North Atlantic Smaller Companies Invesment Trust PLC

Interim / Quarterly Report • Jul 31, 2013

North Atlantic Smaller Companies Investment Trust plc Half-Yearly Report for the six months ended 31 July 2013

objective of the company and financial highlights

The objective of the Company is to provide capital appreciation through investment in a portfolio of smaller companies principally based in countries bordering the North Atlantic Ocean.

	31 July	31 January
	2013	2013	%
	(unaudited)	(audited)	Change
Net asset value per 5p Ordinary Share*: Diluted	1,824p	1,677p	8.8
Mid-market price of the 5p Ordinary Shares	1,492.5p	1,316.0p	13.4
Discount to diluted net asset value*	18.2%	21.5%
Standard & Poor's 500 Composite Index**	1,108.5	944.8	17.3
Russell 2000 Index**	687.4	568.9	20.8
FTSE All-Share Index	3,509.9	3,287.4	6.8
US Dollar/Sterling exchange rate	1.5161	1.5855	(4.4)

* Including retained revenue for the period.

** Sterling adjusted.

The cover depicts a painting by the artist Nicholas Pocock entitled 'HMS Brunswick breaking the line at the battle of the "Glorious First of June" 1794.'

© National Maritime Museum, Greenwich, London.

The Company is a member of the Association of Investment Companies.

Registered in England and Wales number 1091347

chief executive's review

During the six month period under review, the diluted net asset value of the Company rose 8.8%. This compares with a rise in the sterling adjusted Standard & Poor's Composite Index of 17.3%. Performance suffered due to the high level of cash in the portfolio and the inevitable lag from the substantial unquoted investments.
Income for the period amounted to a loss of £44,000 (31 July 2012: loss of £307,000). Consistent with past policy, the Directors do not propose to pay a dividend (31 July 2012: nil).
The quoted portfolio has generally performed well with notable successes including BBA, CVA Group and Gleeson. Bioquell and Nationwide were broadly flat. Mecom was, however, disappointing and fell significantly during the period although recent results were much better than expected. Oryx International Growth Fund rose by 10%.
Unquoted assets currently account for approximately 37% of the assets of the Fund. The principal event that occurred during the period was the successful sale of Bionostics at a premium of about 25% in excess of holding cost, and just under four times original cost.
Celsis also sold off another small subsidiary which has enabled the Company to recoup 100% of its original investment. Recent trading has been encouraging.
Sinav was successful in a lawsuit and the investment was written up to reflect this favourable outcome.
Finally, Orthoproducts is in discussions to be sold which, if successful, would result in a write up on this investment of approximately 25% and a sale at approximately four times original cost.
Equity markets have performed strongly on the back of the prospect of continuing low interest rates and modestly better than expected economic growth in both the UK and the USA. This has made it harder to find opportunities in publicly listed companies. The Company now has substantial cash reserves and is well placed to take advantage of new opportunities as they arise.

chief executive's review (continued)

Notwithstanding this, the Company's investments are for the most part performing strongly and it is expected that the Company will continue to prosper through the balance of the year.

C H B Mills Chief Executive

17 September 2013

top ten investments

as at 31 July 2013

Company		Fair value £'000	% of equity attributable to equity holders of the Company
US Treasury Bills	US Treasury Stock	48,470	16.6
Gleeson (MJ) Group PLC	UK Listed	29,750	10.2
Oryx International Growth Fund Limited*†	UK Listed	27,715	9.5
Trident Private Equity Fund III LP	UK Unquoted	21,044	7.2
Hampton Investment Properties Limited ††	UK Unquoted	14,093	4.8
Celsis AG	US Unquoted	12,864	4.4
Bioquell	UK Listed	11,457	3.9
Guinness Peat Group**	UK Listed	11,445	3.9
Assetco PLC	UK Listed	8,663	3.0
Orthoproducts Limited	UK Unquoted	8,250	2.8
		193,751	66.3

* Incorporated in Guernsey

• ** Incorporated in New Zealand
• † Oryx is accounted for in the Group accounts as an Associate under the equity method of accounting. The valuation shown above is the Group's share of Oryx's net assets. All other investments are valued at fair value.

†† Hampton Investment Properties Limited is accounted for in the Group accounts as a Subsidiary.

interim management report

investment objective	The objective of North Atlantic Smaller Companies Investment Trust PLC ("the Company") is to provide capital appreciation through investment in a portfolio of smaller companies principally based in countries bordering the North Atlantic Ocean.
material events	The Board do not consider that there were any material events during the period ended 31 July 2013.
material transactions	As referred to in the Chief Executive's review on page 1, the Company's investment in Bionostics was sold during the period under review at a premium of approximately 25% of holding cost and at four times the original cost of the investment.
risk profile	The principal risks and uncertainties for the remaining six months of the year continue to be as described in the Annual Report for the year ended 31 January 2013 on page 19 and pages 64 to 72. The principal risks arising from the Company's financial instruments are market price risk, including currency risk, liquidity risk and credit/ counterparty risk. The Directors review and agree policies with the Joint Manager, Harwood Capital LLP, for managing these risks. The policies have remained substantially unchanged in the six months since the year end.
	The Group does not have any significant exposure to credit risk arising from any one individual party. Credit risk is spread across a number of companies, each having an immaterial effect on the Group's cash flows, should a default occur. The Group assesses the credit worthiness of its debtors from time to time to ensure that they are neither past due or impaired.
	To support its investment in unquoted companies, the Group may periodically agree to guarantee all or part of the borrowings of investee companies. Provision is made for any costs that may be incurred when the Directors consider it likely that the guarantee will crystallise.
	The Group's exposure to market price risk comprises mainly movements in the value of the Group's investments. It should be noted that the prices of options tend to be more volatile than the prices of the underlying securities. The Joint Managers assess the exposure to market risk when making each investment decision and monitor the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

interim management report (continued)

	The functional and presentational currency of the Group is Sterling, and therefore, the Group's principal exposure to foreign currency risk comprises investments priced in other currencies, principally US Dollars.
	The Group invests in equities and other investments that are readily realisable.
related party transactions	These are listed in note 10 to the half yearly condensed financial statements on page 18.
CULS	On 22 March 2013, a final conversion notice was posted to all holders of the Convertible Unsecured Loan Stock 2013 ("CULS") reminding them that the final conversion date of the Stock was on 30 April 2013. The holders of 1,396,825 CULS elected to convert their stock on 30 April 2013. The remaining 158,102 units were converted at the discretion of the Trustee, The Law Debenture Trust Corporation p.l.c., on 16 May 2013, pursuant to the Trust Deed constituting the Stock dated 26 November 1993 (as amended and supplemented). Following these actions, there are no longer any units of CULS in issue. By Order of the Board The Hon. Peregrine Moncreiffe
	Chairman 17 September 2013

responsibility statement

The Directors confirm to the best of their knowledge that:

• The condensed set of financial statements contained within this half yearly financial report have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union and gives a true and fair view of the assets, liabilities, financial position and profit of the Group; and
• The half yearly financial report includes a fair review of the information required by the FCA's Disclosure and Transparency Rule 4.2.7R being disclosure of important events that have occurred during the first six months of the financial year, their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and
• The half yearly financial report includes a fair review of the information required by the FCA's Disclosure and Transparency Rule 4.2.8R being disclosure of related party transactions during the first six months of the financial year, how they have materially affected the financial position of the Company during the period and any changes therein.

The half yearly financial report was approved by the Board on 17 September 2013 and the above responsibility statement was signed on its behalf by:

The Hon. Peregrine Moncreiffe Chairman

17 September 2013

condensed consolidated statement of comprehensive income

		Six months ended		Six months ended
		31 July 2013 (unaudited)			31 July 2012
					(unaudited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Income Net gains on investments at	2,961	–	2,961	2,689	–	2,689
fair value Net losses on investment property	– –	21,780 (141)	21,780 (141)	– –	3,584 –	3,584 –
Currency exchange gains/(losses)	5	415	420	–	(195)	(195)
total income	2,966	22,054	25,020	2,689	3,389	6,078
Expenses Investment management
fee (note 2)	(1,337)	–	(1,337)	(1,108)	–	(1,108)
Other expenses Share based remuneration	(1,074) (180)	– –	(1,074) (180)	(1,221) (173)	– –	(1,221) (173)
Share of net return of associate	–	2,061	2,061	–	994	994
return before finance costs and taxation	375	24,115	24,490	187	4,383	4,570
Finance costs	(419)	–	(419)	(494)	–	(494)
return before taxation	(44)	24,115	24,071	(307)	4,383	4,076
Taxation	–	–	–	–	–	–
return for the period	(44)	24,115	24,071	(307)	4,383	4,076
return attribution to: Equity holders of the Company Non-controlling interest	(171) 127	24,160 (45)	23,989 82	(428) 121	4,383 –	3,955 121
	(44)	24,115	24,071	(307)	4,383	4,076
earnings per ordinary share (note 4)
Basic Diluted			158.4p 150.7p			27.9p 24.9p

The total column of the statement is the Statement of Comprehensive Income of the Group prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

All items in the above Statement derive from continuing operations. No operations were acquired or discontinued in the period.

condensed consolidated statement of comprehensive income (continued)

		Year ended 31 January 2013 (audited)
	Total £'000	Capital £'000	Revenue £'000
Income Net gains on investments at	5,474	–	5,474
fair value	43,682	43,682	–
Net losses on investment property	(1,507)	(1,507)	–
Currency exchange gains/(losses)	(237)	(237)	–
total income	47,412	41,938	5,474
Expenses Investment management
fee (note 2)	(3,633)	(1,417)	(2,216)
Other expenses	(2,028)	–	(2,028)
Share based remuneration	(355)	–	(355)
Share of net return of associate	5,259	5,259	–
return before finance costs and taxation	46,655	45,780	875
Finance costs	(951)	–	(951)
return before taxation	45,704	45,780	(76)
Taxation	(192)	–	(192)
return for the year	45,512	45,780	(268)
return attribution to: Equity holders of the Company Non-controlling interest	45,767 (255)	46,261 (481)	(494) 226
	45,512	45,780	(268)
earnings per ordinary share (note 4) Basic Diluted	321.0p 284.4p

All of the total comprehensive (loss)/income for the period is attributable to the owners of the Group.

The total column of the statement is the Statement of Comprehensive Income of the Group prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

All items in the above Statement derive from continuing operations. No operations were acquired or discontinued in the period.

condensed consolidated statement of changes in equity

			Share	Share
	Share	CULS	options	premium	Capital
	capital	reserve	reserve	account	reserve
	£'000	£'000	£'000	£'000	£'000
six months ended 31 July 2013 (unaudited)
31 January 2013	718	12	775	1,301	268,141
Total comprehensive income for the period	–	–	–	–	24,160
Shares purchased for cancellation	–	–	–	–	(22)
Arising on conversion of CULS	78	(12)	–	–	–
Share options expenses	–	–	180	–	–
31 July 2013	796	–	955	1,301	292,279
six months ended 31 July 2012 (unaudited)
31 January 2012	706	14	420	1,301	221,880
Total comprehensive income for the period	–	–	–	–	4,383
Arising on conversion of CULS	12	(2)	–	–	–
Share options expenses	–	–	173	–	–
31 July 2012	718	12	593	1,301	226,263
year ended 31 January 2013 (audited)
31 January 2012	706	14	420	1,301	221,880
Total comprehensive income for the year	–	–	–	–	46,261
Arising on conversion of CULS	12	(2)	–	–	–
Share option expenses	–	–	355	–	–
31 January 2013	718	12	775	1,301	268,141

condensed consolidated statement of changes in equity (continued)

Total £'000
		controlling	Revenue	redemption
		interest £'000	reserve £'000	reserve £'000
six months ended 31 July 2013 (unaudited)
274,421 31 January 2013		6,678	(3,278)	74
24,071 Total comprehensive income for the period		82	(171)	–
– (22) Shares purchased for cancellation			–	–
– 66 Arising on conversion of CULS			–	–
– 180 Share options expenses			–	–
298,716 31 July 2013		6,760	(3,449)	74
six months ended 31 July 2012 (unaudited)
228,544 31 January 2012		6,933	(2,784)	74
4,076 Total comprehensive income for the period		121	(428)	–
– 10 Arising on conversion of CULS			–	–
– 173 Share options expenses			–	–
232,803 31 July 2012		7,054	(3,212)	74
year ended 31 January 2013 (audited)
228,544 31 January 2012		6,933	(2,784)	74
45,512 Total comprehensive income for the year		(255)	(494)	–
– 10 Arising on conversion of CULS			–	–
– 355 Share option expenses			–	–
	274,421	6,678	(3,278)	74

condensed consolidated balance sheet

31 July	31 July	31 January
		2013 (audited)
£'000	£'000	£'000
		218,997
		40,111
		25,654
22	36	29
		284,791
500	1,076	498
2,685	1,353	2,362
10,319	7,760	9,462
1,170	1,170	1,170
14,674	11,359	13,492
320,041	255,360	298,283
(2,371)	(1,045)	(2,800)
–	(66)	(66)
(2,371)	(1,111)	(2,866)
317,670	254,249	295,417
(18,954)	(21,446)	(20,996)
(18,954)	(21,446)	(20,996)
(21,325)	(22,557)	(23,862)
		274,421
Investments held by Subsidiary Companies for trading	2013 (unaudited) 240,330 37,300 27,715 305,367 298,716	2012 (unaudited) 180,834 41,742 21,389 244,001 232,803

condensed consolidated balance sheet (continued)

	31 July	31 July	31 January
	2013	2012	2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
represented by:
Share capital	796	718	718
Equity component of CULS	–	12	12
Share options reserve	955	593	775
Share premium account	1,301	1,301	1,301
Capital reserve	292,279	226,263	268,141
Capital redemption reserve	74	74	74
Revenue reserve	(3,449)	(3,212)	(3,278)
total equity attributable to equity holders
of the Company	291,956	225,749	267,743
Non-controlling interest	6,760	7,054	6,678
total equity attributable to group	298,716	232,803	274,421
net asset value per ordinary share (note 5):
Basic	1,835p	1,572p	1,865p
Diluted	1,824p	1,420p	1,677p

condensed consolidated cash flow statement

	Six months	Six months	Year ended
	ended 31 July	ended 31 July	31 January
	2013	2012	2013
	(unaudited)	(unaudited)	(audited)
Note	£'000	£'000	£'000
cash flows from operating activities
Investment income received	1,207	871	1,981
Rental income received	1,366	1,408	2,877
Bank deposit interest received	–	19	20
Other income	125	353	366
Sale of investments by dealing Subsidiary	742	–	126
Investment Manager's fees paid	(1,975)	(1,180)	(2,351)
Other cash payments	(690)	(1,077)	(2,482)
cash received from operations 9	775	394	537
Bank interest paid	(419)	(489)	(943)
CULS interest paid	–	–	(8)
net cash inflow/(outflow) from
operating activities	356	(95)	(414)
cash flows from investing activities
Purchases of investments	(99,125)	(40,238)	(75,317)
Sales of investments	101,270	26,476	64,070
net cash inflow/(outflow) from investing activities	2,145	(13,762)	(11,247)
cash flows from financing activities
Repayment of fixed term borrowings	(2,042)	(424)	(874)
Repurchase of ordinary shares for cancellation	(22)	–	–
net cash outflow from financing activities	(2,064)	(424)	(874)
Increase/(decrease) in cash and cash
equivalents for the period	437	(14,281)	(12,535)
cash and cash equivalents at the start of
the period	9,462	22,200	22,200
Revaluation of foreign currency balances	420	(159)	(203)
cash and cash equivalents at the end of
the period	10,319	7,760	9,462

notes

1. a) general information

North Atlantic Smaller Companies Investment Trust plc ("NASCIT") is a Company incorporated and registered in England and Wales under the Companies Acts 1948 to 1967.

The Company operates as an investment trust company within the meaning of Section 833 of the Companies Act 2006 and has made a successful application under Regulation 5 of the Investment Trust (Approved Company) (Tax) Regulations 2011 for investment trust status to apply to all accounting periods starting on or after 1 February 2012. The Company is managed in such a way to ensure that it continues to meet the eligibility conditions contained in Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements outlined in Chapter 3 of Part 2 of the regulations.

1. b) basis of preparation

The condensed consolidated interim financial statements for the six months ended 31 July 2013 have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all financial information required for full annual financial statements and have been prepared using the accounting policies adopted in the audited financial statements for the year ended 31 January 2013. Those financial statements were prepared in accordance with International Financial Reporting Standards and with the Statement of Recommended Practice ('SORP') for Investment Companies and Venture Capital Trusts issued by the Association of Investment Companies in January 2009.

The condensed consolidated interim financial information includes the financial statements of the Company its wholly owned Subsidiary, Consolidated Venture Finance Limited and its 68.1% ownership of Hampton Investment Properties Limited, for the six months ended 31 July 2013.

1. c) going concern

The Company has adequate financial resources and no significant investment commitments and as a consequence, the Directors believe that the Company is well placed to manage its business risks successfully. After making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate available financial resources to continue in operational existence for the foreseeable future and accordingly have concluded that it is appropriate to continue to adopt the going concern basis in preparing this half yearly financial report.

2. investment management and performance fees

A Performance Fee is only payable if the investment portfolio outperforms the Sterling adjusted Standard & Poor's 500 Composite Index at the end of each financial year and is limited to a maximum payment of 0.5% of Shareholders' Funds.

In accordance with the Statement of Recommended Practice ("SORP") for investment trust companies, an amount is included in these financial statements for the Performance Fee that could be payable based on investment performance to 31 July 2013.

At that date, no Performance Fee has been accrued for in the accounts (31 July 2012: £nil; 31 January 2013: £1,344,000 plus VAT) and is allocated 100% to capital.

3. taxation

The Company has an effective tax rate of 0%. The estimated effective tax rate is 0% as investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income and thus there is no charge for corporation tax.

4. earnings per ordinary share
		Revenue			Capital
	*Net		Per	*Net		Per
	return	Ordinary	Share	return	Ordinary	Share
	£'000	Shares	pence	£'000	Shares	pence
six months ended 31 July 2013 (unaudited)
Basic return	(171)	15,143,692	(1.1)	24,160	15,143,692	159.5
CULS**	–	769,963	–	–	769,963
Diluted return	(171)	15,913,655	(1.1)	24,160	15,913,655	151.8
six months ended 31 July 2012
(unaudited)
Basic return	(428)	14,156,727	(3.0)	4,383	14,156,727	31.0
CULS***	8	1,756,325		–	1,756,325
Diluted return	(420)	15,913,052	(2.6)	4,383	15,913,052	27.5
year ended 31 January 2013
(audited)
Basic return	(494)	14,258,470	(3.5)	46,261	14,258,470	324.5
CULS***	8	1,834,771	–	–	1,834,771
Diluted return	(486)	16,093,241	(3.0)	46,261	16,093,241	287.5

Basic return per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the period.

• * Net return on ordinary activities attributable to Ordinary Shareholders.
• ** All of the remaining CULS were converted during the period to 31 July 2013. The weighted average of the CULS that could have been issued relate only to the part of the period prior to their conversion.
• *** CULS interest cost and excess of the total number of potential shares on CULS conversion over the number that could have been issued at the average market price from the conversion proceeds, as calculated in accordance with IAS 33: Earnings per share.

	Total
*Net		Per
return	Ordinary	Share
£'000	Shares	pence
			six months ended 31 July 2013 (unaudited)
23,989	15,143,692	158.4	Basic return
–	769,963		CULS**
23,989	15,913,655	150.7	Diluted return
			six months ended 31 July 2012 (unaudited)
3,955	14,156,727	27.9	Basic return
8	1,756,525		CULS***
3,963	15,913,052	24.9	Diluted return
			year ended 31 January 2013 (audited)
45,767	14,258,470	321.0	Basic return
8	1,834,771		CULS***
45,775	16,093,241	284.4	Diluted return

Basic return per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the period.

• * Net return on ordinary activities attributable to Ordinary Shareholders.
• ** All of the remaining CULS were converted during the period to 31 July 2013. The weighted average of the CULS that could have been issued relate only to the part of the period prior to their conversion.
• *** CULS interest cost and excess of the total number of potential shares on CULS conversion (applicable prior to conversion) over the number that could have been issued at the average market price from the conversion proceeds, as calculated in accordance with IAS 33: Earnings per share.

5. net asset value per ordinary share and share capital

The basic net asset value per Ordinary Share is based on net assets of £291,956,000 (31 July 2012: £225,749,000; 31 January 2013: £267,743,000) and on 15,912,434 Ordinary Shares (31 July 2012: 14,359,107; 31 January 2013: 14,359,107) being the number of Ordinary Shares in issue at the period end.

The diluted net asset value per Ordinary Share is calculated on the assumption that all 460,000 (31 July 2012: 460,000; 31 January 2013: 460,000) Share Options in-the-money were exercised at the prevailing exercise prices, giving a total of 16,372,434 issued Ordinary Shares (31 July 2012: 16,373,052; 31 January 2013: 16,374,034). For 31 July 2012 and 31 January 2013 the dilution would also have included the fact that any 2013 CULS had been fully converted at par.

During the year, 1,600 Ordinary Shares were bought back for cancellation at a cost of £22,000.

6. debenture loan – Convertible Unsecured Loan Stock ('CULS') 2013

The final conversion opportunity for the CULS units was on 30 April 2013. The CULS were convertible into Ordinary shares of 5p each at a rate of one 5p Ordinary share for every unit of 5p.

The final conversion notice was posted to loan stock holders on 22 March 2013 reminding them of their conversion rights and advising of the procedure if they chose not to convert. Holders of 1,396,825 CULS opted to convert. These were converted on 30 April 2013. The remaining 158,102 CULS were converted by the Trustee on 28 May 2013. At 31 July 2013, no CULS remain in issue.

7. share based remuneration

As at 31 July 2013 and as at the date of this report, there were a total of 460,000 options in issue with an estimated fair value of £1.1m. (31 July 2012: 460,000; 31 January 2013: 460,000). 430,000 options of which are under the 2011 options scheme and 30,000 options are under the 2012 option scheme.

8. bank loans

Hampton Investment Properties Limited has a five year facility with RBS which commenced on 2 February 2011 and is secured over the investment property. The loan bears interest at the rate of LIBOR plus 2.76%. During the period Hampton Investment Properties Limited made five repayments totalling £2,042,000, leaving a balance outstanding of £18,954,000.

9. reconciliation of total return from ordinary activities before finance costs and
taxation to cash received from operations

	Six months	Six months	Year ended
	ended 31 July	ended 31 July	31 January
	2013	2012	2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Total return from ordinary activities before
finance costs and taxation*	24,490	4,570	46,655
Gains on investments	(22,054)	(3,389)	(41,938)
Share of net return of associate	(2,061)	(994)	(5,259)
Share based remuneration	180	173	355
Depreciation	7	(5)	12
Dividends and interest reinvested	–	(53)	(117)
Decrease/(increase) in debtors and accrued income	148	98	(723)
Changes relating to investments of dealing Subsidiary	493	17	16
(Decrease)/increase in creditors and accruals	(428)	(23)	1,536
cash received from operations	775	394	537

* Including share of net return of associate.

10. related party transactions

There have been no changes to the related party arrangements or transactions as reported in the Statutory Annual Financial Report for the year ended 31 January 2013.

The Joint Manager, Harwood Capital LLP, is regarded as a related party of the Company. The amounts payable to the Joint Manager and Growth Financial Services Limited ("GFS") in respect of investment management for the six months to 31 July 2013 are as follows:

	Six months	Six months	Year ended
	ended 31 July	ended 31 July	31 January
	2013	2012	2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Annual fee	1,337	1,108	2,216
Performance fee	–	–	1,344
Irrecoverable VAT thereon	–	–	73
	1,337	1,108	3,633

In addition to the management fees disclosed above, Harwood Capital LLP is also paid an investment management related fee of £125,000 per annum.

Shareholders should also note the payments made under share based remuneration as disclosed in note 7 to these financial statements.

11. financial information

The annual financial information contained in this half yearly report does not constitute full Statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the periods ended 31 July 2013 and 31 July 2012 is not a financial year and has not been audited. The statutory accounts for the financial year ended 31 January 2013 have been delivered to the Registrar of Companies.

shareholder information

financial calendar	Preliminary results Annual Report Annual General Meeting Half yearly figures announced Half yearly Report posted	May May June September September
share price	The Company's mid-market share price is quoted daily in the Financial Times appearing under "Investment Companies".
	It also appears on:
	Bloomberg: SEAQ Ordinary Shares: Trustnet:	NAS. LN NAS www.trustnet.ltd.uk
net asset value	Harwood Capital LLP website: www.harwoodcapital.co.uk	The latest net asset value of the Company can be found on the
share dealing	Investors wishing to purchase more Ordinary Shares or dispose of all or part of their holding may do so through a stockbroker. Many banks also offer this service.
	The Company's registrars are Capita Registrars. In the event of any queries regarding your holding of shares, please contact the registrars on: 0871 664 0384, or by email on ssd@capitaregistrars.com
	Changes of name or address must be notified to the registrars in writing at:
	Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

shareholder information (continued)

Directors The Hon. P D E M Moncreiffe (Chairman) C H B Mills (Chief Executive) K Siem C L A Irby E F Gittes

Joint Manager

Harwood Capital LLP (Authorised and regulated by the Financial Conduct Authority) 6 Stratton Street Mayfair London W1J 8LD Telephone: 020 7640 3203

Financial Adviser and Stockbroker

Winterflood Investment Trusts The Atrium Building Cannon Bridge 25 Dowgate Hill London EC4R 2GA

Company Secretary and Registered Office

Bonita Guntrip ACIS 6 Stratton Street Mayfair London W1J 8LD Telephone: 020 7640 3203

Registrars

Capita Registrars 34 Beckenham Road Beckenham Kent BR3 4TU

Auditors

KPMG Audit p.l.c. 15 Canada Square London E14 5GL

Cover Image: 'HMS Brunswick breaking the line at the battle of the "Glorious First of June" 1794' Artist: Nicholas Pocock (© National Maritime Museum, Greenwich, London)