund–China 331 GPInvestments PrivateequityundmanagerinvestinginLatinAmerica 253 VietnamEnterpriseInvestments Investmentund–Vietnam 261 VisionOpportunityChinaFund Investmentund–China 1,022
1,867 3.4
Technologyhardwareandequipment MediaTek Semiconductormanuacturer–Taiwan 396 0.7
Total Other Emerging Markets Equities 15,861 28.5
Total Equity Investments 51,991 93.8
FixedInterest
Sterlingdenominated CQSRigFinanceFund Oilrigbonds 563 * PantheonInternational Participationsloannotes Privateequityundloannotes 335
898 1.6
Eurodenominated SemperFinanceFRNSLP2017 EastGermanhousingassociationunding 112 0.2
USdollardenominated AthenaDebtOpportunitiesFund Distresseddebtund 1,303 CTCDO2005-1A Mortgage-backedsecurity 143 TamweelFundingCV 4.31%23/01/13 Dubaipropertybonds 139
1,585 2.9
Total Fixed Interest 2,595 4.7
Total Investments 54,586 98.5
Net Liquid Assets 823 1.5
Total Assets at Fair Value 55,409 100.0
(beoredeductionobankloans)
*denotesunlistedsecurity
LIsT of InesTMenTs
Value
Classication Name Business £’000 %
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 21
TheDirectorspresenttheirReporttogetherwiththefnancialstatementsotheCompanyortheyearto30June2010.
Business Review
Business and Status
TheCompanyisaninvestmentcompanywithinthemeaningosection833otheCompaniesAct2006.
TheCompanycarriesonbusinessasaninvestmenttrust.Itwasapprovedasaninvestmenttrustundersection842otheIncomeandCorporationTaxesAct1988ortheyearended30June2009,subjecttomattersthatmayariseromanysubsequentenquirybyHMRevenue&CustomsintotheCompany’staxreturn.Inthe
opinionotheDirectors,theCompanyhassubsequentlyconducteditsaairssoastoenableittoseekapprovalundersection1158otheCorporationTaxesAct2010.
Objective
TheCompany’sobjectiveistoachievecapitalandincomegrowthbyinvestingonaworldwidebasis.
Investment Policy
MidWyndseekstomeetitsobjectiveoachievingcapitalandincomegrowththroughinvestmentprincipallyinaportolioointernationalquotedequities.Investmentsareselectedortheirinclusionwithintheportoliosolelyonthebasisothestrengthotheinvestmentcase.
TheCompanyispreparedtomovereelybetweendierentmarkets,sectors,industries,marketcapitalisationsandassetclassesasinvestmentopportunitiesdictate.TheproportionotheportolioinvestedinUKcompanieswillnotnormallyexceed25%,andgeographicalandsectoralexposuresarereportedto,andmonitoredby,theBoard
inordertoensurethattheportolioprovidesadequatediversifcation.Thetotalnumberoinvestmentswilltypicallybebetween50and150.
ExposurestoindividualentitiesaremonitoredbytheBoard.Onacquisition,noholdingshallexceed15%otheportolio.Investmentmayalsobemadeinunds(openandclosed-ended)includingthosemanagedbyBaillieGiord&Co.ThemaximumpermittedinvestmentinUKlistedinvestmentcompaniesinaggregateis15%ogrossassets.Assetsotherthanequitieswillbepurchasedromtimetotimeincludingbutnotlimitedtofxedinterestholdings,unquotedsecuritiesandderivatives.SubjecttopriorBoardapproval,theCompanymayusederivativesorinvestmentpurposesororefcientportoliomanagement(includingreducing,transerringor
eliminatinginvestmentriskinitsinvestmentsandprotectionagainstcurrencyrisk).
ItisanaimotheTrusttoprovidedividendgrowthovertime,althoughthisissubordinatetotheprimaryaimomaximisingtotalreturnstoshareholders.
Whilethereisacomparativeindexorthepurposeomeasuringperormance,noattentionispaidtothecompositionothisindexwhenconstructingtheportolioandthecompositionotheportolioislikelytovarysubstantiallyromthatotheindex.Alongtermviewistakenandtheremaybeperiodswhenthenetassetvaluepersharedeclinesbothinabsolutetermsandrelativetothecomparativeindex.Thenumberoindividualholdingswillvaryovertimeand
theportolioismanagedonaglobalbasisratherthanasaseriesoregionalsub-portolios.
Borrowingsareinvestedinequityandothermarketsasconsideredtobeappropriateoninvestmentgrounds.ThelevelogearingisdiscussedbytheBoardandManagersateveryBoardmeeting.
Directors’ Report
DIreCTors’ rePorT
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22 ANNUAL REPORT 2010
DIreCTors’ rePorT
Theportionoborrowingswhichisnotinvestedinequitiesmaybe
investedinfxedinterestorotherliquidsecurities.ExceptinexceptionalcircumstancestheBoardwillnottakeoutadditionalborrowingsi,atthetimeoborrowing,thiswouldtaketheleveloeectivegearingtoequitiesbeyond130%.Equityexposurewill,onoccasions,bebelow100%oshareholders’unds.
DetailsoinvestmentstrategyandactivitythisyearcanbeoundintheChairman’sStatementonpages4to6andtheManagers’Reviewonpages13to16.
Discount
TheBoardrecognisesthatitisinthelongterminterestsoshareholderstomanagediscountvolatilityandbelievesthattheprimedriverodiscountsoverthelongertermisperormance.TheBoarddoesnot
haveaprecisediscounttargetatwhichshareswillbeboughtbackasitbelievesthattheannouncementospecifctargetsislikelytohinderratherthanhelpthesuccessulexecutionoabuybackpolicy.FuturebuybackswillbeconsideredprimarilybyreerencetotheCompany’sdiscountrelativetoitspeers.DuringtheyeartheCompanyboughtback65,000ordinaryshareswithanominalvalueo£16,250atatotalcosto£616,000.
Performance
AteachBoardmeeting,theDirectorsconsideranumberoperormancemeasurestoassesstheCompany’ssuccessinachievingitsobjectives.
Thekeyperormanceindicators(KPIs)usedtomeasuretheprogress
andperormanceotheCompanyovertimeareestablishedindustrymeasuresandareasollows:
•themovementinnetassetvalueperordinarysharecomparedtotheFTSEWorldIndex;
•themovementintheshareprice;
•thediscount;
•thetotalexpenseratio;and
•dividendpershare.
Theone,fveandtenyearrecordsortheKPIscanbeoundonpages2,3and9respectively.
Results and Dividends
Thenetassetvaluepershare(aterdeductingborrowingsatairvalue)increasedby29.8%duringtheyear,comparedtoanincreaseinthecomparativeindexo19.9%.Thediscountdecreasedrom13.4%to7.3%andthetotalexpenseratiowas0.87%.
TheBoardrecommendsafnaldividendo9.0pperordinarysharewhich,togetherwiththeinterimalreadypaid,makesatotalo15.5portheyear,anincreaseo3.3%comparedwith15.0porthepreviousyear.
Iapproved,therecommendedfnaldividendontheordinaryshareswillbepaidon7October2010toshareholdersontheregisteratthecloseobusinesson10September2010.Theex-dividenddate
is8September2010.TheCompany’sRegistraroersaDividendReinvestmentPlan(seepage56)andthefnaldateorreceiptoelectionsorthisdividendis16September2010.
Borrowings
DuringtheyeartheCompanydrewdown€1,320,000undertheUS$5millionmulti-currencyacilitywithLloydsTSBScotland,whichexpireson27February2012,and£2,000,000underaone-yearacilitywithLloydsTSBScotland,whichexpireson27August2010.
Review of the Year and Future Trends
AreviewothemaineaturesotheyearandtheinvestmentoutlookiscontainedintheChairman’sStatementandtheManagers’Reviewonpages4to6and13to16respectively.
Principal Risks and Uncertainties
TheCompany’sassetsconsistmainlyolistedsecuritiesanditsprincipalrisksarethereoremarketrelatedandincludemarketrisk(comprisingcurrencyrisk,interestrateriskandotherpricerisk),liquidityriskandcreditrisk.Anexplanationothoserisksandhowtheyaremanagediscontainedinnote21tothefnancialstatementsonpages47to52.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 23
DIreCTors’ rePorT
OtherrisksacedbytheCompanyincludetheollowing:
Regulatory risk–ailuretocomplywithapplicablelegalandregulatoryrequirementscouldleadtosuspensionotheCompany’sStockExchangeListing,fnancialpenaltiesoraqualifedauditreport.BreachoSection1158otheCorporationTaxesAct2010couldleadtotheCompanybeingsubjecttotaxoncapitalgains.BaillieGiord’sheadsoBusinessRisk&InternalAuditandRegulatoryRiskprovideregularreportstotheAuditCommitteeonBaillieGiord’smonitoringprogrammes.TheManagersmonitorinvestmentmovementsandtheleveloorecastincomeandexpendituretoensuretheprovisionsoSection1158arenotbreached.
Operational/Financial Risk–ailureotheManagers’accountingsystemsorthoseootherthirdpartyserviceproviderscouldlead
toaninabilitytoprovideaccuratereportingandmonitoringoramisappropriationoassets.TheBoardreviewstheManagers’ReportonInternalControlsandthereportsbyotherkeythirdpartyprovidersarereviewedbytheManagersonbehalotheBoard.
Discount Volatility–thediscountatwhichtheCompany’ssharestradecanwiden.TheBoardmonitorsthelevelodiscountandtheCompanyhasauthoritytobuybackitsownshares.
Gearing Risk–theCompanymayborrowmoneyorinvestmentpurposes(sometimesknownas‘gearing’).Itheinvestmentsallinvalue,anyborrowingswillmagniytheextentothisloss.Iborrowingacilitiesarenotrenewed,theCompanymayhavetosellinvestmentstorepayborrowings.
AllborrowingsrequirethepriorapprovalotheBoardandgearinglevelsarediscussedbytheBoardandManagersateverymeeting.ThemajorityotheCompany’sinvestmentsareinquotedsecuritiesthatarereadilyrealisable.
Employees
TheCompanyhasnoemployees.
Social and Community Issues
Asaninvestmenttrust,theCompanyhasnodirectsocialorcommunityresponsibilities.TheCompanyhoweverbelievesthatitisintheshareholders’intereststoconsiderenvironmental,socialandgovernanceactorswhenselectingandretaininginvestments.
DetailsotheCompany’spolicyonsociallyresponsibleinvestmentaresetoutonpage26.
Corporate Governance
TheBoardiscommittedtoachievinganddemonstratinghighstandardsoCorporateGovernance.ThisstatementoutlineshowtheprinciplesoTheCombinedCodeonCorporateGovernancepublishedin2008(the‘CombinedCode’)andotheAssociationoInvestmentCompanies(AIC)CodeoCorporateGovernancewereappliedthroughoutthefnancialyear.
Compliance
TheBoardconfrmsthattheCompanyhascompliedthroughoutthe yearunderreviewwiththeprovisionssetoutinSection1otheCombinedCodeexceptthattheChairmanotheBoardisalsotheSeniorIndependentDirector.DuetothesmallsizeandcompositionotheBoarditisnoteltnecessarytohaveaseparateSenior
IndependentDirector.ShareholdersmayaddresstheirconcernstoanyBoardmember.
TheBoardisotheopinionthattheCompanyhascompliedwiththerecommendationsotheAICCodeinallmaterialrespects.
The Board
TheBoardhasoverallresponsibilityortheCompany’saairs.Ithasanumberomattersreservedoritsapprovalincludingstrategy,investmentpolicy,currencyhedging,gearing,treasurymatters,dividendandcorporategovernancepolicy.TheBoardalsoreviewsthefnancialstatements,investmenttransactions,revenuebudgetsandperormance.FullandtimelyinormationisprovidedtotheBoardtoenabletheBoardtounctioneectivelyandtoallow
Directorstodischargetheirresponsibilities.
TheBoardcomprisesourDirectors,allowhomarenon-executive.TheexecutiveresponsibilityorinvestmentmanagementhasbeendelegatedtotheCompany’sManagersandSecretaries,BaillieGiord&Co,and,inthecontextoaBoardcomprisingentirelynon-executiveDirectors,thereisnochieexecutiveofcer.
TheDirectorsbelievethattheBoardhasabalanceoskillsandexperiencethatenablesittoprovideeectivestrategicleadershipandpropergovernanceotheCompany.InormationabouttheDirectors,includingtheirrelevantexperience,canbeoundonpage7.
ThereisanagreedprocedureorDirectorstoseekindependentproessionaladvice,inecessary,attheCompany’sexpense.
No. of ordinary
Name 25p shares held % of issue
BrewinDolphinSecuritiesLimited–Indirect 249,763 5.0MrMWMRMacPhee–Direct 228,730 4.6MrRRJBurns–Direct 162,500 3.3
–Indirect 23,900 0.5
TheaboveinormationhasbeenintimatedtotheCompanyasat3August2010.
Major Interests in Shares
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DIreCTors’ rePorT
Terms of Appointment
LetterswhichspeciythetermsoappointmentareissuedtonewDirectors.Thelettersoappointmentareavailableorinspectiononrequest.
UndertheprovisionsotheCompany’sArticlesoAssociation,aDirectorappointedduringtheyearisrequiredtoretireandseekelectionbyshareholdersatthenextAnnualGeneralMeeting.Directorsarerequiredtosubmitthemselvesorre-electionatleastonceeverythreeyearsandDirectorswhohaveservedormorethannineyearsoerthemselvesorre-electionannually.
Independence of Directors
AllotheDirectors,withtheexceptionoMrRRJBurns,areconsideredbytheBoardtobeindependentotheManagersandreeoany
businessorotherrelationshipwhichcouldintererewiththeexerciseotheirindependentjudgement.MrRRJBurnsisnotconsideredtobeindependentashewasaseniorpartneroBaillieGiord&Countilheretiredon30April2006.AsMrRRJBurnshasservedormorethannineyears,heoershimselorre-electionannually.
TheDirectorsrecognisetheimportanceosuccessionplanningorcompanyboardsandtheBoard’scompositionisreviewedannually.TheBoardisotheviewthatlengthoservicewillnotnecessarilycompromisetheindependenceorcontributionoDirectorsoaninvestmenttrustcompany,wherecontinuityandexperiencecanbeabenefttotheBoard.TheBoardconcurswiththeviewexpressedintheAICCodethatlongservingdirectorsshouldnotbeprevented
rombeingconsideredindependent.Followingormalperormanceevaluation,andnotwithstandingthatMrPMSBarronandMrMCNScotthavebothbeenDirectorsormorethannineyears,theBoardhasconcludedthatthisdoesnotaecttheirindependence.TheyarebothconsideredtobeindependentincharacterandjudgementandtheirskillsandexperienceaddsignifcantlytothestrengthotheBoard.TheBoardbelievesthatnoneotheothercommitmentsoMrPMSBarronandMrMCNScott,assetoutonpage7othisreport,intererewiththedischargeotheirdutiestotheCompanyandtheBoardissatisfedthattheyarecapableodevotingsufcienttimetotheCompany.MrPMSBarronandMrMCNScottoerthemselvesorre-electionannually.
Meetings
ThereisanannualcycleoBoardmeetingswhichisdesignedtoaddress,inasystematicway,overallstrategy,reviewoinvestmentpolicy,investmentperormance,marketing,revenuebudgets,dividendpolicyandcommunicationwithshareholders.TheBoardconsidersthatitmeetssufcientlyregularlytodischargeitsdutieseectively.ThetableaboveshowstheattendancerecordortheBoardandCommitteeMeetingsheldduringtheyear.AllotheDirectorsattendedtheAnnualGeneralMeeting.
Nomination Committee
TheNominationCommitteeconsistsothewholeBoardandtheChairmanotheBoardistheChairmanotheCommittee.TheCommitteemeetsonanannualbasisandatsuchothertimes
asmayberequired.TheCommitteehaswrittentermsoreerencewhichincludereviewingtheBoard,identiyingandnominatingnewcandidatesorappointmenttotheBoard,Boardappraisal,successionplanningandtraining.TheCommitteealsoconsiderswhetherDirectorsshouldberecommendedorre-electionbyshareholders.TheCommitteeisresponsibleorconsideringDirectors’potentialconictsointerestandormakingrecommendationstotheBoardonwhetherornotthepotentialconictsshouldbeauthorised.ThetermsoreerenceareavailableonrequestromtheCompanyandontheCompany’spageotheManagers’website:www.midwynd.co.uk .
Performance Evaluation
TheNominationCommitteemettoassesstheperormanceotheChairman,eachDirector,theBoardasawholeanditsCommittees,aterinvitingeachDirectorandtheChairmantoconsiderandrespondtoasetoquestions.TheappraisalotheChairmanwasledbyMrRRJBurns.
Theappraisalsconsidered,amongstothercriteria,thebalanceoskillsotheBoard,thecontributionoindividualDirectorsandtheoveralleectivenessotheBoardanditsCommittees.FollowingthisprocessitwasconcludedthattheperormanceoeachDirector,theChairman,theBoardanditsCommitteescontinuestobeeectiveandeachDirectorandtheChairmanremaincommittedtotheCompany.
AreviewotheChairman’sandtheotherDirectors’commitmentswascarriedoutandtheNominationCommitteeissatisfedthattheyarecapableodevotingsufcienttimetotheCompany.TherewerenosignifcantchangestotheChairman’sothercommitmentsduringtheyear.
Audit Nomination
Board Committee Committee
Number of meetings 5 2 1
PMSBarron 5 2 1†RRJBurns 5 2 1 RARNapier(appointed10August2009) 4 1 1 MCNScott 5 2 1
†MrRRJBurnsisnotamemberotheAuditCommitteebuthewasinattendanceatthemeetings.
Directors’ Attendance at Meetings
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 25
Induction and Training
NewDirectorsareprovidedwithaninductionprogrammewhichistailoredtotheparticularcircumstancesotheappointee.RegularbriefngsareprovidedonchangesinregulatoryrequirementsthatcouldaecttheCompanyandDirectors.Directorsreceiveotherrelevanttrainingasnecessary.
Remuneration
AsalltheDirectorsarenon-executive,theprovisionsotheCombinedCodeinrespectoDirectors’remunerationarenotrelevanttotheCompanyexcepttotheextentthattheyrelatespecifcallytonon-executiveDirectors.ConsequentlythereisnorequirementoraseparateRemunerationCommittee.Directors’eesareconsideredbytheBoardasawholewithinthelimitsapprovedbyshareholders.
TheCompany’spolicyonremunerationissetoutintheDirectors’RemunerationReportonpages29and30.
Internal Controls and Risk Management
TheDirectorsacknowledgetheirresponsibilityortheCompany’ssystemointernalcontrolsandorreviewingitseectiveness.Thesystemointernalcontrolsisdesignedtomanageratherthaneliminatetheriskoailuretoachievebusinessobjectivesandcanonlyprovidereasonablebutnotabsoluteassuranceagainstmaterialmisstatementorloss.
TheDirectorsconfrmthattheyhavereviewedtheeectivenessothesystemandtheyhaveproceduresinplacetoreviewitseectivenessonaregularbasis.Nosignifcantweaknesseswereidentifedinthe
yearunderreview.TheBoardconfrmsthatthereisanongoingprocessoridentiying,evaluatingandmanagingthesignifcantrisksacedbytheCompanyinaccordancewiththeguidance‘InternalControl:RevisedGuidanceorDirectorsontheCombinedCode’.
Thepracticalmeasurestoensurecompliancewithregulationandcompanylaw,andtoprovideeectiveandefcientoperationsandinvestmentmanagement,havebeendelegatedtotheManagersandSecretaries,BaillieGiord&Co,underthetermsotheManagementAgreement.TheBoardacknowledgesitsresponsibilitiestosuperviseandcontrolthedischargebytheManagersandSecretariesotheirobligations.
BaillieGiord&Cohavebeendelegatedresponsibilityorthedesign,implementationandmaintenanceocontrolpoliciesandprocedurestosaeguardtheassetsotheCompanyandtomanageitsaairsproperly.Thisresponsibilityalsoextendstomaintainingeectiveoperationalandcompliancecontrolsandriskmanagement.
TheBaillieGiord&CoheadsoBusinessRisk&InternalAuditand
RegulatoryRiskprovidetheBoardwithregularreportsonBaillieGiord&Co’smonitoringprogrammes.Thereportingproceduresorthesedepartmentsaredeinedandormalisedwithinaservicelevelagreement.BaillieGiord&CoconductanannualreviewotheirsystemointernalcontrolswhichisdocumentedwithinaninternalcontrolsreportwhichcomplieswithTechnicalReleaseAAF01/06–AssuranceReportsonInternalControlsoServiceOrganisationsmadeavailabletoThirdParties.ThisreportisindependentlyreviewedbyBaillieGiord&Co’sauditorsandacopyissubmittedtotheAuditCommittee.
TheCompany’sinvestmentsaresegregatedromthoseoBaillieGiord&CoandtheirotherclientsthroughtheappointmentoTheBankoNewYorkMellonasindependentcustodianotheCompany’sinvestments.
AdetailedriskmapispreparedwhichidentifesthesignifcantrisksacedbytheCompanyandthekeycontrolsemployedtomanagetheserisks.
TheseproceduresensurethatconsiderationisgivenregularlytothenatureandextentotherisksacingtheCompanyandthattheyarebeingactivelymonitored.Wherechangesinriskhavebeenidentifedduringtheyeartheyalsoprovideamechanismtoassesswhetherurtheractionisrequiredtomanagetherisksidentifed.TheBoardconfrmsthattheseprocedureshavebeeninplacethroughouttheCompany’sfnancialyearandcontinuetobeinplaceuptothedateoapprovalothisReport.
Internal Audit
TheAuditCommitteecarriesoutanannualreviewotheneedoraninternalauditunction.TheAuditCommitteecontinuestobelievethatthecomplianceandinternalcontrolsystemsandtheinternalauditunctioninplacewithintheManagersandSecretariesprovidesufcientassurancethatasoundsystemointernalcontrol,whichsaeguardsshareholders’investmentandtheCompany’sassets,ismaintained.Aninternalauditunction,specifctotheCompany,isthereoreconsideredunnecessary.
Accountability and Audit
TherespectiveresponsibilitiesotheDirectorsandtheAuditorsin
connectionwiththeFinancialStatementsaresetoutonpages31and32.
Nature Ordinary 25p shares held at
Name of interest 30 June 2010 30 June 2009
†PMSBarron Benefcial 38,234 38,200 RRJBurns Benefcial 162,500 162,500 Non-benefcialTrustee 23,900 23,900
†RARNapier Benefcial 49,565 – †MCNScott Benefcial 116,338 116,338 Non-benefcialTrustee 50,000 50,000
†MemberotheAuditCommittee.
Directors’ Interests
TheDirectorsattheyearend,andtheirinterestsintheCompany,wereasshownopposite.
TherehavebeennochangesintimatedintheseDirectors’interestsupto3August2010.
DIreCTors’ rePorT
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26 ANNUAL REPORT 2010
Going Concern
TheCompany’sprincipalrisksaremarketrelatedandincludemarketrisk,liquidityriskandcreditrisk.Anexplanationotheserisksandhow
theyaremanagediscontainedinnote21tothefnancialstatements.TheCompany’sassets,themajorityowhichareinvestmentsinquotedsecuritieswhicharereadilyrealisable,exceeditsliabilitiessignifcantly.AllborrowingsrequirethepriorapprovalotheBoard.GearinglevelsandcompliancewithborrowingcovenantsarereviewedbytheBoardonaregularbasis.Accordingly,thefnancialstatementshavebeenpreparedonthegoingconcernbasisasitistheDirectors’opinionthattheCompanywillcontinueinoperationalexistenceortheoreseeableuture.
Audit Committee
AnAuditCommitteehasbeenestablishedconsistingoalltheindependentnon-executiveDirectors.Itsauthorityanddutiesare
clearlydefnedwithinitswrittentermsoreerencewhichareavailableonrequestandontheCompany’spageotheManagers’website:www.midwynd.co.uk.MrRARNapierhassucceededMrMCNScottasChairmanotheAuditCommittee.TheCommittee’s responsibilitieswhichweredischargedduringtheyearinclude:
•monitoringandreviewingtheintegrityothehal-yearlyandannualfnancialstatementsandanyormalannouncementsrelatingtotheCompany’sfnancialperormance;
•reviewingstandardsointernalcontrolandriskmanagement;
•makingrecommendationstotheBoardinrelationtotheappointmentotheexternalauditorsandapprovingtheremunerationandtermsotheirengagement;
•developingandimplementingpolicyontheengagementotheexternalauditorstosupplynon-auditservices(therewerenonon-auditservicesduringtheyear);
•reviewingandmonitoringtheindependence,objectivityandeectivenessotheexternalauditors;
•reviewingthearrangementsinplacewithinBaillieGiord&Cowherebytheirstamay,inconfdence,raiseconcernsaboutpossibleimproprietiesinmattersofnancialreportingorothermattersinsoarastheymayaecttheCompany;
•reviewingannuallythetermsotheInvestmentManagementAgreement;and
•consideringannuallywhetherthereisaneedortheCompanytohaveitsowninternalauditunction.
Scott-MoncrieareengagedastheCompany’sAuditors.Havingconsideredtheexperienceandtenureotheauditpartnerandstaandthenatureandleveloservicesprovided,thecommitteeremainssatisfedwiththeAuditors’eectiveness.Theauditpartnersresponsibleortheauditarerotatedevery5yearsandthecurrentleadpartnerhasbeeninplaceor3years.TherearenocontractualobligationsrestrictingtheCompany’schoiceoexternalauditor.TheCommitteereceivesconfrmationromtheAuditorsthattheyhavecompliedwiththerelevantUKproessionalandregulatoryrequirementsonindependence.
Relations with Shareholders
TheBoardplacesgreatimportanceoncommunicationwithshareholders.TheCompany’sManagersmeetregularlywith
shareholdersandreportshareholders’viewstotheBoard.TheChairmanisavailabletomeetwithshareholdersasappropriate.ShareholderswishingtocommunicatewithanymembersotheBoardmaydosobywritingtothemattheaddressonthebackcover.
TheCompany’sAnnualGeneralMeetingprovidesaorumorcommunicationwithallshareholders.TheleveloproxieslodgedoreachresolutionisannouncedatthemeetingandispublishedontheCompany’spageotheManagers’website:www.midwynd.co.uk subsequenttothemeeting.ThenoticeperiodortheAnnualGeneralMeetingisatleasttwentyworkingdays.Shareholdersandpotentialinvestorsmayobtainup-to-dateinormationontheCompanyromtheManagers’website.
Voting Policy and Environmental, Social and Governance FactorsTheCompanyhasgivendiscretionaryvotingpowerstotheinvestmentmanagers,BaillieGiord&Co.TheManagersvoteagainstresolutionstheyconsidermaydamageshareholders’rightsoreconomicinterests.TheCompanybelievesthatitisintheshareholders’intereststoconsiderenvironmental,socialandgovernance(ESG)actorswhenselectingandretaininginvestmentsandhaveaskedtheManagerstotaketheseissuesintoaccount.TheManagersdonotexcludecompaniesromtheirinvestmentuniversepurelyonthegroundsoESGactorsbutadoptapositiveengagementapproachwherebymattersarediscussedwithmanagementwiththeaimoimprovingtherelevantpoliciesandmanagementsystemsandenablingtheManagerstoconsiderhow
ESGactorscouldimpactlongterminvestmentreturns.TheManagers’policyhasbeenreviewedandendorsedbytheBoard.
TheManagersaresignatoriestotheUnitedNationsPrinciplesorResponsibleInvestmentandtheCarbonDisclosureProject.
Conicts of Interest
EachDirectorsubmitsalistopotentialconictsointeresttotheNominationCommitteeonanannualbasis.TheCommitteeconsidersthesecareully,takingintoaccountthecircumstancessurroundingthem,andmakesarecommendationtotheBoardonwhetherornotthepotentialconictsshouldbeauthorised.Boardauthorisationisoraperiodooneyear.HavingconsideredthelistsopotentialconictstherewerenosituationswhichgaverisetoadirectorindirectinterestoaDirectorwhichconictedwiththeinterestsotheCompany.
Investment Managers
TheBoardasawholeulflstheunctionotheManagementEngagementCommittee.AnInvestmentManagementAgreementbetweentheCompanyandBaillieGiord&CosetsoutthemattersoverwhichtheManagershaveauthorityinaccordancewiththepoliciesanddirectionso,andsubjecttorestrictionsimposedby,theBoard.TheManagementAgreementisterminableonnotlessthan12months’notice.CareulconsiderationhasbeengivenbytheBoardastothebasisonwhichthemanagementeeischarged.TheBoardconsidersthatmaintainingarelativelylowtotalexpense
ratioisinthebestinterestsoallshareholders.TheBoardisalsootheviewthatcalculatingtheeewithreerencetoperormancewouldbeunlikelytoexertapositiveinuenceoverthelongtermperormance.DetailsotheeearrangementswithBaillieGiord&Coareshownonpage40.
DIreCTors’ rePorT
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TheBoardconsiderstheinvestmentmanagementandsecretarialarrangementsortheCompanyonanongoingbasisandaormalreviewisconductedannually.TheBoardconsiders,amongstothers,
theollowingtopicsinitsreview:thequalityothepersonnelassignedtohandletheCompany’saairs;theinvestmentprocessandtheresultsachievedtodate;theadministrativeservicesprovidedbytheSecretariesandthemarketingeortsundertakenbytheManagers.FollowingthemostrecentreviewitistheopinionotheDirectorsthatthecontinuingappointmentoBaillieGiord&CoasManagers,onthetermsagreed,isintheinterestsoshareholdersasawhole.
Directors
InormationabouttheDirectors,includingtheirrelevantexperience,canbeoundonpage7.
MrRARNapierwasappointedtotheBoardon10August2009
andelectedbytheCompany’sshareholdersattheAnnualGeneralMeetingheldon29September2009.
MrPMSBarron,MrRRJBurnsandMrMCNScott,havingservedormorethannineyears,aresubjecttoannualre-electionandwillthereoreberetiringattheAnnualGeneralMeetingandwilloerthemselvesorre-election.Followingormalperormanceevaluation,theBoardconsidersthattheperormanceoMrPMSBarron,MrRRJBurns,andMrMCNScottcontinuestobeeectiveandeachremainscommittedtotheCompany.TheircontributiontotheBoardisgreatlyvaluedandtheBoardrecommendstheirre-electiontoshareholders.
Directors’ Indemnity and Insurance
TheCompanyhasenteredintodeedsoindemnityinavouroeachoitsDirectors.Thedeedscoveranyliabilitiesthatmayarisetoathirdparty,otherthantheCompany,ornegligence,deaultorbreach otrustorduty.TheDirectorsarenotindemnifedinrespectoliabilitiestotheCompany,anyregulatoryorcriminalfnes,anycostsincurredinconnectionwithcriminalproceedingsinwhichtheDirectorisconvictedorcivilproceedingsbroughtbytheCompanyinwhichjudgementisgivenagainsthim.Inaddition,theindemnitydoesnotapplytoanyliabilitytotheextentthatitisrecoveredromanotherperson.
TheCompanyalsomaintainsDirectors’andOfcers’LiabilityInsurance.
Share CapitalCapital Structure
TheCompany’scapitalstructureconsistedo4,962,766ordinaryshareso25peachat30June2010.TherearenorestrictionsconcerningtheholdingortranserotheCompany’sordinarysharesandtherearenospecialrightsattachedtoanyotheshares.
DividendsTheordinarysharescarryarighttoreceivedividends.InterimdividendsaredeterminedbytheDirectors,whereastheproposedfnaldividendissubjecttoshareholderapproval.
Capital Entitlement
Onawindingup,atermeetingtheliabilitiesotheCompany,thesurplusassetswillbepaidtoordinaryshareholdersinproportiontotheirshareholdings.
Voting
Eachordinaryshareholderpresentinpersonorbyproxyisentitledtoonevoteonashowohandsand,onapoll,toonevoteor
everyshareheld.Inormationonthedeadlinesorproxyappointmentscanbeoundonpage55.
Market Purchases of Own Shares
AttheAGMinSeptember2009theCompanywasgrantedauthoritytomakemarketpurchasesoupto753,662ordinaryshares(equivalentto14.99%oitsissuedsharecapital),suchauthoritytoexpireattheAGMotheCompanytobeheldin2010.Duringthe yearunderreviewtheCompanyboughtback65,000ordinaryshares(nominalvalue£16,250)ontheLondonStockExchangeorcancellation.Thetotalconsiderationortheseshareswas£616,000.
Asat3August2010,theCompanyhadnotboughtbackanysharessincetheyearend.Theprincipalreasonsorsharebuy-backsare:
(i) toenhancethenetassetvalueorcontinuingshareholdersbypurchasingsharesatadiscounttotheprevailingnetassetvalue;and
(ii) toaddressanyimbalancebetweenthesupplyoanddemandortheCompany’ssharesthatresultsinadiscountothequotedmarketpricetothepublishednetassetvalueperordinaryshare.
Resolution11,whichisbeingproposedasaspecialresolution,willauthorisetheCompanytomakemarketpurchasesoitsownordinaryshares.
TheDirectorsareseekingshareholders’approvalattheAnnualGeneralMeetingtorenewtheauthoritytomakemarketpurchasesoupto14.99%otheCompany’sordinarysharesinissueatthedateopassingotheresolution,suchauthoritytoexpireattheconclusionothenextAnnualGeneralMeetingotheCompanyorontheexpiryo15monthsromthedateopassingotheresolution,whicheverisearlier.
InaccordancewiththeListingRulesotheUKListingAuthority,themaximumprice(excludingexpenses)thatmaybepaidontheexerciseotheauthoritywillbethehighero(i)5percentabovetheaveragemarketvalueotheordinaryshares(asderivedromtheDailyOfcialListotheLondonStockExchange)overthefve
businessdaysimmediatelyprecedingthedateopurchase;and(ii)thehigherothelastindependenttradeandthehighestcurrentindependentbidontheLondonStockExchange.Theminimumprice(exclusiveoexpenses)thatmaybepaidwillbe25ppershare.
TheauthoritywillnotoitselorcetheCompanytomakemarketpurchasesoitsordinarysharesbutitisconsidereddesirableortheCompanytohavethepowertopurchasesuchshareswhenconsideredappropriate.TheauthoritymaybeusedbytheCompanytomakeaseriesopurchasesoitsordinarysharesorasinglepurchaseothemandanypurchase(s)oordinaryshareswillbemadewithinguidelinesestablishedbytheBoardromtimetotime.
DIreCTors’ rePorT
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28 ANNUAL REPORT 2010
Theauthoritytomakemarketpurchases,iconerred,willonlybeexerciseditheDirectorsareotheopinionthatthenetassetvalueperordinarysharewillbeenhancedortheremainingshareholders
anditisconsideredtobeinthebestinterestsoshareholdersgenerallyoritheoverallfnancialpositionotheCompanywastobeneftromsuchpurchases.ItheCompanypurchasesanysharesunderthisauthority,itmaycancelsuchsharesorholdthemintreasury.TheDirectorsbelieveitisadvantageousortheCompanytohavethischoice.NodividendswouldbepaidontreasurysharesandtheCompanycannotexerciseanyrights(includinganyrighttoattendorvoteatmeetings)inrespectothoseshares.Shareswillonlybere-soldromtreasuryatapremiumtothenetassetvalueperordinaryshare.
Authority to Allot Shares and Disapply Pre-emption Rights
Resolution9intheNoticeotheAnnualGeneralMeetingseekstorenewtheDirectors’generalauthoritytoallotsharesintheCompanyuptoanaggregatenominalvalueo£413,522.Thisamountrepresentsapproximately33.3%otheCompany’stotalordinarysharecapitalinissueasat3August2010(thelatestpracticabledatepriortopublicationothisdocument)andmeetsinstitutionalguidelines.
Resolution10,whichisproposedasaspecialresolution,seekstoprovidetheDirectorswithauthoritytoallotequitysecuritiesandtosellordinarysharesheldintreasuryonanon-pre-emptivebasisorcash(i.e.withoutfrstoeringthemtoexistingshareholderspro-ratatotheirexistingshareholdings)uptoanaggregatenominalamounto£124,069(representingapproximately10%otheissuedsharecapitalotheCompanyasat3August2010)(thelatestpracticable
datepriortopublicationothisdocument).TheauthoritiessoughtinResolutions9and10willcontinueuntiltheearlierotheAnnualGeneralMeetingtobeheldin2011ortheexpiryo15monthsromthedateopassingotheseresolutions.
WhiletheDirectorshavenopresentintentionousingtheauthoritieswhichwillbeconerredbyResolutions9and10,theyenvisagedoingsoattimeswhenthesharepricestandsatapremiumtonetassetvalueandnaturalliquidityisunabletomeetdemands.TheDirectorswillnotmakeanyissueonewordinarysharestoinvestorsunlesstheyconsideritadvantageoustotheCompanytodoso,andnoissueoordinaryshareswillbemadepursuanttotheauthorisationinResolution9whichwouldeectivelyalterthecontrolotheCompanywithoutthepriorapprovaloshareholders
ingeneralmeeting.
Duringtheyearnoordinaryshareswereallottedorcash.
TheCompanydoesnotholdanysharesintreasuryasat3August2010,thelatestpracticabledatepriortopublicationothisdocument.TheCompanydoesnothaveanywarrantsoroptionsinissue.
Creditor Payment Policy
ItistheCompany’spaymentpolicyortheorthcomingfnancialyeartoobtainthebesttermsorallbusiness.Ingeneral,theCompany
agreeswithitssuppliersthetermsonwhichbusinesswilltakeplaceanditisitspolicytoabidebytheseterms.TheCompanyhadnotradecreditorsat30June2010or30June2009.
Disclosure of Information to Auditors
TheDirectorsconfrmthatsoaraseachotheDirectorsisawarethereisnorelevantauditinormationowhichtheCompany’sauditorsareunawareandtheDirectorshavetakenallthestepsthattheymightreasonablybeexpectedtohavetakenasDirectorsinordertomakethemselvesawareoanyrelevantauditinormationandtoestablishthattheCompany’sauditorsareawareothatinormation.
Independent Auditors
TheAuditors,Scott-Moncrie,arewillingtocontinueinofceandresolutionsconcerningtheirreappointmentandremunerationwillbeproposedattheAnnualGeneralMeeting.
Recommendation
TheDirectorsunanimouslyrecommendyoutovoteinavourotheresolutionstobeproposedattheAnnualGeneralMeetingasitistheirviewthattheresolutionsareinthebestinterestsotheCompanyanditsshareholdersasawhole,consistentwiththeDirectors’dutytoactinthewaymostlikelytopromotethesuccessotheCompanyorthebeneftoitsshareholdersasawhole.
RichardRJBurnsDirector5August2010
DIreCTors’ rePorT
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 29
DIreCTors’ reMuneraTIon rePorT
2010 2009
£ £
PMSBarron 16,500 16,500RRJBurns 12,000 12,000MIngall(deceasedFebruary2009) – 8,000
RARNapier(appointedAugust2009) 10,734 –MCNScott 12,000 12,000
51,234 48,500
TheDirectorswhoservedintheyearreceivedtheaboveemolumentsintheormoees.
Directors’ Emoluments for the Year (audited)
Directors’ Remuneration Report
TheBoardhaspreparedthisreport,inaccordancewiththerequirementsotheCompaniesAct2006.AnordinaryresolutionortheapprovalothisreportwillbeputtothemembersattheorthcomingAnnualGeneralMeeting.
ThelawrequirestheCompany’sauditorstoauditcertainothedisclosuresprovided.Wheredisclosureshavebeenaudited,theyareindicatedassuch.Theauditors’opinionisincludedintheirreportonpages32and33.
Remuneration CommitteeTheCompanyhasourDirectorsallowhomarenon-executive.ThereisnoseparateremunerationcommitteeandtheBoardasawholeconsiderschangestoDirectors’eesromtimetotime.BaillieGiord&Co,whohavebeenappointedbytheBoardasManagersandSecretaries,provideadvicewhentheBoardconsiderstheleveloDirectors’ees.
Policy on Directors’ fees
TheBoard’spolicyisthattheremunerationoDirectorsshouldbesetatareasonablelevelthatiscommensuratewiththedutiesandresponsibilitiesotheroleandconsistentwiththerequirementtoattractandretainDirectorsotheappropriatequalityandexperience.ItshouldalsoreecttheexperienceotheBoardasawhole,beairandshouldtakeaccountotheleveloeespaidbycomparableinvestmenttrusts.Itisintendedthatthispolicywillcontinueorthe yearending30June2011andsubsequentyears.
Theeesorthenon-executiveDirectorsaredeterminedwithinanaggregatelimitsetoutintheCompany’sArticlesoAssociation,whichcurrentlystandsat£75,000.Non-executiveDirectorsarenoteligibleoranyotherremunerationapartromthereimbursementoallowableexpenses.
TheBoardcarriedoutareviewotheleveloDirectors’eesduringtheyearandconcludedthattheannualeepayabletoeachDirectorshouldremainunchangedat£12,000andtheChairman’sadditional eeshouldremainunchangedat£4,500.Directors’eeswerelast
increasedon1July2007.
Sums paid to Third Parties (audited)
TheDirectors’eespayabletoRARNapierwerepaidtoOrlockAdvisorsLimitedormakinghisservicesavailableasaDirectorotheCompany.
Directors’ service contracts
ItistheBoard’spolicythatnoneotheDirectorshasaservicecontract.AllotheDirectorshavebeenprovidedwithappointmentlettersandthetermsotheirappointmentprovidethatDirectorsshallretireandbesubjecttoelectionatthefrstAnnualGeneralMeetingatertheirappointment.Thereatertheyareobligedtoretireeverythreeyears,andmay,itheywish,oerthemselvesorre-election.TheBoardhasalsoresolvedthatDirectorswhohaveservedontheBoardormorethannineyearswillsubmitthemselvesorre-electionannually.Thereisnonoticeperiodandnoprovisionorcompensationuponearlyterminationoappointment.
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30 ANNUAL REPORT 2010
DIreCTors’ reMuneraTIon rePorT
Date of Due date for
appointment re-election
PMSBarron 9May1979 AGM2010RRJBurns 25September1981 AGM2010RARNapier 10August2009 AGM2012
MCNScott 12February1990 AGM2010
Directors’ Service Details
Company performance
Thegraphbelowcomparesthetotalreturn(assumingalldividendsarereinvested)toMidWynd’sordinaryshareholderscomparedtothetotalshareholderreturnonanotionalinvestmentmadeuposharesinthecomponentpartsotheFTSEAll-ShareIndex.Thisindexwaschosenorcomparisonpurposes,asitisawidelyusedmeasureoperormanceorUKlistedcompanies(FTSEWorldIndexinsterlingterms,whichistheCompany’scomparativeindex,isprovidedorinormationpurposesonly).
Approval
TheDirectors’RemunerationReportonpages29and30wasapprovedbytheBoardoDirectorsandsignedonitsbehalon5August2010.
RichardRJBurnsDirector
Performance Graph
(fguresrebasedto100at30June2005)
Source: Thomson Financial Datastream
Mid Wynd’s share price
FTSE World Index (in sterling terms)
FTSE All-Share
All figures are total returns(assuming net dividends are reinvested).
Past performance is not a guide tofuture performance.
CUMULATIVE TO 30 JUNE
20092006 2007 20082005 2010
80
100
120
140
160
180
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 31
Statement of Directors’ Responsibilitiesin Respect of the Annual Report andthe Financial Statements
sTaTeMenT of DIreCTors’ resPonsIbILITIes
fnancialstatementsandtheDirectors’RemunerationReportcomplywiththeCompaniesAct2006.TheyarealsoresponsibleorsaeguardingtheassetsotheCompanyandhenceortakingreasonablestepsorthepreventionanddetectionoraudandotherirregularities.
TheDirectorshavedelegatedresponsibilitytotheManagersorthemaintenanceandintegrityotheCompany’spageotheManagers’website.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationofnancialstatementsmaydierromlegislationinotherjurisdictions.
EachotheDirectors,whosenamesandunctionsarelistedwithintheDirectorsandManagementsectionconfrmthat,tothebestotheirknowledge:
•thefnancialstatements,whichhavebeenpreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UnitedKingdomAccountingStandardsandapplicablelaw),giveatrueandairviewotheassets,liabilities,fnancialpositionandproftotheCompany;and
•theDirectors’ReportincludesaairreviewothedevelopmentandperormanceothebusinessandthepositionotheCompany,togetherwithadescriptionotheprincipalrisksanduncertainties
thatitaces.ByorderotheBoard
RichardRJBurns5August2010
TheDirectorsareresponsibleorpreparingtheAnnualReport,theDirectors’RemunerationReportandthefnancialstatementsinaccordancewithapplicablelawandregulations.
CompanylawrequirestheDirectorstopreparefnancialstatementsoreachfnancialyear.UnderthatlawtheDirectorshaveelectedtopreparethefnancialstatementsinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UnitedKingdomAccountingStandardsandapplicablelaw).UndercompanylawtheDirectorsmustnotapprovethefnancialstatementsunlesstheyaresatisfedthat
theygiveatrueandairviewothestateoaairsotheCompanyandotheproftorlossotheCompanyorthatperiod.Inpreparingthesefnancialstatements,theDirectorsarerequiredto:
•selectsuitableaccountingpoliciesandthenapplythemconsistently;
•makejudgementsandaccountingestimatesthatarereasonableandprudent;
•statewhetherapplicableUKAccountingStandardshavebeenollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefnancialstatementsrespectively;and
•preparethefnancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywill
continueinbusiness.
TheDirectorsareresponsibleorkeepingadequateaccountingrecordsthataresufcienttoshowandexplaintheCompany’stransactionsanddisclosewithreasonableaccuracyatanytimethefnancialpositionotheCompanyandenablethemtoensurethatthe
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32 ANNUAL REPORT 2010
InDePenDenT auDITors’ rePorT
Independent Auditors’ Reportto the shareholders of Mid Wynd International Investment Trust PLC
WehaveauditedthefnancialstatementsoMidWyndInternationalInvestmentTrustPLCortheyearended30June2010whichcomprisetheIncomeStatement,theBalanceSheet,theReconciliationoMovementsinShareholders’Funds,theCashFlowStatementandtherelatednotes.ThefnancialreportingrameworkthathasbeenappliedintheirpreparationisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).
Respective responsibilities of Directors and Auditors
AsexplainedmoreullyintheDirectors’ResponsibilitiesStatementsetoutonpage31,theDirectorsareresponsibleorthepreparationothefnancialstatementsandorbeingsatisfedthattheygiveatrueandairview.OurresponsibilityistoauditthefnancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’sEthicalStandardsorAuditors.
Thisreport,includingtheopinions,hasbeenpreparedorandonlyortheCompany’smembersasabodyinaccordancewithSections495to497otheCompaniesAct2006andornootherpurpose.Wedonot,ingivingtheseopinions,acceptorassumeresponsibility
oranyotherpurposeortoanyotherpersontowhomthisreportisshownorintowhosehandsitmaycomesavewhereexpresslyagreedbyourpriorconsentinwriting.
Scope of the audit of the nancial statements
Anauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefnancialstatementssufcienttogivereasonableassurancethatthefnancialstatementsarereerommaterialmisstatement,whethercausedbyraudorerror.Thisincludesanassessmento:whethertheaccountingpoliciesareappropriatetotheCompany’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessosignifcantaccountingestimatesmadebytheDirectors;andtheoverall
presentationothefnancialstatements.
Opinion on nancial statements
Inouropinionthefnancialstatements:
•giveatrueandairviewothestateotheCompany’saairsasat30June2010andoitsresultsortheyearthenended;
•havebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and
•havebeenpreparedinaccordancewiththerequirementsotheCompaniesAct2006.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 33
InDePenDenT auDITors’ rePorT
Opinion on other matters prescribed by the CompaniesAct 2006
Inouropinion:
•thepartotheDirectors’RemunerationReporttobeauditedhasbeenproperlypreparedinaccordancewiththeCompaniesAct2006;
•theinormationgivenintheDirectors’Reportorthefnancialyearorwhichthefnancialstatementsarepreparedisconsistentwith
thefnancialstatements;and
•theinormationgivenintheCorporateGovernanceStatementincompliancewithrules7.2.5and7.2.6intheDisclosureandTransparencyRulessourcebookissuedbytheFinancialServicesAuthority(inormationaboutinternalcontrolandriskmanagementsystemsinrelationtofnancialreportingprocessesandaboutsharecapitalstructures)isconsistentwiththefnancialstatements.
Matters on which we are required to report by exception
Wehavenothingtoreportinrespectotheollowing:
UndertheCompaniesAct2006wearerequiredtoreporttoyoui,
inouropinion:
•adequateaccountingrecordshavenotbeenkept,orreturnsadequateorouraudithavenotbeenreceivedrombranchesnotvisitedbyus;or
•thefnancialstatementsandthepartotheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccountingrecordsandreturns;or
•certaindisclosuresoDirectors’remunerationspecifedbylawarenotmade;or
•wehavenotreceivedalltheinormationandexplanationswerequireorouraudit.
UndertheListingRuleswearerequiredtoreview:
•theDirectors’statementinrelationtogoingconcern;and
•thepartotheCorporateGovernanceStatementrelatingtotheCompany’scompliancewiththenineprovisionsotheJune2008CombinedCodespecifedorourreview.
AlanRDonaldson(Seniorstatutoryauditor)orandonbehaloScott-Moncrie,StatutoryAuditorExchangePlace3SempleStreet
EdinburghEH38BL5August2010
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34 ANNUAL REPORT 2010
For the year ended 30 June 2010 For the year ended 30 June 2009
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Gains/(losses)oninvestments 9 – 11,977 11,977 – (10,777) (10,777)
Currencylosses 15 – (293) (293) – (12) (12)
Income 2 1,263 – 1,263 1,336 – 1,336
Investmentmanagementee 3 (126) (126) (252) (97) (97) (194)
Otheradministrativeexpenses 4 (168) – (168) (150) – (150)
Net return before nance costsand taxation 969 11,558 12,527 1,089 (10,886) (9,797)
Financecostsoborrowings 5 (45) (45) (90) (20) (20) (40)
Net return on ordinary activitiesbefore taxation 924 11,513 12,437 1,069 (10,906) (9,837)
Taxonordinaryactivities 6 (77) 7 (70) (251) 34 (217)
Net return on ordinary activitiesafter taxation 847 11,520 12,367 818 (10,872) (10,054)
Net return per ordinary share 8 16.85p 229.23p 246.08p 16.26p (216.24p) (199.98p)
InCoMe sTaTeMenT
ThetotalcolumnothisstatementistheproftandlossaccountotheCompany.
Allrevenueandcapitalitemsinthisstatementderiveromcontinuingoperations.Nooperationswereacquiredordiscontinuedduringtheyear.AStatementoTotalRecognisedGainsandLossesisnotrequiredasallgainsandlossesotheCompanyhavebeenreectedintheabovestatement.
Theaccompanyingnotesonpages38to52areanintegralpartothefnancialstatements.
Afnaldividendortheyearo9.0ppershareisproposed(2009–8.5p)makingatotalo15.5portheyear(2009–15.0p).Moreinormationondividenddistributionscanbeoundinnote7onpage42.
Income Statement
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 35
baLanCe sheeT
At 30 June 2010 At 30 June 2009
Notes £’000 £’000 £’000 £’000
Fixed assetsInvestmentsheldatairvaluethroughproftorloss 9 54,586 40,776
Current assetsDebtors 10 1,378 274
Cashanddeposits 21 402 143
1,780 417
CreditorsAmountsallingduewithinoneyear 11 (2,957) (240)
Net current (liabilities)/assets (1,177) 177
Total assets less current liabilities 53,409 40,953
CreditorsAmountsallingdueatermorethanoneyear 12 (3,347) (1,888)
Provisions for liabilities and chargesDeerredtaxation 13 – –
Total net assets 50,062 39,065
Capital and reserves
Called-upsharecapital 14 1,241 1,257Capitalredemptionreserve 15 16 –
Sharepremium 15 20 20
Capitalreserve 15 47,295 36,391
Revenuereserve 15 1,490 1,397
Shareholders’ funds 15 50,062 39,065
Net asset value per ordinary share(aterdeductingborrowingsatairvalue) 16 1,008.2p 776.5p
Net asset value per ordinary share(aterdeductingborrowingsatpar) 16 1,008.7p 777.0p
ThefnancialstatementsoMidWyndInternationalInvestmentTrustPLC(CompanyregistrationnumberSC42651)wereapprovedandauthorisedorissuebytheBoardandweresignedon5August2010.
RICHARDRJBURNSDirector
Theaccompanyingnotesonpages38to52areanintegralpartothefnancialstatements.
Balance Sheet
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36 ANNUAL REPORT 2010
reConCILIaTIon of MoeMenTs In sharehoLDers’ funDs
Capital
Share redemption Share Capital Revenue Shareholders’capital reserve premium reserve reserve funds
Notes £’000 £’000 £’000 £’000 £’000 £’000
Shareholders’undsat1July2009 1,257 – 20 36,391 1,397 39,065
Netreturnonordinaryactivitiesatertaxation15 – – – 11,520 847 12,367
Sharespurchasedorcancellation 15 (16) 16 _ (616) – (616)
Dividendspaidduringtheyear 7 – – – – (754) (754)
Shareholders’ funds at 30 June 2010 1,241 16 20 47,295 1,490 50,062
Capital
Share redemption Share Capital Revenue Shareholders’capital reserve premium reserve reserve funds
Notes £’000 £’000 £’000 £’000 £’000 £’000
Shareholders’undsat1July2008 1,257 – 20 47,263 1,449 49,989
Netreturnonordinaryactivitiesatertaxation – – – (10,872) 818 (10,054)
Dividendspaidduringtheyear 7 – – – – (870) (870)
Shareholders’ funds at 30 June 2009 1,257 – 20 36,391 1,397 39,065
For the year ended 30 June 2010
For the year ended 30 June 2009
Reconciliation of Movements in Shareholders’ Funds
Theaccompanyingnotesonpages38to52areanintegralpartothefnancialstatements.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 37
For the year ended For the year ended
30 June 2010 30 June 2009
Notes £’000 £’000 £’000 £’000
Net cash inow from operating activities 17 755 982
Servicing of nanceInterestpaid (90) (37)
Net cash outow from servicing of nance (90) (37)
TaxationCorporationtaxpaid (154) (198)
Total tax paid (154) (198)
Financial investmentAcquisitionsoinvestments (30,573) (29,282)
Disposalsoinvestments 28,147 24,795
Realisedcurrencyproft 29 336
Net cash outow from nancial investment (2,397) (4,151)
Equity dividends paid (754) (870)
Net cash outow before use ofliquid resources and nancing (2,640) (4,274)
Liquid resourcesDecreaseinshorttermdeposits – 1,771
Net cash inow from use of liquid resources – 1,771
Financing
Sharespurchasedorcancellation (238) –
Bankloansdrawndown 3,137 –
Net cash inow from nancing 2,899 –
Increase/(decrease) in cash 18 259 (2,503)
Reconciliation of net cash ow tomovement in net debt 18
Increase/(decrease)incashintheyear 259 (2,503)
Decreaseinshorttermdeposits – (1,771)
Netcashinowrombankloans (3,137) –
Exchangemovementonshorttermdeposits – 118
Exchangemovementonbankloans (322) (466)
Movement in net debt in the year (3,200) (4,622)
Net (debt)/funds at 1 July (1,745) 2,877
Net debt at 30 June (4,945) (1,745)
Cash fLoW sTaTeMenT
Cash Flow Statement
Theaccompanyingnotesonpages38to52areanintegralpartothefnancialstatements.
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38 ANNUAL REPORT 2010
1 Principal Accounting Policies
2 Income
3 Investment Management Fee
4 Other Administrative Expenses
5 Finance Costs of Borrowings
6 Tax on Ordinary Activities
7 Ordinary Dividends
8 Net Return per Ordinary Share
9 Fixed Assets – Investments
10 Debtors
11 Creditors – Amounts fallingdue within one year
12 Creditors – Amounts fallingdue after more than one year
Contents
13 Deferred Taxation
14 Called-up Share Capital
15 Capital and Reserves
16 Net Asset Value per Ordinary Share
17 Reconciliation of Net Return beforeFinance Costs and Taxation to NetCash Inow from Operating Activities
18 Analysis of Change in Net Debt
19 Contingent Liabilities, Guarantees andFinancial Commitments
20 Related Party Transactions
21 Financial Instruments
noTes To fInanCIaL sTaTeMenTs
Notes to Financial Statements
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 39
1 Principal Accounting Policies
noTes To fInanCIaL sTaTeMenTs
Asummaryotheprincipalaccountingpolicies,whichareunchangedromtheprioryearandhavebeenappliedconsistently,issetoutbelow.
(a) Basis of AccountingThefnancialstatementsarepreparedunderthehistoricalcostconvention,modifedtoincludetherevaluationofxedassetinvestments,andontheassumptionthatapprovalasaninvestmenttrustwillcontinuetobegranted.
ThefnancialstatementshavebeenpreparedinaccordancewithTheCompaniesAct2006,applicableUnitedKingdomaccountingstandardsandwiththeStatementoRecommendedPractice‘FinancialStatementsoInvestmentTrustCompanies’issuedinJanuary2009.
InordertobetterreecttheactivitiesotheCompanyandinaccordancewithguidanceissuedbytheAIC,supplementaryinormationwhichanalysestheproftandlossaccountbetweenitemsoarevenueandcapitalnaturehasbeenpresentedintheIncomeStatement.
FinancialassetsandfnancialliabilitiesarerecognisedintheCompany’s
balancesheetwhenitbecomesapartytothecontractualprovisionsotheinstrument.
TheDirectorsconsidertheCompany’sunctionalcurrencytobesterlingastheCompany’sshareholdersarepredominantlybasedintheUKandtheCompanyissubjecttotheUK’sregulatoryenvironment.
(b) InvestmentsPurchasesandsalesoinvestmentsareaccountedoronatradedatebasis.
Investmentsaredesignatedasheldatairvaluethroughproftorlossoninitialrecognitionandaremeasuredatsubsequentreportingdatesatairvalue.Theairvalueolistedinvestmentsisbidvalueor,inthecaseoFTSE100constituents,Japanese,GreekandIndianlistedinvestments,atlasttradedprices.ListedinvestmentsincludeOpenEndedInvestment
Companies(‘OEICs’)authorisedintheUKandSociétéd’InvestissementÀCapitalVariable(‘SICAVs’)authorisedinEurope;thesearevaluedatclosingpricesandareclassifedinthelistoinvestmentsaccordingtotheprincipalgeographicalareaotheunderlyingholdings.
Theairvalueounlistedinvestmentsusesvaluationtechniques,determinedbytheDirectors,baseduponlatestdealingprices,stockbrokervaluations,netassetvaluesandotherinormation,asappropriate.
(c) DerivativesTheCompanymayusederivativesorthepurposeoefcientportoliomanagement(includingreducing,transerringoreliminatingriskinitsinvestmentsandprotectionagainstcurrencyrisk)andtoachievecapitalgrowth.SuchinstrumentsarerecognisedonthedateothecontractthatcreatestheCompany’sobligationtopayorreceivecashowsandare
measuredasfnancialassetsorliabilitiesatairvalueatsubsequentreportingdates,whiletherelevantcontractsremainopen.Theairvalueisdeterminedbyreerencetotheopenmarketvalueothecontract.
WheretheinvestmentrationaleortheuseoderivativesistohedgespecifcriskspertainingtotheCompany’sportoliocomposition,hedgeaccountingwillonlybeadoptedwherethederivativeinstrumentrelatesspecifcallytoasingleitem,orgroupoitems,oequalandoppositefnancialexposure,andwherethederivativeinstrumenthasbeenexplicitlydesignatedasahedgeosuchitem(s)atthedateoinitialrecognition.InallothercircumstanceschangesintheairvalueoderivativeinstrumentsarerecognisedimmediatelyintheIncomeStatementascapitalorrevenueasappropriate.
(d) Cash and Cash Equivalents
Cashandcashequivalentsincludescashinhand,depositsheldatcallwithbanksandothershorttermhighlyliquidinvestmentswithoriginalmaturitiesothreemonthsorless.
(e) Income(i) Incomeromequityinvestmentsisbroughtintoaccountonthedate
onwhichtheinvestmentsarequotedex-dividendor,wherenoex-dividenddateisquoted,whentheCompany’srighttoreceivepaymentisestablished.EquityinvestmentincomeincludesdistributionsromCollectiveInvestmentSchemesotherthanthosethatrelatetoequalisation,whicharetreatedascapitalitems.
(ii)Interestromfxedinterestsecuritiesisrecognisedonaneective yieldbasis.
(iii)Unrankedinvestmentincomeincludesthetaxesdeductedatsource.
(iv)Frankedinvestmentincomeisstatednetotaxcredits.
(v)Underwritingcommissionandinterestreceivableondepositsarerecognisedonanaccrualsbasis.
(vi)Iscripistakeninlieuodividendsincash,thenetamountothecashdividenddeclarediscreditedtotherevenueaccount.Anyexcessinthevalueothesharesreceivedovertheamountothecashdividendoregoneisrecognisedascapital.
(f) ExpensesAllexpensesareaccountedoronanaccrualsbasis.Expensesarechargedthroughtherevenueaccountexceptasollows:wheretheyrelatedirectlytotheacquisitionordisposaloaninvestment,inwhichcasetheyareaddedtothecostotheinvestmentordeductedromthesaleproceeds;andwheretheyareconnectedwiththemaintenanceorenhancementothevalueoinvestments,inwhichcasetheyarecharged50:50totherevenueaccountandcapitalreserve.
(g) Finance CostsLoaninterestisaccountedoronanaccrualsbasisandisallocated50:50
totherevenueaccountandcapitalreserve.Loanbreakagecostsarechargedtothecapitalreserve.
(h) Deferred TaxationDeerredtaxationisprovidedonalltimingdierenceswhichhaveoriginatedbutnotreversedbythebalancesheetdate,calculatedatthecurrenttaxraterelevanttothebeneftorliability.Deerredtaxassetsarerecognisedonlytotheextentthatitismorelikelythannotthattherewillbetaxableproftsromwhichunderlyingtimingdierencescanbededucted.
(i) Dividend DistributionsInterimdividendsarerecognisedintheperiodinwhichtheyarepaidandfnaldividendsarerecognisedintheperiodinwhichthedividendsareapprovedbytheCompany’sshareholders.
(j) Foreign CurrenciesTransactionsinvolvingoreigncurrenciesareconvertedattheraterulingatthetimeothetransaction.Assetsandliabilitiesinoreigncurrenciesaretranslatedattheclosingratesoexchangeatthebalancesheetdate,withtheexceptionoorwardexchangecontractswhicharevaluedattheorwardraterulingatthebalancesheetdate.Anygainorlossarisingromachangeinexchangeratesubsequenttothedateothetransactionisincludedasanexchangegainorlossincapitalreserveorrevenuereserveasappropriate.
(k) Capital ReserveGainsandlossesonsalesoinvestments,exchangedierencesoacapitalnatureandtheamountbywhichtheairvalueoassetsand
liabilitiesdiersromtheirbookvaluearedealtwithinthisreserve.50%omanagementeesandfnancecoststogetherwithanyassociatedtaxrelieareallocatedtothecapitalreserveinaccordancewiththeCompany’sobjectiveocombiningcapitalandincomegrowth.PurchasesotheCompany’sownsharesarealsoundedromthisreserve.
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40 ANNUAL REPORT 2010
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2 Income
2010 2009
£’000 £’000
Income from investments
Frankedinvestmentincome 98 128UKunrankedinvestmentincome† 143 196Overseasdividends 753 497Overseasinterest 263 479
1,257 1,300
Other incomeDepositinterest – 30Underwritingcommissionandcommitmentees 6 6
6 36
Total income 1,263 1,336
Total income comprises:Dividendsromfnancialassetsdesignatedatairvaluethroughproftorloss 914 740
Interestromfnancialassetsdesignatedatairvaluethroughproftorloss 343 560Depositinterestromfnancialassetsnotatairvaluethroughproftorloss – 30Otherincomenotromfnancialassets 6 6
1,263 1,336
†IncludesOEICincome.
3 Investment Management Fee
2010 2009
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investmentmanagementee 126 126 252 97 97 194
BaillieGiord&CoareemployedbytheCompanyasManagersandSecretariesunderamanagementagreementwhichisterminableonnotlessthanoneyear’snotice,oronshorternoticeincertaincircumstances.Theeeinrespectoeachquarteris0.125%othenetassetsotheCompanyattributabletoitsshareholdersonthelastdayothatquarter.Themanagementeeisleviedonallassets,includingholdingsincollectiveinvestmentschemes(OEICs)managedbyBaillieGiord&Co,however,theOEICs’shareclassesheldbytheCompanydonotincurmanagementees.
MrRRJBurns,aDirectorotheCompany,wasapartneroBaillieGiord&Co,untilhisretiralon30April2006.
4 Other Administrative Expenses – all charged to revenue
2010 2009£’000 £’000
Generaladministrativeexpenses 106 90Directors’ees(seeDirectors’RemunerationReportonpages29and30) 51 49Auditors’remunerationorauditservices 11 11
168 150
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5 Finance Costs of Borrowings
2010 2009
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Bank loans repayable withinve years:Interest 45 45 90 20 20 40
6 Tax on Ordinary Activities
2010 2009
Revenue Capital Total Revenue Capital Total£’000 £’000 £’000 £’000 £’000 £’000
UKcorporationtaxat28%(2009–28%) 7 (7) – 255 (34) 221Overseastaxation 70 – 70 43 – 43
Relieoroverseastaxation – – – (43) – (43)Totalcurrenttax 77 (7) 70 255 (34) 221Deerredtaxation(seenote13) – – – (4) – (4)
77 (7) 70 251 (34) 217
2010 2009
£’000 £’000
ThetaxchargeortheyearislowerthantheaveragestandardrateocorporationtaxintheUK(28%)
Thedierencesareexplainedbelow:
Netreturnonordinaryactivitiesbeoretaxation 12,437 (9,837)
NetreturnonordinaryactivitiesmultipliedbytheaveragestandardrateocorporationtaxintheUKo28%(2009–28%) 3,482 (2,754)Eectso:Capitalreturnsnottaxable (3,272) 3,021Incomenottaxable(UKdividendincome) (27) (36)Incomenottaxable(overseasdividendincome) (218) (7)Marginalsmallcompaniesrelie – (7)Overseastax–nonosettable 70 –Deerredtaxadjustment – 4Taxablelossesintheyearnotutilised 35 –
Currenttaxchargeortheyear 70 221
Asaninvestmenttrust,theCompany’scapitalreturnsarenottaxable.
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7 Ordinary Dividends
2010 2009 2010 2009
£’000 £’000
Amounts recognised as distributions in the year:
Previousyear’sfnal(paid8October2009) 8.50p 8.50p 427 427Previousyear’sspecial – 2.30p – 116Interim(paid1April2010) 6.50p 6.50p 327 327
15.00p 17.30p 754 870
Wealsosetoutbelowthetotaldividendspaidandpayableinrespectothefnancialyear,whichisthebasisonwhichtherequirementsosection1158otheCorporationTaxesAct2010areconsidered.Therevenueavailableordistributionbywayodividendorthe yearis£847,000(2009–£818,000).
2010 2009 2010 2009
£’000 £’000
Dividends paid and payable in respect of the year:Interimdividendperordinaryshare(paid1April2010) 6.50p 6.50p 327 327
Proposedfnaldividendperordinaryshare (payable7October2010) 9.00p 8.50p 447 427
15.50p 15.00p 774 754
8 Net Return per Ordinary Share
2010 2009
Revenue Capital Total Revenue Capital Total
Netreturnonordinaryactivitiesatertaxation 16.85p 229.23p 246.08p 16.26p (216.24p) (199.98p)
Revenuereturnperordinaryshareisbasedonthenetrevenueonordinaryactivitiesatertaxationo£847,000(2009–£818,000),andon5,025,506(2009–5,027,766)ordinaryshares,beingtheweightedaveragenumberoordinarysharesinissueduringtheyear.
Capitalreturnperordinaryshareisbasedonthenetcapitalgainorthefnancialyearo£11,520,000(2009–netcapitallosso£10,872,000),andon5,025,506(2009–5,027,766)ordinaryshares,beingtheweightedaveragenumberoordinarysharesinissueduringtheyear.
Therearenodilutiveorpotentiallydilutivesharesinissue.
9 Fixed Assets – Investments
Level 1 Level 2 Level 3 Total
As at 30 June 2010 £’000 £’000 £’000 £’000
SecuritiesListedequities 49,518 2,473 – 51,991Listedconvertiblesecurities 139 – – 139Listeddebtsecurities 563 – 1,558 2,121Unlisteddebtsecurities – – 335 335
Totalfnancialassetinvestments 50,220 2,473 1,893 54,586
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9 Fixed Assets – Investments (continued)
Level 1 Level 2 Level 3 Total
As at 30 June 2009 £’000 £’000 £’000 £’000
Securities
Listedequities 33,586 – – 33,586Listedconvertiblesecurities 440 – – 440Listeddebtsecurities 4,494 1,299 561 6,354Unlisteddebtsecurities – – 396 396
Totalfnancialassetinvestments 38,520 1,299 957 40,776
Investmentsinsecuritiesarefnancialassetsdesignatedatairvaluethroughproftorlossoninitialrecognition.InaccordancewithFinancialReportingStandard29‘FinancialInstruments:Disclosures’,theprecedingtablesprovideananalysisotheseinvestmentsbasedontheairvaluehierarchydescribedbelowwhichreectsthereliabilityandsignifcanceotheinormationusedtomeasuretheirairvalue.
Fair Value HierarchyTheairvaluehierarchyusedtoanalysetheairvaluesofnancialassetsisdescribedbelow.Thelevelsaredeterminedbythelowest(thatistheleastreliableorleastindependentlyobservable)leveloinputthatissignifcanttotheairvaluemeasurementortheindividualinvestmentinitsentiretyasollows:
Level 1– investmentswithquotedpricesinanactivemarket;
Level 2– investmentswhoseairvalueisbaseddirectlyonobservablecurrentmarketpricesorisindirectlybeingderivedrommarketprices;and
Level 3-–investmentswhoseairvalueisdeterminedusingavaluationtechniquebasedonassumptionsthatarenotsupportedbyobservablecurrentmarketpricesorarenotbasedonobservablemarketdata.
Listed Listed Unlisted
equities debt debt Total
£’000 £’000 £’000 £’000
Costoinvestmentsheldat1July2009 30,269 8,437 495 39,201Investmentholdinggains/(losses)at1July2009 3,317 (1,643) (99) 1,575
Fairvalueoinvestmentsheldat1July2009 33,586 6,794 396 40,776Movementsinyear:Purchasesatcost 30,188 869 – 31,057Sales–proceeds (21,779) (7,515) – (29,294) –gainsonsales 4,183 687 – 4,870Amortisationofxedinterestbookcost – 70 – 70Changesininvestmentholdinggains/losses 5,813 1,355 (61) 7,107
Fairvalueoinvestmentsheldat30June2010 51,991 2,260 335 54,586
Costoinvestmentsheldat30June2010 42,861 2,548 495 45,904Investmentholdinggains/(losses)at30June2010 9,130 (288) (160) 8,682
Fairvalueoinvestmentsheldat30June2010 51,991 2,260 335 54,586Thepurchasesandsalesproceedsfguresaboveincludetransactioncostso£69,000onpurchases(2009–£33,000)and£16,000onsales(2009–£10,000),makingatotalo£85,000(2009–£43,000).
ListedequitiesincludesOEICs,SICAVsandconvertibleloannotesexpectedtoconverttoequity.
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9 Fixed Assets – Investments (continued)
TheollowingtableshowsareconciliationromtheopeningbalancestotheclosingbalancesorairvaluemeasurementsinLevel3otheairvaluehierarchy.
Value at Purchases/ Sales Gains on Holding Valueat 30 June 2009 amortisation* proceeds sales gains/losses 30June2010
Level 3 £’000 £’000 £’000 £’000 £’000 £’000
Listeddebt 561 442 (2) 2 555 1,558Unlisteddebt 396 – – – (61) 335
957 442 (2) 2 494 1,893
*Purchases/amortisationincludesamortisationofxedincomesecuritieso£12,000.ThegainsandlossesincludedintheabovetablehaveallbeenrecognisedintheIncomeStatementonpage34.TheCompanybelievesthatotherreasonablypossiblealternativevaluationsoritsLevel3holdingswouldnotbesignifcantlydierentromthoseincludedinthefnancialstatements.
2010 2009
£’000 £’000
Net gains/(losses) on investments designated at fair value through prot or loss on initial recognition Gains/(losses)onsales 4,870 (4,210)Changesininvestmentholdinggains/losses 7,107 (6,567)
11,977 (10,777)
Othegainsonsaleso£4,870,000(2009–losseso£4,210,000)duringtheyear,anetgaino£168,000(2009–£3,739,000)wasincludedintheinvestmentholdinggainsatthepreviousyearend.
DuringtheyeartheCompanyheldsharesinOpenEndedInvestmentCompanies(OEICs)managedbyBaillieGiord&Co,theCompany’sinvestmentmanager.TheshareclassesheldintheOEICsdonotincurmanagementees.At30JunetheCompanyheld:
2010 2009
% %
C income of share C income of share
shares held class held shares held class held
BaillieGiordDevelopedAsiaPacifcFund 550,400 10.6 1,351,000 32.3BaillieGiordJapaneseSmallerCompaniesFund 103,464 100.0 202,364 100.0BaillieGiordGreaterChinaFund 170,260 3.6 579,100 10.4
ThetotalvalueotheCompany’sholdingsininvestmentsmanagedbyBaillieGiord&Coat30June2010was£2,394,000(2009–£4,601,000).
10 Debtors
2010 2009
£’000 £’000
Amounts falling due within one year:Incomeaccrued(net) 193 226Salesorsubsequentsettlement 1,147 –Otherdebtorsandprepayments 38 48
1,378 274
Noneotheabovedebtorsarefnancialassetsdesignatedatairvaluethroughproftorloss.Thecarryingamountodebtorsisareasonableapproximationoairvalue.
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11 Creditors – Amounts falling due within one year
2010 2009
£’000 £’000
LloydsTSBScotlandshorttermloanacility(seenote12) 2,000 –
Purchasesorsubsequentsettlement 862 –Corporationtaxpayable – 154Othercreditorsandaccruals 95 86
2,957 240
Noneotheabovecreditorsarefnancialliabilitiesdesignatedatairvaluethroughproftorloss.Includedinothercreditorsis£63,000(2009–£49,000)inrespectotheinvestmentmanagementee.
12 Creditors – Amounts falling due after more than one year
2010 2009
£’000 £’000
Bankloan 3,347 1,888
Borrowing facilities
A£2millionloanacilityhasbeenarrangedwithLloydsTSBScotlandplc,expiringon27August2010.
AUS$5millionmulti-currencyloanacilityhasbeenarrangedwithLloydsTSBScotlandplc,expiringon27February2012.
At30June2010drawingswereasollows:
LloydsTSBScotlandplc–¥300millionataninterestrateo1.905%perannum(2009–¥300millionat1.905%)–€1.32millionataninterestrateo0.8483%perannum(2009–nil)–£2millionataninterestrateo2.1724%perannum(2009–nil)
Themaincovenantsrelatingtotheloansare:
(i) Totalborrowingsshallnotexceed25%otheCompany’sinvestmentportolio.(ii)TheCompany’sminimumnetassetvalueshallbe£20million.
13 Deferred Taxation
2010 2009
£’000 £’000
Incometaxableinalaterperiod – –Overseaswithholdingtaxclaimableasadeductioninalaterperiod – –
– –
Deerredtaxationprovisionat1July – 4Deerredtaxationchargeortheyear – (4)
Deerredtaxationprovisionat30June – –
14 Called-up Share Capital
2010 2009
Number £’000 Number £’000
Allotted,calledupandullypaidordinaryshareso25peach 4,962,766 1,241 5,027,766 1,257
Intheyearto30June2010theCompanyboughtback65,000ordinaryshareswithanominalvalueo£16,250atatotalcost
o£616,000.At30June2010theCompanyhadauthoritytobuybackaurther688,662ordinarysharesinaccordancewiththeauthoritygrantedattheAGMinSeptember2009.UndertheprovisionsotheCompany’sArticlesoAssociationsharebuybacksareundedromthecapitalreserve.
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15 Capital and Reserves
Capital
Share redemption Share Capital Revenue Shareholders’
capital reserve premium reserve reserve funds£’000 £’000 £’000 £’000 £’000 £’000
At1July2009 1,257 – 20 36,391 1,397 39,065Gainsoninvestments – – – 11,977 – 11,977Exchangedierencesonbankloans – – – (322) – (322)Otherexchangedierences – – – 29 – 29Investmentmanagementee – – – (126) – (126)Financecostsoborrowings – – – (45) – (45)Taxrelieonmanagementeesandfnancecosts – – – 7 – 7Revenuereturnonordinaryactivities atertaxation – – – – 847 847Sharespurchasedorcancellation (16) 16 – (616) – (616)Dividendspaidintheyear – – – – (754) (754)
At30June2010 1,241 16 20 47,295 1,490 50,062
Distributable reservesUnderthetermsotheCompany’sArticlesoAssociation,sumsstandingtothecreditotheCapitalreservearedistributableonlybywayoredemptionorpurchaseoanyotheCompany’sownshares.CompanylawstatesthatInvestmentCompaniesmayonlydistributeaccumulated‘realised’profts.Securitieslistedonarecognisedstockexchangearegenerallyregardedasbeingreadilyconvertibleintocashandhenceunrealisedproftsinrespectosuchsecuritiescanberegardedasdistributableundercompanylaw.TheCapitalreserveincludesinvestmentholdinggainso£8,682,000(2009–gainso£1,575,000)asdetailedinnote9.
TheRevenuereserveisdistributablebywayodividend.
16 Net Asset Value per Ordinary Share
ThenetassetvalueperordinaryshareandthenetassetsattributabletotheordinaryshareholdersattheyearendcalculatedinaccordancewiththeArticlesoAssociationwereasollows:
2010 2009 2010 2009
£’000 £’000
Ordinaryshares 1,008.7p 777.0p 50,062 39,065
2010 2009
£’000 £’000
Themovementsduringtheyearotheassetsattributabletotheordinaryshareswereasollows: Totalnetassetsat1July 39,065 49,989Totalrecognisedgainsandlossesortheyear 12,367 (10,054)Sharespurchasedorcancellation (616) –
Dividendsappropriatedintheyear (754) (870)
Totalnetassetsat30June 50,062 39,065
Netassetvalueperordinaryshareisbasedonnetassetsasshownaboveandon4,962,766(2009–5,027,766)ordinaryshares,beingthenumberoordinarysharesinissueattheyearend.
Deductingborrowingsatairvalue(seenote21,page52)wouldhavetheeectodecreasingnetassetvalueperordinarysharerom1,008.7pto1,008.2p.Takingthemarketpriceotheordinarysharesat30June2010o935.0p,thiswouldhavegivenadiscounttonetassetvalueo7.3%onbothbases.At30June2009thenetassetvalueaterdeductingborrowingsatairvaluewas776.5p.Takingthemarketpriceotheordinarysharesat30June2009o672.5p,thiswouldhavegivenadiscounttonetassetvalueo13.4%onbothbases.
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17 Reconciliation of Net Return before Finance Costs and Taxation to Net Cash Inow from Operating Activities
2010 2009
£’000 £’000
Netreturnbeorefnancecostsandtaxation 12,527 (9,797)
(Gains)/lossesoninvestments (11,977) 10,777Currencylosses 293 12Amortisationofxedinterestbookcost (70) (128)Decreaseinaccruedincome 44 32Decreaseindebtors 10 162Increase/(decrease)increditors 9 (11)Overseastaxsuered (58) (43)Incometaxsuered (23) (22)
Netcashinowromoperatingactivities 755 982
18 Analysis of Change in Net Debt
At 1 July Cash Exchange At 30 June
2009 ows movement 2010
£’000 £’000 £’000 £’000
Cashatbankandinhand 143 259 – 402Bankloandueinlessthanoneyear – (2,000) – (2,000)Bankloansdueinonetotwoyears (1,888) (1,137) (322) (3,347)
(1,745) (2,878) (322) (4,945)
19 Contingent Liabilities, Guarantees and Financial Commitments
At30June2010theCompanyhadcontingentliabilitieso£1,005,000(2009–£1,005,000)inrespectoasubscriptionagreement,relatingtoparticipatingunsecuredloannotesinPantheonInternationalParticipationsplc(PIP),whichexpireson31December2010.ThePIPloannotesoparvalue£495,000heldbytheCompanywerevaluedat£335,000at30June2010(30June2009£396,000).TheCompanyiscurrentlyinnegotiationstoextendthesubscriptionagreementexpirydateto31December2011anditisexpectedthathalotheremainingsubscriptionamountwillbedrawnintourtherunsecuredloannotesinPIPbytheendoSeptember2010.
20 Related Party Transactions
TheDirectors’eesortheyeararedetailedintheDirectors’RemunerationReportonpage29.NoDirectorhasacontractoservicewiththeCompany.DuringtheyearnoDirectorwasinterestedinanycontractorothermatterrequiringdisclosureundersection412otheCompaniesAct2006otherthanasdisclosedinnote3.Thedetailsothemanagementeearesetoutinnote3,andthemanagementeeduetoBaillieGiordasat30June2010isdisclosedinnote11.
21 Financial Instruments
AsanInvestmentTrust,theCompanyinvestsinequitiesandmakesotherinvestmentssoastoachieveitsinvestmentobjectiveoachievingcapitalandincomegrowthbyinvestingonaworldwidebasis.Inpursuingitsinvestmentobjective,theCompanyisexposedtovarioustypesoriskthatareassociatedwiththefnancialinstrumentsandmarketsinwhichitinvests.
Theserisksarecategorisedhereasmarketrisk(comprisingcurrencyrisk,interestrateriskandotherpricerisk),liquidityriskandcreditrisk.TheBoardmonitorscloselytheCompany’sexposuretotheserisksbutdoessoinordertoreducethelikelihoodoapermanentlossocapitalratherthantominimisetheshorttermvolatility.
TheCompanymayenterintoderivativetransactionsasexplainedintheInvestmentPolicyonpage21.Nosuchtransactionswereundertakenintheperiodunderreview.
Theriskmanagementpoliciesandproceduresoutlinedinthisnotehavenotchangedsubstantiallyromthepreviousaccountingperiod.
Market RiskTheairvalueoruturecashowsoafnancialinstrumentorotherinvestmentheldbytheCompanymayuctuatebecauseochangesinmarketprices.Thismarketriskcomprisesthreeelements–currencyrisk,interestrateriskandotherpricerisk.TheBoardoDirectorsreviewsandagreespoliciesormanagingtheserisksandtheCompany’sInvestmentManagersbothassesstheexposuretomarketriskwhenmakingindividualinvestmentdecisionsandmonitortheoveralllevelomarketriskacrosstheinvestmentportolioonanongoingbasis.
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21 Financial Instruments (continued)
(i) Currency RiskCertainotheCompany’sassets,liabilitiesandincomearedenominatedincurrenciesotherthansterling(theCompany’sunctionalcurrencyandthatinwhichitreportsitsresults).Consequently,movementsinexchangeratesmayaectthesterlingvalueothoseitems.
TheInvestmentManagersmonitortheCompany’sexposuretooreigncurrenciesandreporttotheBoardonaregularbasis.TheInvestmentManagersassesstherisktotheCompanyotheoreigncurrencyexposurebyconsideringtheeectontheCompany’snetassetvalueandincomeoamovementintheratesoexchangetowhichtheCompany’sassets,liabilities,incomeandexpensesareexposed.However,thecountryinwhichacompanyislistedisnotnecessarilywhereitearnsitsprofts.Themovementinexchangeratesonoverseasearningsmayhaveamoresignifcantimpactuponacompany’svaluationthanasimpletranslationothecurrencyinwhichthecompanyisquoted.
ForeigncurrencyborrowingscanlimittheCompany’sexposuretoanticipateduturechangesinexchangerateswhichmightotherwiseadverselyaectthevalueotheportoliooinvestments.
Exposuretocurrencyriskthroughassetallocation,whichiscalculatedbyreerencetothecurrencyinwhichtheassetorliabilityisquoted,isshownbelow.TheexposureotheCompany’sOEICinvestmentsmanagedbyBaillieGiord&Cohasbeenincludedintheanalysisassterling,beingtheircurrencyoquotation.Themainchangestonetcurrencyexposureduringtheyearareasollows:exposuretotheUSdollardecreased,reectingsalesoUSbonds;exposuretotheJapaneseyendecreasedowingtothesaleoaJapanesebond;exposure
totheBrazilianrealincreasedthroughpurchasesoBrazilianequityinvestmentsandexposuretotheHongKongdollarincreasedthroughpurchasesoHongKongandChineseequities.ExplanationsochangesinassetallocationcanbeoundintheChairman’sStatementandManagers’PortolioReviewonpages4to6and13to16.
Cash and Bank Other debtors Net Investments deposits loans and creditors* exposure
At 30 June 2010 £’000 £’000 £’000 £’000 £’000
USdollar 12,664 (651) – 36 12,049Euro 5,127 51 (1,081) 201 4,298Norwegiankrona 1,907 – – – 1,907Swissranc 2,129 193 – – 2,322 Japaneseyen 833 479 (2,266) 72 (882)Brazilianreal 4,683 2 – – 4,685
HongKongdollar 2,772 – – – 2,772SouthAricanrand 1,254 – – – 1,254Otheroverseascurrencies 7,101 246 – (68) 7,279
Totalexposuretocurrencyrisk 38,470 320 (3,347) 241 35,684Sterling 16,116 82 (2,000) 180 14,378
54,586 402 (5,347) 421 50,062
*Includesnetnon-monetaryassetso£8,000.
Cash and Bank Other debtors Net Investments deposits loans and creditors* exposure
At 30 June 2009 £’000 £’000 £’000 £’000 £’000
USdollar 14,111 4 – 45 14,160Euro 5,570 28 – 65 5,663Norwegiankrona 1,142 – – – 1,142Swissranc 1,830 53 – – 1,883 Japaneseyen 1,590 54 (1,888) (3) (247)Brazilianreal 1,180 2 – – 1,182HongKongdollar 1,448 – – – 1,448SouthAricanrand 1,049 – – – 1,049Otheroverseascurrencies 3,067 – – 4 3,071
Totalexposuretocurrencyrisk 30,987 141 (1,888) 111 29,351Sterling 9,789 2 – (77) 9,714
40,776 143 (1,888) 34 39,065
*Includesnetnon-monetaryassetso£10,000.
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21 Financial Instruments (continued)
Currency Risk SensitivityAt30June2010,isterlinghadstrengthenedby5%inrelationtoallcurrencies,withallothervariablesheldconstant,totalnetassetsandtotalreturnonordinaryactivitieswouldhavedecreasedbytheamountsshownbelow.A5%weakeningosterlingagainstall
currencies,withallothervariablesheldconstant,wouldhavehadanequalbutoppositeeectonthefnancialstatementamounts.Theanalysisisperormedonthesamebasisor2009.2010 2009
£’000 £’000
USdollar 602 708Euro 215 283Norwegiankrona 95 57Swissranc 116 94 Japaneseyen (44) (12)Brazilianreal 234 59HongKongdollar 139 72SouthAricanrand 63 52Otheroverseascurrencies 364 155
1,784 1,468
(ii) Interest Rate RiskInterestratemovementsmayaectdirectly:
• theairvalueotheinvestmentsinfxedinterestratesecurities;
• theleveloincomereceivableoncashdeposits;
• theairvalueotheCompany’sfxed-rateborrowings;and
• theinterestpayableonanyvariablerateborrowingswhichtheCompanymaytakeout.
InterestratemovementsmayalsoimpactuponthemarketvalueotheCompany’sinvestmentsoutwithfxedincomesecurities.Theeectointerestratemovementsupontheearningsoacompanymayhaveasignifcantimpactuponthevaluationothatcompany’sequity.
Thepossibleeectsonairvalueandcashowsthatcouldariseasaresultochangesininterestratesaretakenintoaccountwhen
makinginvestmentdecisionsandwhenenteringborrowingagreements.TheBoardreviewsonaregularbasistheamountoinvestmentsincashandfxedincomesecuritiesandtheincomereceivableoncashdeposits,oatingratenotesandothersimilarinvestments.
TheCompanyfnancespartoitsactivitiesthroughborrowingsatapprovedlevels.TheamountosuchborrowingsandtheapprovedlevelsaremonitoredandreviewedregularlybytheBoard.Movementsininterestrates,totheextentthattheyaectthemarketvalueotheCompany’sfxedrateborrowings,mayalsoaecttheamountbywhichtheCompany’ssharepriceisatadiscountorapremiumtothenetassetvalue.
TheinterestrateriskprofleotheCompany’sfnancialassetsandliabilitiesat30Juneisshownontheollowingpage.ThemainchangestotheinterestrateriskprofleotheCompany’sfnancialassetsduringtheyearhavebeennetsaleso£6,528,000oUKandOverseasbonds,adrawdowno€1.32millionundertheUS$5millionmulti-currencyacilitywithLloydsTSBScotland,andadrawdowno£2millionundertheone-yearacilitywithLloydsTSBScotland.
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50 ANNUAL REPORT 2010
21 Financial Instruments (continued)
Financial Assets2010 2009
Weighted Weighted
Fair Weighted average Fair Weighted averagevalue average period until value average period until£’000 interest rate maturity £’000 interest rate maturity
Fixed rate: UKbonds – – – 682 6.5% 15yearsUSdollarbonds 139 4.3% 3years 663 5.6% 15yearsEurobonds 97 5.0% 5years 878 6.8% 14years
Floating rate: UKbonds(interestratelinkedtoLIBOR) 335 2.0% 1year 396 2.0% 1yearUSdollarbonds(interestrate linkedtoUSLIBOR) 143 1.0% 40years 1,299 8.9% 1yearUSdollarbonds(interestrate
linkedtoUSCPI) – – – 1,519 1.8% 19yearsEurobonds(interestratelinkedtoEuroLIBOR) 112 8.6% 5years 127 9.5% 6years Japanesebond(interestratelinkedtoJapaneseCPI) – – – 1,145 1.4% 9years
Fixed interest collectiveinvestment schemes:CQSRigFinanceFund 563 – n/a 47 – n/aAthenaDebtOpportunitiesFund 1,303 2.9% 27years 434 4.4% 28years
Thecashdepositsgenerallycomprisecalldepositsorshorttermmoneymarketdepositswithoriginalmaturitiesolessthanthreemonths,whicharerepayableondemand.Thebenchmarkratewhichdeterminestheinterestpaymentsreceivedoncashbalancesisthebankbaserate.
Financial Liabilities 2010 2009
£’000 £’000
TheinterestrateriskprofleotheCompany’sfnancialliabilitiesat30Junewas:Fixedrate–Yendenominated 2,266 1,888Floatingrate–Eurodenominated 1,081 –Floatingrate–Sterlingdenominated 2,000 –
5,347 1,888
ThematurityprofleotheCompany’sfnancialliabilitiesat30Junewas:Inlessthanoneyear 2,000 –Inonetotwoyears(YenandEurobankloanmaturesin1year8months) 3,347 –Intwotofveyears – 1,888
5,347 1,888
Interest Rate Risk SensitivityAnincreaseo100basispointsinbondyieldsasat30June2010wouldhavedecreasedtotalnetassetsandtotalreturnonordinaryactivitiesby£7,000(2009–£396,000).Adecreaseo100basispointswouldhavehadanequalbutoppositeeect.
Anincreaseo100basispointsinbondyieldsasat30June2010wouldhavedecreasedthenetassetvaluepershare(withborrowingsatairvalue)by0.15p(2009–7.88p).Adecreaseo100basispointswouldhavehadanequalbutoppositeeect.
(iii) Other Price RiskChangesinmarketpricesotherthanthosearisingrominterestrateriskorcurrencyriskmayalsoaectthevalueotheCompany’snetassets.
TheBoardmanagesthemarketpricerisksinherentintheinvestmentportoliobyensuringullandtimelyaccesstorelevantinormationromtheInvestmentManagers.TheBoardmeetsregularlyandateachmeetingreviewsinvestmentperormance,theinvestmentportolio
andtherationaleorthecurrentinvestmentpositioningtoensureconsistencywiththeCompany’sobjectivesandinvestmentpolicies.Theportoliodoesnotseektoreproducetheindex,investmentsareselectedbaseduponthemeritoindividualcompaniesandthereoreperormancemaywelldivergeromtheshorttermuctuationsothecomparativeindex.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 51
21 Financial Instruments (continued)
Other Price Risk SensitivityFixedassetinvestmentsarevaluedatbidpriceswhichequatetotheirairvalue.AulllistotheCompany’sinvestmentsisgivenonpages17to20.Inaddition,ananalysisotheinvestmentportoliobygeographicalsplitandbroadindustrialorcommercialsectorandalisto
the30largestequityinvestmentsbytheiraggregatemarketvalueisgivenonpages10to12.103.9%(2009–86.0%)otheCompany’snetassetsareinvestedinequities.A3%increaseinquotedequityvaluationsat30June2010wouldhaveincreasedtotalassetsandtotalreturnonordinaryactivitiesby£1,560,000(2009–£1,008,000).Adecreaseo3%wouldhavehadanequalbutoppositeeect.
Liquidity RiskThisistheriskthattheCompanywillencounterdifcultyinmeetingobligationsassociatedwithfnancialliabilities.
LiquidityriskisnotsignifcantasthemajorityotheCompany’sassetsareinvestmentsinquotedsecuritiesthatarereadilyrealisable.TheBoardmonitorstheexposuretoanyoneholding.
TheCompanyhasthepowertotakeoutborrowings,whichgiveitaccesstoadditionalundingwhenrequired.TheCompany’sborrowingacilitiesaredetailedinnote12.
Credit RiskThisistheriskthataailureoacounterpartytoatransactiontodischargeitsobligationsunderthattransactioncouldresultinthe
Companysueringaloss.
Thisriskismanagedasollows:
• WheretheInvestmentManagersmakeaninvestmentinabondorothersecuritywithcreditrisk,thatcreditriskisassessedandthencomparedtotheprospectiveinvestmentreturnothesecurityinquestion.
• TheBoardregularlyreceivesinormationromtheInvestmentManagersonthecreditratingsothosebondsandothersecuritiesinwhichtheCompanyhasinvested.
• TheCompany’slistedinvestmentsareheldonitsbehalbyTheBankoNewYorkMellon,theCompany’scustodian.BankruptcyorinsolvencyothecustodianmaycausetheCompany’srightswithrespecttosecuritiesheldbythecustodiantobedelayed.TheInvestmentManagersmonitortheCompany’sriskbyreviewingthecustodian’sinternalcontrolreportsandreportingtheirfndingstotheBoard.
• InvestmenttransactionsarecarriedoutwithalargenumberobrokerswhosecreditworthinessisreviewedbytheInvestmentManagers.TransactionsareordinarilyundertakenonadeliveryversuspaymentbasiswherebytheCompany’scustodianbank
ensuresthatthecounterpartytoanytransactionenteredintobytheCompanyhasdeliveredonitsobligationsbeoreanytranserocashorsecuritiesawayromtheCompanyiscompleted.
• Transactionsinvolvingderivatives,andotherarrangementswhereinthecreditworthinessotheentityactingasbrokerorcounterpartytothetransactionislikelytobeosustainedinterest,aresubjecttorigorousassessmentbytheInvestmentManagersothecreditworthinessothatcounterparty.
• CashisonlyheldatbanksthatareregularlyreviewedbytheManagers.
Credit Risk ExposureTheexposuretocreditriskat30Junewas:
2010 2009
£’000 £’000
Fixedinterestinvestments 2,692 7,190Cashanddeposits 402 143
Debtorsandprepayments 1,378 274
4,472 7,607
NoneotheCompany’sfnancialassetsarepastdueorimpaired.
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52 ANNUAL REPORT 2010
21 Financial Instruments (continued)
Fair Value of Financial Assets and Financial LiabilitiesTheDirectorsareotheopinionthatthefnancialassetsandliabilitiesotheCompanyarestatedatairvalueinthebalancesheetwiththeexceptionolongtermborrowingswhicharestatedinaccordancewithFRS26.
2010 2009
Book Fair Book Fair
£’000 £’000 £’000 £’000
Fixedrateyenloan 2,266 2,294 1,888 1,913Floatingrateeuroloan 1,081 1,081 – –
Totallongtermborrowings 3,347 3,375 1,888 1,913
Gains and losses on hedgesAt30June2010therewerenounrecognisedgains/lossesonhedges(2009–nil).
Currencygains/lossesaretakentothecapitalreserveandarenotreectedintherevenueaccountunlesstheyareoarevenuenature.
Capital ManagementTheCompanydoesnothaveanyexternallyimposedcapitalrequirements.ThecapitalotheCompanyistheordinarysharecapitalasdetailedinnote14.Itismanagedinaccordancewithitsinvestmentpolicyinpursuitoitsinvestmentobjective,bothowhicharedetailedonpage21.Sharesmayberepurchasedasexplainedonpages27and28.
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 53
noTICe of annuaL GeneraL MeeTInG
Notice of Annual General MeetingNOTICEISHEREBYGIVENthattheAnnualGeneralMeetingoMidWyndInternationalInvestmentTrustPLCwillbeheldwithintheRegisteredOfceotheCompanyatCaltonSquare,1GreensideRow,EdinburghEH13ANonWednesday22September2010at12.00noon(the‘Meeting’)ortheollowingpurposes:
Ordinary Business
Toconsiderand,ithoughtft,passResolutions1to9(inclusive)whichwillbeproposedasordinaryresolutions:
1. ToreceiveandadopttheAnnualReportandtheFinancialStatementsotheCompanyorthefnancialyearended30June2010togetherwiththeReportsotheDirectorsandotheIndependentAuditorsthereon.
2. ToapprovetheDirectors’RemunerationReportorthefnancialyearended30June2010.
3. Todeclareafnaldividendo9.0pperordinaryshareorthefnancialyearended30June2010.
4. Tore-electMrPMSBarronasaDirectorotheCompany.
5. Tore-electMrRRJBurnsasaDirectorotheCompany.
6. Tore-electMrMCNScottasaDirectorotheCompany.
7. ToreappointScott-MoncrieasIndependentAuditorsotheCompanytoholdofceromtheconclusionotheMeetinguntiltheconclusion
othenextmeetingatwhichaccountsarelaidbeoretheCompany.8.ToauthorisetheDirectorstodeterminetheremunerationotheIndependentAuditors.
9. That,insubstitutionoranyexistingauthorityundersection80otheCompaniesAct1985(asamended)butwithoutprejudicetotheexerciseoanysuchauthoritypriortothedatehereo,theDirectorsotheCompanybeandtheyareherebygenerallyandunconditionallyauthorisedinaccordancewithSection551otheCompaniesAct2006(the‘Act’)toexerciseallthepowersotheCompanytoallotsharesintheCompanyandtograntrightstosubscribeorortoconvertanysecurityintosharesintheCompany(suchsharesandrightstogetherbeing‘Securities’)uptoanaggregatenominalvalueoupto£413,522,beingequaltoapproximately33.3%otheCompany’sissuedsharecapitalasat3August2010,tosuchpersonsandonsuchtermsastheDirectorsmaydetermine,suchauthoritytoexpireattheconclusion
othenextAnnualGeneralMeetingotheCompanyheldaterthepassingothisresolutionorontheexpiryo15monthsromthedateopassingothisresolution,whicheveristheearlier,unlesspreviouslyrevoked,variedorextendedbytheCompanyingeneralmeeting,savethattheCompanymayatanytimepriortotheexpiryothisauthoritymakeanoerorenterintoanagreementwhichwouldormightrequireSecuritiestobeallottedorgrantedatertheexpiryosuchauthorityandtheDirectorsshallbeentitledtoallotorgrantSecuritiesinpursuanceosuchanoeroragreementasisuchauthorityhadnotexpired.
Toconsiderand,ithoughtft,topassResolutions10and11asspecialresolutions:
10.That,subjecttothepassingoResolution9above(the‘Section551Resolution’),andinsubstitutionoranyexistingauthorityunderSection95(1)otheCompaniesAct1985butwithoutprejudicetotheexerciseoanysuchauthoritypriortothedatehereo,theDirectors otheCompanybeandtheyareherebygenerallyempowered,pursuanttoSections570and573otheCompaniesAct2006(the‘Act’),toallotequitysecurities(asdefnedinSection560otheAct),orcashpursuanttotheSection551Resolutionorbywayoasaleotreasuryshares,ineachcaseasiSection561(1)otheActdidnotapplytoanysuchallotmentoequitysecurities,providedthatthispower:
(a) shallbelimitedtotheallotmentoequitysecuritiesinconnection
withanoerosuchsecuritiestotheholdersoordinaryshareso25penceeachinthecapitalotheCompanyinproportion(asnearlyasmaybe)totheirrespectiveholdingsosuchsharesbutsubjecttosuchexclusions,limitsorrestrictionsorotherarrangementsastheDirectorsmaydeemnecessaryorexpedienttodealwithtreasuryshares,ractionalentitlements,recorddatesoranylegal,regulatoryorpracticalproblemsinorunderthelawsoanyterritory,ortherequirementsoanyregulatorybodyoranystockexchangeinanyterritoryorotherwisehowsoever;
(b) shallbelimitedtotheallotmentoequitysecurities(otherwisethanpursuanttosub-paragraph(a)othisresolution)uptoanaggregatenominalvalueo£124,069beingapproximately10%othenominalvalueotheissuedsharecapitalotheCompany,asat3August2010;and
TheAnnualGeneralMeetingotheCompanywillbeheldattheofcesoBaillieGiord&Co,CaltonSquare,1GreensideRow,EdinburghEH13AN,onWednesday,22September2010at12.00noon.
Iyouhaveanyqueriesastohowtovoteorhowtoattendthemeeting,pleasecalluson08000270133.
BaillieGiordmayrecordyourcall.
–
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54 ANNUAL REPORT 2010
(c) expiresattheconclusionothenextAnnualGeneralMeetingotheCompanyheldaterthepassingothisResolutionorontheexpiryo15monthsromthedateopassingothisResolution,whicheveristheearlier,savethattheCompanymay,beoresuchexpiry,makeanoerorenterintoanagreementwhichwouldormightrequireequitysecuritiestobeallottedatersuchexpiryandtheDirectorsmayallotequitysecuritiesinpursuanceoanysuchoeroragreementasithepowerconerredherebyhadnotexpired.
11.That,insubstitutionoranyexistingauthoritybutwithoutprejudicetotheexerciseoanysuchauthoritypriortothedatehereo,theCompanybeandisherebygenerallyandunconditionallyauthorisedpursuanttoSection701otheCompaniesAct2006(the‘Act’)tomakemarketpurchases(withinthemeaningoSection693(4)otheAct)oordinaryshareso25penceeachinthecapitalotheCompany(‘ordinaryshares’)insuchmanneranduponsuchtermsastheDirectorsotheCompanymayromtimetotimedetermine,providedthat:
(a) themaximumaggregatenumberoordinarysharesherebyauthorisedtobepurchasedis743,918representingapproximately14.99%otheissuedordinarysharecapitalotheCompanyasat3August2010;
(b) theminimumprice(excludingexpenses)whichmaybepaidoranyordinaryshareis25pence;
(c) themaximumprice(excludingexpenses)whichmaybepaidoranyordinaryshareshallnotbemorethanthehighero:
(i) 5percentabovetheaverageclosingpriceoanordinaryshareontheLondonStockExchangeoverthefvebusinessdaysimmediatelyprecedingthedateopurchase;and
(ii) thehigherothepriceothelastindependenttradeinordinarysharesandthehighestcurrentindependentbidorsuchsharesontheLondonStockExchange;and
(d) unlesspreviouslyvaried,revokedorrenewedbytheCompanyinageneralmeeting,theauthorityherebyconerredshallexpireattheconclusionothenextAnnualGeneralMeetingotheCompanyheldaterthepassingothisresolutionorontheexpiryo15monthsromthedateopassingothisresolution,whicheveristheearlier,savethattheCompanymay,priortosuchexpiry,enterintoacontracttopurchaseordinarysharesundersuchauthoritywhichwillormightbecompletedorexecutedwhollyorpartlyatertheexpirationosuchauthorityandmaymakeapurchaseoordinarysharespursuanttoanysuchcontract.
ByorderotheBoard
BaillieGiord&CoManagersandSecretaries19August2010
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 55
Notes1. InormationabouttheMeetingisavailableontheCompany’spage
otheManagers’websiteatwww.midwynd.co.uk
2. Asashareholderyouareentitledtoappointoneormoreproxiestoexercisealloranyoyourrightstoattend,speakandvoteattheMeeting.Youmayappointmorethanoneproxyprovidedeachproxyisappointedtoexerciserightsattachedtodierentshares.Youmaynotappointmorethanoneproxytoexercisetherightsattachedtoanyoneshare.AproxyneednotbeashareholderotheCompany.
3. AFormoProxyisenclosedandtobevalidmustbelodgedwiththeRegistrarsotheCompanyatComputershareInvestorServicesPLC,POBox82,ThePavilions,BridgewaterRoad,BristolBS996ZYorwww.eproxyappointment.comsoastoarrivenotlaterthan48hours,excludingnon-workingdays,beorethetimesetortheMeeting,oranyadjournedmeeting.AnyPoweroAttorneyoranyotherauthorityunderwhichtheFormoProxyissigned(oradulycertifedcopyo
suchpowerorauthority)mustbeincludedwiththeFormoProxy.TheappointmentoaproxywillnotpreventashareholderromsubsequentlyattendingandvotingattheMeetinginperson.
4. TherighttovoteattheMeetingisdeterminedbyreerencetotheRegisteroMembersotheCompanyasatthecloseobusinesson20September2010.
ChangestoentriesontheRegisteroMembersaterthecloseobusinesson20September2010shallbedisregardedindeterminingtherightsoanyshareholdertoattendandvoteattheMeeting.
5. Asashareholder,youhavetherighttoputquestionsattheMeetingrelatingtothebusinessbeingdealtwithattheMeeting.
6.ShareholdersparticipatingintheBaillieGiordInvestmentTrustSharePlan,Children’sSavingsPlanortheBaillieGiordInvestment
TrustISAwhowishtovoteand/orattendtheMeetingmustcompleteandreturntheenclosedreply-paidFormoDirection.
7. AnypersontowhomthisNoticeissentwhoisapersonnominatedunderSection146otheCompaniesAct2006(the‘2006Act’)toenjoyinormationrights(a‘NominatedPerson’)may,underagreementbetweenthemandtheshareholderbywhomtheywerenominated,havearighttobeappointed(ortohavesomeoneelseappointed)asaproxyortheMeeting.IaNominatedPersonhasnosuchproxyappointmentrightordoesnotwishtoexerciseittheymay,underanysuchagreement,havearighttogiveinstructionstotheshareholderastotheexerciseovotingrights.ThestatementotherightsoshareholdersinrelationtotheappointmentoproxiesinNotes2and3abovedoesnotapplytoNominatedPersons.TherightsdescribedintheseNotescanonlybeexercisedby
shareholdersotheCompany.8. Asatnoonon3August2010,thelatestpracticabledatebeore
publicationothisdocument,theCompanyhad4,962,766ordinaryshareso25peachinissue.EachordinarysharecarriestherighttoonevoteatageneralmeetingotheCompanyand,thereore,thetotalnumberovotingrightsintheCompanyasatnoonon3August2010is4,962,766.
9. CRESTmemberswhowishtoappointaproxyorproxiesbyutilisingtheCRESTelectronicproxyappointmentservicemaydosoortheMeetingandanyadjournment(s)thereobyutilisingtheproceduresdescribedintheCRESTManualontheEuroclearwebsite(www.euroclear.com/CREST).CRESTpersonalmembersorotherCRESTsponsoredmembersandthoseCRESTmemberswhohaveappointedavotingserviceprovider(s),shouldreertotheirCREST
sponsororvotingserviceprovider(s)whowillbeabletotaketheappropriateactionontheirbehal.
10.InorderoraproxyappointmentbymeansoCRESTtobevalid,theappropriateCRESTmessage(a‘CRESTProxyInstruction’)mustbeproperlyauthenticatedinaccordancewithEuroclearUKandIrelandLimited’s(‘EUI’)specifcationsandmustcontaintheinormationrequiredorsuchinstructions,asdescribedintheCRESTManual.Themessagemustbetransmittedsoastobereceivedbytheissuer’sagent(IDnumber3RA50)notlaterthan48hoursbeorethetimeappointedorholdingtheMeeting.Forthispurposethetimeoreceiptwillbetakentobethetime(asdeterminedbythetimestampappliedtothemessagebytheCRESTApplicationsHost)romwhichtheissuer’sagentisabletoretrievethemessagebyenquirytoCRESTinthemannerprescribedbyCREST.
11.CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersshouldnotethatEUIdoesnotmakeavailablespecialproceduresinCRESToranyparticularmessages.NormalsystemtimingsandlimitationswillthereoreapplyinrelationtotheinputoCRESTProxyInstructions.ItistheresponsibilityotheCRESTmemberconcernedtotake(or,itheCRESTmemberisaCREST
personalmemberorsponsoredmemberorhasappointedavotingserviceprovider(s),toprocurethathisCRESTsponsororvotingserviceprovider(s)take(s))suchactionasshallbenecessarytoensurethatamessageistransmittedbymeansotheCRESTsystembyanyparticulartime.Inthisconnection,CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersarereerred,inparticular,tothosesectionsotheCRESTManualconcerningpracticallimitationsotheCRESTsystemandtimings.
12.TheCompanymaytreatasinvalidaCRESTProxyInstructioninthecircumstancessetoutinRegulation35(5)(a)otheUncertifcatedSecuritiesRegulations2001.
13.NoDirectorhasacontractoservicewiththeCompany.CopiesoDirectors’lettersoappointmentwillbeavailableorinspectionoratleast15minutespriortotheMeetingandduringtheMeeting.
14.Itispossiblethat,pursuanttorequestsmadebyshareholdersotheCompanyunderSection527otheCompaniesAct2006(the‘2006Act’),theCompanymayberequiredtopublishonawebsiteastatementsettingoutanymatterrelatingto:(i)theauditotheCompany’saccounts(includingtheauditors’reportandtheconductotheaudit)thataretobelaidbeoretheMeeting;or(ii)anycircumstancesconnectedwithanauditorotheCompanyceasingtoholdofcesincethepreviousmeetingatwhichannualaccountsandreportswerelaidinaccordancewithSection437othe2006Act.
TheCompanymaynotrequiretheshareholdersrequestinganysuchwebsitepublicationtopayitsexpensesincomplyingwithSections527or528othe2006Act.WheretheCompanyisrequiredtoplaceastatementonawebsiteunderSection527othe2006Act,
itmustorwardthestatementtotheCompany’sauditorsnotlaterthanthetimewhenitmakesthestatementavailableonthewebsite.ThebusinesswhichmaybedealtwithatthemeetingincludesanystatementthattheCompanyhasbeenrequiredunderSection527othe2006Acttopublishonawebsite.
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56 ANNUAL REPORT 2010
Further Shareholder InformationHow to Invest
TheCompany’ssharesaretradedontheLondonStockExchange.
Theycanbeboughtbyplacinganorderwithastockbroker,byaskingaproessionaladvisertodoso,orthroughtheBaillieGiordsavingsvehicles(seepage57ordetails).IyouareinterestedininvestingdirectlyinMidWynd,youcandosoonline.Thereareanumberocompaniesoeringrealtimeonlinedealingservices–fndoutmorebyvisitingtheinvestmenttrustpagesatwww.bailliegifford.com.
Sources of Further Information on the Company
ThepriceosharesisquoteddailyintheFinancialTimesandcanalsobeoundontheBaillieGiordwebsiteatwww.bailliegifford.com ,Trustnetatwww.trustnet.co.uk andonotherfnancialwebsites.Companyactsheetsarealsoavailable
ontheBaillieGiordwebsiteandareupdatedmonthly.TheseareavailableromBaillieGiordonrequest.
Key Dates
Ordinaryshareholdersnormallyreceivetwodividendsinrespectoeachfnancialyear.AninterimdividendispaidinAprilandafnaldividendispaidinOctober.TheAGMisnormallyheldinOctober.
Capital Gains Tax
ForCapitalGainsTaxindexationpurposes,themarketvalueoanordinaryshareintheCompanyasat31March1982was52p.
Share Register Enquiries
ComputershareInvestorServicesPLCmaintainstheshareregisteronbehalotheCompany.Intheeventoqueriesregardingsharesregisteredinyourownname,pleasecontacttheRegistrarson08707071186.
Thishelplinealsooersanautomatedsel-serviceunctionality(available24hoursaday,7daysaweek)whichallowsyouto:
•hearthelatestshareprice;
•confrmyourcurrentshareholdingbalance;
•confrmyourpaymenthistory;and
•orderChangeoAddress,DividendBankMandateandStock
Transerorms.
ByquotingthereerencenumberonyoursharecertifcateyoucanalsocheckyourholdingontheRegistrars’websiteatwww-uk.computershare.com/investor.
Theyalsooeraree,securesharemanagementwebsiteservicewhichallowsyouto:
•viewyourshareportolioandseethelatestmarketpriceoyourshares;
•calculatethetotalmarketpriceoeachshareholding;
•viewpricehistoriesandtradinggraphs;
•updatebankmandatesandchangeaddressdetails;
•useonlinedealingservices;and
•paydividendsdirectlyintoyouroverseasbankaccountinyourchosenlocalcurrency.
Totakeadvantageothisservice,pleaseloginatwww-uk.computershare.com/investorandenteryourShareholderReerenceNumberandCompanyCode(thisinormationcanbe
oundonthelastdividendvoucheroryoursharecertifcate).
Dividend Reinvestment Plan
ComputershareoperateaDividendReinvestmentPlanwhichcanbeusedtobuyadditionalsharesinsteadoreceivingyourdividendviachequeorintoyourbankaccount.Forurtherinormationlogintowww-uk.computershare.com/investorandollowtheinstructionsortelephone08707071694.
Electronic Proxy Voting
Iyouholdstockinyourownnameyoucanchoosetovotebyreturningproxieselectronicallyat www.eproxyappointment.com.
IyouhaveanyquestionsaboutthisservicepleasecontactComputershareon08707071186.
Mid Wynd is an investment trust. Investment trustsoffer investors the following:
•Participationinadiversifedportoliooshares.
•Constantsupervisionbyexperiencedproessionalmanagers.
•TheCompanyisreeromcapitalgainstaxoncapitalproftsrealisedwithinitsportolio,althoughinvestorsarestillliableorcapitalgainstaxonproftswhensellingtheirinvestment.
ThefnancialstatementshavebeenapprovedbytheDirectorso
MidWyndInternationalInvestmentTrustPLC.BaillieGiordSavingsManagementLimited(‘BGSM’)istheISAManagerotheBaillieGiordInvestmentTrustISAandtheManagerotheBaillieGiordInvestmentTrustSharePlanandChildren’sSavingsPlan.BGSMiswhollyownedbyBaillieGiord&Co.BothareauthorisedandregulatedbytheFinancialServicesAuthority.BaillieGiordonlyprovidesinormationaboutitsproductsanddoesnotprovideinvestmentadvice.ThestaoBaillieGiordandMidWynd’sDirectorsmayholdsharesinMidWyndandmaybuyorsellsuchsharesromtimetotime.
Risks
Pastperormanceisnotaguidetoutureperormance.
MidWyndislistedonthestockmarket.Asaresult,thevalueotheshares,andanyincomeromthoseshares,isnotguaranteedandcouldgodownaswellasup.Youmaynotgetbacktheamount youinvested.Youshouldviewyourinvestmentaslongterm.
AsMidWyndinvestsinoverseassecurities,changesintheratesoexchangemayalsocausethevalueoyourinvestment(andanyincomeitmaypay)togodownorup.
MidWyndcanborrowmoneytomakeurtherinvestments(sometimesknownas‘gearing’).TheriskisthatwhenthismoneyisrepaidbytheCompany,thevalueotheinvestmentsmaynotbeenoughtocovertheborrowingandinterestcosts,andtheCompanywillmakealoss.
ItheCompany’sinvestmentsallinvalue,anyborrowingswillincreasetheamountothisloss.
MidWyndcanbuybackandcancelitsownshares.Therisksromborrowing,reerredtoabove,areincreasedwhentheCompanybuysbackandcancelsitsshares.
furTher sharehoLDer InforMaTIon
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MID WYND INTERNATIONAL INVESTMENT TRUST PLC 57
MidWyndcanmakeuseoderivatives.Wherederivativesareusedtocompensateorpossibleunavourablecurrencyandmarketmovementsthereisariskthatpotentialgainsmayberestrictedinarisingmarket.WherederivativesareusedorinvestmentpurposestherecouldbeahighriskolosstotheCompanyduetothelargeandquickpricemovementsothesecontracts.
MidWyndcharges50%otheinvestmentmanagementeeand50%oborrowingcoststocapitalwhichreducescapitalvalue.
Also,whereincomeislow,theremainingexpensesmaybegreaterthanthetotalincomereceived,meaningtheCompanymaynotpayadividendandthecapitalvaluewouldbeurtherreduced.
TheavourabletaxtreatmentoISAsmaychange.
Detailsootherrisksthatapplytoinvestmentinthesavingsvehiclesshownbelowarecontainedintheproductbrochures.
Baillie Gifford Savings Vehicles
BaillieGiord&CooeranumberoplansthatenableyoutobuyandholdsharesinMidWyndcost-efciently.PurchasesandsalesarenormallysubjecttoadealingpricespreadandGovernmentstampdutyo0.5%ispayableonpurchases.
Baillie Gifford’s Investment Trust Share Plan
Youcaninvestaminimumo£250orrom£30permonth.Theplanisdesignedtobeacost-eectivewayosavingonaregularorlumpsumbasis.
Baillie Gifford’s Investment Trust ISA
Youcaninvestinataxefcientwaybyinvestingaminimumo£2,000orrom£100permonthorbytranserringanISAwithavalueoatleast£2,000romyourexistingmanager.
Baillie Gifford’s Children’s Savings Plan
Acost-eectiveplantailoredespeciallytomeettherequirementstosaveorchildren.Youcaninvestaminimumo£100orrom£25permonth.
Online Management Service
YoucanalsoopenandmanageyourSharePlanand/orISAonline,throughoursecureOnlineManagementService(OMS)whichcanbeaccessedthroughtheBaillieGiordwebsiteatwww.bailliegifford.com .OMSenablesyoutoapplyor,openandadministeraBaillieGiordInvestmentTrustSharePlanorInvestmentTrustISAonline.Aswellasbeingabletoviewthedetailsoyourplanonline,theservicealsoallowsyouto:
• getcurrentvaluations;
• makelumpsuminvestments;
• switchbetweeninvestmenttrusts(exceptwherethereismorethanoneholder);
• setupadirectdebittomakeregularinvestments;and
• updatecertainpersonaldetails.
Further Information
ClientRelationsTeamBaillieGiordSavingsManagementLimited
CaltonSquare1GreensideRowEDINBURGHEH13AN
Tel:08000270133Wemayrecordyourcall
E-mail:[email protected]:www.bailliegiord.com
Fax:01312753955
At 30 June 2010 At 30 June 2009
Number % Number %
Institutions 188,123 3.8 225,488 4.5Intermediaries 1,912,803 38.6 2,134,463 42.5
Individuals 1,743,096 35.1 1,695,443 33.7BaillieGiordSharePlans/ISA 1,118,744 22.5 972,372 19.3
4,962,766 100.0 5,027,766 100.0
furTher sharehoLDer InforMaTIon
Analysis of Shareholders
8/3/2019 Mid Wynd International IT PLC
http://slidepdf.com/reader/full/mid-wynd-international-it-plc 60/60
Dict
Chairman:PMS Barron
RRJ BurnsRAR NapierMCN Scott
rgit
Computershare InvestorServices PLCPO Box 82The PavilionsBridgwater RoadBristol BS99 7NHTel: 0870 707 1186
bk
The Bank of New YorkMellon
bk
JP Morgan Cazenove10 AldermanburyLondonEC2V 7RF
Independent auditors
Scott-MoncrieffExchange Place 3Semple StreetEdinburghEH3 8BL
Company registration No. SC42651
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