Merchants Trust PLC — Interim / Quarterly Report 2014

Sep 30, 2014

HANSA, investing to create long‑term growth

Half Yearly Report Six Months Ended 30 September 2014

A warm welcome to this our Half Yearly Report to Shareholders, which continues in the new format and which, we hope, will be equally well received by Shareholders as was the last Annual Report.

The Board and its service providers have been busy over the summer months. Significant progress has been made in the re-positioning of the portfolio which was explained both in the last Annual Report and at the AGM in August this year. The Company has also implemented the Alternative Investment Fund Managers Directive, an EU sponsored regulatory initiative.

The Board, as part of its ongoing monitor of the Ocean Wilson Holdings investment, undertook a comprehensive review of and visit to the Wilson Sons operations in Brazil.

Yours sincerely

THIS DOCUMENT IS IMPORTANT and if you are a holder of Ordinary shares it requires your immediate attention. If you are in doubt as to the action you should take or the contents of this document, you should seek advice from an independent financial advisor, authorised if in the UK under the Financial Services and Markets Act 2000, or other appropriately authorised financial advisor if outside of the UK. If you have sold or transferred your Ordinary shares in the Company, you should send this document and any accompanying Form of Proxy, immediately to the purchaser or transferee; or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission as soon as practicable.

COMPANY REGISTRATION AND NUMBER: The Company is registered in England & Wales under company number 126107.

• 2 Half Yearly Report
• 2 Chairman's Report To The Shareholders
• 5 Half Year Management Report 6 Portfolio Manager's Report
• 10 Portfolio Statement
• 12 Financial Statements
• 12 Condensed Group Income Statement
• 13 Condensed Statement of Changes in Equity
• 14 Condensed Group Balance Sheet
• 15 Condensed Cash Flow Statement 16 Notes to the Condensed Financial
• Statements 20 Investor Information
• 22 Company Information

Highlights September 2014

Dividend Payments (total payments over five years to) 2005 – 2014

Half Yearly Report

Chairman's Report to the Shareholders

ALEX HAMMOND‑CHAMBERS Chairman

As Shareholders will be aware, we have adopted a new approach to our investment strategy – focusing our overseas exposure in investment specific funds rather than in the businesses of large multinational companies.

We embarked upon these changes earlier in the year, so this statement is by way of being a progress report. We have made significant progress towards achieving our initial goal of a balance of the portfolio in each of four investment silos (as we refer to them). They are Strategic, Core Regional Fund, Eclectic and Diversifying Fund and UK Equity Investments; the Portfolio Manager's Review goes into the detail of where we have got to – but in short we are almost there.

In last year's annual report, I stated that in future my statements would focus on the performance in relation to Hansa Trust's stated objective – namely long-term capital growth. So I will just state the statistics for these first six months of our current year (net asset value essentially unchanged; share prices +10% (Ordinary) and 6% ("A" Ordinary) but without comment (the Portfolio Manager's report goes into the detail) and, rather, address the detail of the long-term performance (using five years as the base for long-term). Fulfilment of that objective is, after all, what your Board of Directors is accountable to you for.

I will also comment on the Board's recent trip to Brazil, on the recently declared dividend as part of our new dividend policy, on one or two of the issues raised at the recent AGM and finally but briefly on our long-term prospects.

LONG-TERM PERFORMANCE (5 YEARS)

NET ASSET VALUE:	+37.5%	to	1,198.6p
ORD SHARE PRICE:	+27.8%	to	965.3p
"A" ORD SHARE PRICE:	+24.3%	to	929.5p
BENCHMARK:	+21.2%
FTSE ALL-SHARE INDEX:	+34.1%

Five years ago (30th September 2009) stock markets around the world had begun their recoveries from the devastation caused by the financial crisis that erupted with the bankruptcy of Lehman Brothers. Most stock markets reached their nadir in March of that year. Aided and abetted by large amounts of quantitative easing, equity and bond markets continued to rise – led by the United States (S&P 500 Index +86½%), whose economy thus far seems to have recovered best from the financial fiasco.

Our own net asset value has risen by 37½% over the last five years and, if dividends paid are added in, a total return of 48% has been earned. By comparison, our benchmark produced a total return of 21¼%. Without getting too excited about these numbers, I think it is fair to say that the objective has been met and that they are reasonable results.

Over the same time the share prices of the two classes of shares – the Ordinary Shares and the "A" Ordinary Shares – rose respectively by 27.8% and 24.3% – rather less than the net asset value and resulting in a rise in the discounts to 19.5% and 22.4% respectively. I should note that the discounts have fallen since the beginning of this financial year – having been 26.6% and 26.8% respectively.

The stock markets most affecting our net asset value over the period were those of the UK (+34%) and, in theory at least, of Brazil (-37½% expressed in £s). In the event the rise in our own net asset value was aided by a rise in the share price of Ocean Wilsons (+39%), which completely bucked the decline that the Brazilian Index and the Real suffered. Brazil's stock market, a former favourite of emerging market investors, peaked at the end of 2011 as commodity prices started to decline and as its economic growth started to slow.

The contribution to the rise in net asset value between the holding in Ocean Wilsons ("OWH") and the rest of the portfolio is shown in the following table:

HT NAV	Rest of Portfolio NAV	OWH per HT share	Total NAV
Sep-09	561.8p	309.8p	871.6p
Sep-14	768.0p	430.6p	1,198.6p
	+206.2p	+120.8p	+327.0p
	+36.7%	+39.0%	+37.5%

Fixed interest securities, direct beneficiaries of the Government's quantitative easing programme, also fared well over the period as illustrated by the 21¼% return of our benchmark (calculated as the three year average rolling rate of return of a five year UK Government Bond +2%).

VISIT TO BRAZIL

With over £100 million invested in Ocean Wilsons accounting for over 35% of the £288 million net asset value (circa

£80 million is indirectly invested into its Brazilian subsidiary, Wilson Sons), it behoves the Directors to have a good knowledge and understanding of Ocean Wilsons and of Wilson Sons. Although William Salomon is a director of both companies, all of the Directors of Hansa Trust take responsibility for the holding independently of other Ocean Wilson shareholders and – in order to do this – they must have that knowledge and understanding.

As part of fulfilling that responsibility, your Directors visit the facilities of Wilson Sons in Brazil every two to three years and meeting with its management at least once a year. We also receive regular updates on Ocean Wilsons Investments during the course of the year.

In September just past, we spent just over a week visiting Wilson Sons' container port facilities in Rio Grande and Salvador, its shipyards in Guarujá (just outside São Paulo), its oil service facilities in Niterói (just outside Rio) and the company's headquarters in Rio itself. We also attended a presentation on the political and economic prospects for Brazil. I should report that we came away from Brazil up to date with our views and understanding of Wilson Sons' operations and greatly encouraged about the company's long-term prospects.

DIVIDEND

FIRST INTERIM OF 8P PER SHARE TO BE PAID ON 28TH NOVEMBER 2014

Along with the new direction given to the portfolio strategy, we announced a new dividend policy which was stated as – "So in future and barring unforeseen circumstances, we expect to announce the year's dividends to be paid as two equal interim dividends – one in November and the other in May. From time to time there may be one-off circumstances, which give rise to an exceptional level of income, in which case we would declare a final dividend to be approved by shareholders at that year's AGM".

We have announced that, barring unforeseen circumstances, it is our intention to declare and pay two interim dividends in respect of the current year – each of 8p per share, making a total of 16p for the year as a whole. And on 22nd October 2014, we formerly declared the first interim dividend of 8p, which is to be paid on 28th November 2014.

Half Yearly Report

Chairman's Report to the Shareholders Continued

THE ANNUAL GENERAL MEETING (21ST JULY 2014)

Although I usually report to shareholders on some of the issues raised at the annual general meeting in the following annual report, it is such a long time span that we thought it better to report in the following half year statement. We always have a good turnout of shareholders which is most encouraging and we get a lot of good questions asked and issues raised. This past AGM was no exception.

While I won't attempt to go over every matter raised, I will attempt to highlight those that seem to us the ones of greatest interest generally.

The Portfolio Manager's Fees: The issue of the management fee was raised in the light of the considerable investment in different funds – there being concern that Hansa Trust was, in effect, suffering double portfolio management charges. We responded that (i) that all equities suffer management costs, so that the decision to invest depends on the Portfolio Manager's assessment and judgement of an equity's future "after-management-costs" returns; (ii) the level of fees is reviewed once a year at the time that the portfolio management contract is reviewed and (iii) that they will be reviewed again next year at which time this issue will be raised. Shareholders were also reminded that no management charge is levied on the value of the Ocean Wilsons holding.

Ocean Wilsons: We are asked a lot of questions about Ocean Wilsons because of the size of the investment and because Hansa Trust is its largest shareholder (26½%). We are always very careful in our response to emphasise that the Board is not privy to inside information, knowing just that which is in the public domain. We do not seek to tell the board of Ocean Wilsons what to do any more than we do the board of any other of our portfolio companies – in particular in relation to its dividend policy and its investment portfolio (both issues were raised at the AGM).

The Discount and Share Buy Backs: Given the large discount that has prevailed during the last three or so years, the issue of what the Board is doing about reducing the discount and, in particular, why it isn't buying back shares was raised. I referred shareholders to the passages that in the past two annual reports where we have spelt out a number of reasons why we have not adopted a buy back policy.

LONGER-TERM PROSPECTS

The development of our investment strategy into investment in investment specific funds as a way of getting better focused exposure to the international economy and to international markets has we hope – and we certainly believe – enhanced the longer-term prospects for capital growth for Hansa Trust. Hansa Capital Partners, who are our portfolio managers, has a good deal of knowledge and experience of the world of investment funds and – most importantly – of the people who run them. Some of these funds are available to the general investing public but many are not, allowing Hansa Trust's Shareholders the chance to invest (indirectly) in funds they otherwise couldn't. Investment in these funds, in our equity holdings in our smaller UK companies and in Ocean Wilsons is a nice mix of investment opportunities and with a nice balance of risk. We believe it will do well.

The external outlook remains a bit of an enigma – with some excellent pluses (a healthy corporate world and very low global interest rates for the foreseeable future to name a couple) but with some negatives (the very uncertain long-term consequences of "quantitative easing" the expansion of central bank supplied money – on a massive scale and the continuing roller coaster growth of government debt all over the world to name another couple of issues). In our own country we have settled the potentially very serious issue of the breakup of the United Kingdom (for the moment at least) but face an important general election next year. Brazil has just had its general election, returning Dilma Rousseff and her PT Party to power. Whatever new policies emerge, we think that the development of Brazil's offshore oilfields (a huge benefit for Wilson Sons) will remain a national priority.

As I always emphasise our prospects are largely but not wholly in our own hands. We, your Directors, have confidence in the longer-term prospects for our portfolio companies and funds and that should result in good returns for Shareholders.

Alex Hammond-Chambers Chairman 27 November 2014

The Directors present their Report and Condensed Financial Statements for the six months to 30 September 2014.

THE BOARD'S OBJECTIVES

The Board's primary objective is to achieve growth of shareholders value over the medium to long term.

THE BOARD

Your Board consists of the following persons each of whom brings certain individual and complementary skills and experience to the Board's workings. Individual profiles for each member of the Board can be found in the Company's Annual Report and on our website.

Mr Hammond-Chambers (Chairman), Mr Davie, Lord Oxford, Mr Salomon, Professor Wood

BUSINESS REVIEW FOR THE SIX MONTHS TO 30 SEPTEMBER 2014

The business review, which includes an indication of important events which have occurred within the six months to 30 September 2014, are covered in the Chairman's Report to the Shareholders and the Portfolio Manager's Report.

KEY RISKS FOR THE FINANCIAL YEAR TO 31 MARCH 2015

The key risks and uncertainties relating to the six months ended 30 September 2014 and for the six months to 31 March 2015 are covered in the Chairman's Report to the Shareholders, the Portfolio Manager's Report and note 8 to the Condensed Financial Shareholders.

RELATED PARTY TRANSACTIONS

During the period, Hansa Capital Partners LLP charged investment management fees and company secretarial fees to the Company amounting to £995,000, excluding VAT (year to 31 March 2014: £1,847,000). Amounts outstanding at 30 September 2014 were £162,000 (31 March 2014: £167,000).

IMPLEMENTATION OF THE ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE ("AIFMD")

Following the worldwide financial crisis in 2008 the European Union has put in place a regulatory regime intended to provide further protection to investors, charging the regulatory authorities of each country to implement and monitor compliance with this directive. In the UK it is the responsibility of The Financial Conduct Authority.

The Directive is a large piece of legislation which intends to capture all investment structures under one common code. The UK investment trust sector, whilst already heavily regulated, has not been able to avoid complying with the Directive and as such has had to implement a further layer of regulatory compliance, with its associated costs to shareholders, which has been estimated for the Company at c £250,000 per annum.

The main administrative impact on the Company has been the appointment of two independent organisations to oversee the operations of the Company namely i) an Alternative Investment Fund Manager ("AIFM"), whose main roles are to provide various oversight duties including portfolio and risk management services and ii) a Depositary to safe guard the asset of the Company and undertake further oversight duties. Both of these organisations have a regulatory responsibility to the Company and the Shareholders, as well as fiduciary responsibility to make good losses if they are deemed negligent.

The two organisations which were appointed during the year were, as AIFM, Phoenix Fund Services (UK) Limited and, as Depositary, BNP Paribas Securities Services Limited. The Company became compliant with the Directive as of 10 June 2014.

THE BOARD'S RESPONSIBILITIES

The Board is charged by the shareholders with the responsibility for looking after the affairs of the Company. It involves the 'STEWARDSHIP' of the Company's assets and liabilities and 'THE PURSUIT OF GROWTH OF SHAREHOLDER VALUE'. These responsibilities remain unchanged from those detailed in the last Annual Report.

The Directors confirm to the best of their knowledge that:

• the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with Interna-tional Accounting Standard 34 'Interim Financial Reporting' and on a going concern basis.
• this Interim Management Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.

The above Interim Management Report including the Responsibility Statement was approved by the Board on 27 November 2014 and was signed on its behalf by:

Alex Hammond-Chambers Chairman 27 November 2014

PORTFOLIO MANAGER'S REPORT

The Great Divergence

2014 started in a rather unusual fashion. It is rare for all asset classes to rise simultaneously, since they have different underlying characteristics and there is, in consequence, a tendency for prices to move in different directions. This though is just what did not happen in the first half of the year- with equities rising by 6.2%, sovereign bonds by 5.2% and gold and oil by 10.1% and 7.1% respectively. As the third quarter progressed, however, we saw something of a return to normality. Against a backdrop of diverging economic performance, geo-political concerns and deflationary fears, markets started to behave differently with US equities rising by 0.8% in September compared to falls of 5.8% for Asia and 2.8% for the UK.

Underlying this divergence lie some important developments in the evolution of the stock market cycle.

In recent years markets have been driven up by the trend towards zero interest rates. In response to the global credit crunch, monetary authorities around the world pushed rates down in an effort to kick-start the global economy. This primary objective largely failed with consumers and business choosing to rebuild their balance sheets, while a damaged banking system was reluctant to lend. Hence whilst economies started to recover, the rate of recovery was much slower than in many previous cycles. What quantitative easing ("QE") did achieve, however, was an almost universal rise in asset prices. Investors, faced with near zero returns from bank accounts and sovereign bonds, sought out higher yielding debt and moved up the risk spectrum into equities. This helped stabilise stock markets and raised asset prices generally, in addition to injecting much needed confidence into the financial system.

Increasingly, we are nearing a point where the leaders in this process – the US and the UK – are achieving growth rates that make a change in monetary policy likely.

The US is currently ending its' QE programme and commentators suggest that both the US and the UK are likely to see rates rise in 2015. In contrast, the Eurozone, which has chosen not to implement a full QE programme and has failed to restructure its banking system, is seeing growth move in the opposite direction to that of the US and the UK. It seems increasingly likely that Europe will have to implement a full QE programme to combat deflationary trends, just as the US and UK are ending theirs!

Similarly Japan, which was late to engage in QE and has much deeper rooted structural problems, is unlikely to end its programme in the foreseeable future.

MARKET IMPLICATIONS

These divergences raise some important questions for stock markets, in particular whether or not the benign backdrop of asset price rises across the board, combined with low volatility, is coming to an end.

Volatility, which, as long-term investors, is not something we are unduly worried about, has been notably low. Partly this is the result of economies moving out of the recession of 2008/09, but also there appears to be a link between QE and low volatility. With QE now ending in the US and UK, and economies diverging, it does seem likely that market volatility (short-term noise!) will start to pick-up, albeit perhaps not excessively so as we do not foresee a global recession any time soon.

Source: Bloomberg

Rising global liquidity (through low rates and QE) has undoubtedly been a key driver of higher equity prices. Whilst it is tempting to believe that any change here will lead to a fall in markets, in practice, history suggests that initial rate rises do not impact economic growth or stock markets. It is only at higher levels that rates start to impact growth and ultimately set the scene for the next recession and bear market.

Bonds are slightly more nuanced. Short-dated bonds are clearly vulnerable to a change in interest rates. Similarly, longer-dated sovereign bonds also look horrendously overvalued on any reasonable time horizon with current yields in many cases near all-time lows. The caveat to this though is the prospect of deflation. With Eurozone policymakers failing to act decisively, the probability of deflation looks ever more likely. Whilst persistent, Japanese style deflation is not our central scenario, we acknowledge that investors may well hold bonds for portfolio diversification and capital preservation purposes (rather than income maximisation), at least in the short-term.

Chart 2: Collapsing Eurozone Inflation

Source: Bloomberg / Eurostat

The Great Divergence Continued

Chart 3: US 10 Year Bond Yields are close to 140 Year Lows

Source: Thomson Reuters, Credit Suisse Research

The outlook for interest rates for corporate bonds is driven by the level of government bond yields adding in a premium for possible corporate defaults. Hence, whilst not hugely optimistic about government bond prices in the longer term, we do not worry excessively about corporate bond prices in the short-term with default rates unlikely to change dramatically in the coming months.

PORTFOLIO UPDATE……

We continue to make good progress in transitioning the Trust into its new format.

In the Core Regional Funds silo we added three new names: NTAsian Discovery, Schroder Asian Total Return and Goodhart Partners Longitude Fund: Hanjo Fund ("Hanjo Japan Fund"). NTAsian Discovery is a long-only Fund whose manager focused on identifying opportunities in emerging Asia. It is managed by two highly experienced portfolio managers, Kenneth Ng and John Thompson, who focus on identifying small and mid-sized companies with low valuations, high growth and strong cash flows. We like the fact that the managers construct a high conviction portfolio by investing in just 25 to 40 companies.

Schroder Asian Total Return is a well-established fund managed by Robin Parbrook and Lee King Fuei. The investment process is unusual in that it adopts an absolute return approach that combines a bottom-up portfolio construction with a top-down derivatives macro overlay. The resultant performance track record is excellent with a tightly controlled risk profile.

Hanjo Japan Fund is a new name to Hansa Capital Partners. Its portfolio is biased towards smaller capitalisation Japanese companies and typically holds in between 25 and 50 companies. Importantly, given the complexity of the Japanese market, the portfolio manager, Sean Lenihan, has lived in Japan for 24 years, immersing himself in the culture and language. We are generally positive on the change programme in Japan (albeit with some healthy scepticism!), viewing the aspiration to improve corporate governance, increase the focus on high returns on equity and a trend towards increased investment into equities, as positive. Even without this background, the manager's ability to identify reasonably valued shares of companies with excellent growth prospects presents opportunities for investment.

In the Eclectic/Diversifying silo we added GAM Star Technology and JLP Credit Opportunities. The technology sector has experienced a high level of volatility in 2014 with investors treating it as a geared play on markets while there have been valuation concerns in some sub-sectors. In practice the technology sector's valuation is attractive versus both its own history and other sectors, especially when growth is taken into consideration. Managed by an experienced portfolio manager, Mark Hawtin, we view the fund as an excellent way of playing the changes brought about in day-to-day life by the adoption of new technologies.

We invested in JLP Credit Opportunities fund which is focused on the debt of stressed US companies. The manager, Jeff Peskind, conducts thorough credit analysis and seeks to identify mispriced bonds of companies that, though stressed, he expects will avoid bankruptcy.

CHART 4: SILO EXPOSURE AS AT 30 SEPTEMBER 2014

To pay for these purchases, we sold a number of mainly large capitalisation UK equities, including BHP Billiton, Centrica and Experian. On the purchase side we added to the holding in Hansteen and a new holding in Hilton Foods. The latter is an extremely well managed group that acts as a supply chain manager, providing meat packaging and processing facilities to major retailers. The group is global and following a new five year agreement with Tesco in the UK will represent some 70% of Tesco's meat business.

Lastly our Strategic investment in Wilson Sons, through our holding in Ocean Wilsons Holdings, continues to make good progress. Wilson Sons is one of the largest providers of maritime services in Brazil and is at a major turning point in its evolution. Having invested around \$1bn since flotation in 2007 the group is nearing the end of this phase of capital expenditure which the company expects will result in an increase in the free cash flow.

PERFORMANCE AND OUTLOOK……

Over the six months to 30 September 2014, the reported Net Asset Value ("NAV") grew by 0.1% to 1,198.5p per share. During this period the final dividend payment for the year to 31 March 2014 was paid, representing a distribution of 0.9% of NAV (11p per share). The Benchmark returned 1.6% during the same period. The Company's Ordinary share price rose by 9.8%, while the FTSE All Share Index dropped 0.6%. The overall discount to NAV was 21.5% at 30 September 2014, although if Ocean Wilson Holdings was valued at the look through value i.e. market value of the quoted subsidiary plus the investment portfolio, the implied discount was 23.7%.

Overall, the third calendar quarter was a period of intense activity for the Hansa Trust and we are nearing an end to the restructuring programme. This, we believe, positions the portfolio well for the testing, but ultimately rewarding, conditions we see ahead.

Portfolio Statement

Portfolio Statement

as at 30 September 2014

Investments	Fair value £000	Percentage of Net Assets
UK Equity
NCC Group PLC	10,290	3.6
Hansteen Holdings PLC	7,387	2.6
BG Group PLC	6,837	2.4
Galliford Try PLC	6,630	2.3
Great Portland Estates PLC	6,395	2.2
The Weir Group PLC	6,253	2.2
Kofax Ltd	6,003	2.1
Experian PLC	5,898	2.0
UBM PLC	5,243	1.8
Goals Soccer Centres PLC	5,026	1.7
Cape PLC	4,961	1.7
BP PLC	4,534	1.6
Wolseley PLC	4,320	1.5
Hargreaves Services PLC	3,990	1.4
Brooks Macdonald Group PLC	2,712	0.9
15 other investments	7,991	2.8
Total UK Equity	94,470	32.8
Strategic
Wilson Sons (through our holding in Ocean Wilsons Holdings) *	70,543	24.5
Total Strategic	70,543	24.5
Core Regional Funds
Findlay Park American Fund	11,533	4.0
Vulcan Value Equity Fund	7,110	2.5
Adelphi European Select Equity Fund Class F	7,010	2.4
JO Hambro Capital Management Japan Fund	6,952	2.4
Select Equity Offshore Fund Class D	6,769	2.4
Schroder ISF Asian Total Return Fund Class D	5,804	2.0
CF Odey UK Absolute Return Fund	5,452	1.9
Goodhart Partners Longitude Fund: Hanjo Fund	4,400	1.5
BlackRock European Hedge Fund Class I	3,598	1.3
Prince Street Institutional Offshore Ltd	3,487	1.2
NTAsian Discovery Fund	2,520	0.9
Total Core Regional Funds	64,635	22.5

Investments Continued	Fair value £000	Percentage of Net Assets
Eclectic & Diversifying Assets
Ocean Wilsons Investments Limited (through our holding in Ocean Wilsons Holdings)*	32,805	11.4
GAM Star Technology Fund	9,242	3.2
DV4 Ltd	9,120	3.2
JLP Credit Opportunity Cayman Fund ^	5,860	2.0
DV3 Ltd	154	0.1
Total Eclectic & Diversifying Assets	57,181	19.9
Total Investments	286,829	99.7
Net current assets/(liabilities)	830	0.3
Net Assets	287,659	100.0

^ On 30 September 2014, the Trust had committed to purchasing 9,500 shares in JLP Credit Opportunity Cayman Fund. As a result, the cash in place to purchase JLP Credit Opportunity Cayman Fund is shown as a Current Asset as at 30 September 2014 in the Condensed Group Balance Sheet. All other assets are shown as Investments. The amounts shown in the statement above represent the total cost of the purchase of the stock.

*Hansa Trust owns 9,352,770 shares in Ocean Wilsons Holdings Limited ("OWHL") valued at £103,348,000 at 30 September 2014. In order to better reflect Hansa Trust's exposure to different market silos, the two subsidiaries of OWHL, Wilson Sons and Ocean Wilsons Investments Limited ("OWIL"), are shown separately above. The fair value of Hansa Trust's holding in OWHL has been apportioned across the two subsidiaries in the ratio of the latest reported NAV of OWIL, that being the NAV of OWIL shown per the 30 June 2014 OWHL accounts, to the market value of OWHL's holding in Wilson Sons, that being the bid share price of Wilson Sons multiplied by the number of shares held by OWHL at 30 September 2014.

Condensed Group Income Statement

For the six months ended 30 March 2014

	(Unaudited) Six months ended 30 September 2014		(Unaudited) Six months ended 30 September 2013			(Unaudited) Year ended 31 March 2014
	Revenue £000	Capital £000	Total £000	Revenue £000	Revenue £000	Revenue £000	Revenue £000	Capital £000	Total £000
(Losses)/gains on investments held at fair value	–	(1,020)	(1,020)	-	(2,460)	(2,460)	–	27,406	27,406
Exchange losses on currency balances	–	(32)	(32)	-	(1)	(1)	–	(23)	(23)
Investment income	5,405	–	5,405	4,923	–	4,923	6,739	–	6,739
	5,405	(1,052)	4,353	4,923	(2,461)	2,462	6,739	27,383	34,122
Investment management fees	(935)	–	(935)	(824)	–	(824)	(1,727)	–	(1,727)
Other expenses	(527)	–	(527)	(394)	–	(394)	(905)	–	(905)
	(1,462)	–	(1,462)	(1,218)	–	(1,218)	(2,632)	–	(2,632)
Profit before finance costs and taxation	3,943	(1,052)	2,891	3,705	(2,461)	1,244	4,107	27,383	31,490
Finance costs	(5)	–	(5)	(19)	–	(19)	(31)	–	(31)
Profit before taxation	3,938	(1,052)	2,886	3,686	(2,461)	1,225	4,076	27,383	31,459
Taxation	–	–	–	(4)	–	(4)	(4)	–	(4)
Profit for the period	3,938	(1,052)	2,886	3,682	(2,461)	1,221	4,072	27,383	31,455
Return per Ordinary and 'A' non-voting Ordinary share	16.4p	(4.4)p	12.0p	15.3p	(10.2)p	5.1p	17.0p	114.1p	131.1p

The Company does not have any income or expense that is not included in the Profit/(loss) for the period. Accordingly the "Profit/(loss) for the period" is also the "Total comprehensive income for the period", as defined in IAS 1 (revised) and no separate Statement of Comprehensive Income has been presented.

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

Condensed Statement of Changes in Equity

For the six months ended 30 September 2014 (Unaudited)

	Share capital £000	Capital redemption reserve £000	Retained earnings £000	Total £000
Net assets at 1 April 2014	1,200	300	285,913	287,413
Gains for the period	–	–	2,886	2,886
Dividends	–	–	(2,640)	(2,640)
Net assets at 30 September 2014	1,200	300	286,159	287,659

Condensed Statement of Changes in Equity

For the six months ended 30 September 2013 (Unaudited)

	Share capital £000	Capital redemption reserve £000	Retained earnings £000	Total £000
Net assets at 1 April 2013	1,200	300	258,408	259,908
Gains for the period	–	–	1,221	1,221
Dividends	–	–	(2,760)	(2,760)
Net assets at 30 September 2013	1,200	300	256,869	258,369

Condensed Statement of Changes in Equity

For the year ended 31 March 2014 (Audited)

	Share capital £000	Capital redemption reserve £000	Retained earnings £000	Total £000
Net assets at 1 April 2013	1,200	300	258,408	259,908
Gains for the period	–	–	31,455	31,455
Dividends	–	–	(3,950)	(3,950)
Net assets at 31 March 2014	1,200	300	285,913	287,413

Condensed Group Balance Sheet

as at 30 September 2014

	(Unaudited) 30 September 2014 £000	(Unaudited) 30 September 2013 £000	(Audited) 31 March 2014 £000
Non-current assets
Investments held at fair value through profit or loss	280,969	259,873	283,089
	280,969	259,873	283,089
Current assets
Trade and other receivables	9,302	426	3,673
Cash and cash equivalents	750	1,701	13,250
	10,052	2,127	16,923
Current liabilities
Trade and other payables	(3,362)	(3,631)	(12,599)
Net current assets/(liabilities)	6,690	(1,504)	4,324
Net assets	287,659	258,369	287,413
Capital and reserves
Called up share capital	1,200	1,200	1,200
Capital redemption reserve	300	300	300
Retained earnings	286,159	256,869	285,913
Total equity shareholders' funds	287,659	258,369	287,413
Net asset value per Ordinary and 'A' non-voting Ordinary share	1,198.5p	1,076.5p	1,197.5p

Condensed Cash Flow Statement

For the six months ended 30 September 2014

	(Unaudited) Six months ended 30 September 2014 £000	(Unaudited) Six months ended 30 September 2013 £000	(Audited) Year ended 31 March 2014 £000
Cash flows from operating activities
Gain before finance costs and taxation	2,891	1,244	31,490
Adjustments for:
Realised (gains)/losses on investments	(5,480)	2,772	(131)
Unrealised losses/(gains) on investments	6,500	(312)	(27,275)
Effect of foreign exchange rate changes	32	1	23
(Increase)/decrease in trade and other receivables	(2,393)	13	(3,234)
(Decrease)/increase in trade and other payables	(19)	(29)	21
Taxes paid	–	(4)	(4)
Purchase of non - current investments	(67,566)	(1,073)	(8,273)
Sale of non - current investments	53,112	1,143	27,311
Net cash (outflow)/inflow from operating activities	(12,923)	3,755	19,928
Cash flows from financing activities
Interest paid on bank loans	(5)	(19)	(31)
Dividends paid	(2,640)	(2,760)	(3,950)
Drawdown/(repayment) of loans	3,100	600	(2,800)
Net cash inflow/(outflow) from financing activities	455	(2,179)	(6,781)
(Decrease)/increase in cash and cash equivalents	(12,468)	1,576	13,147
Cash and cash equivalents at 1 April	13,250	126	126
Effect of foreign exchange rate changes	(32)	(1)	(23)
Cash and cash equivalents at end of period	750	1,701	13,250

Notes to the Condensed Financial Statements

1. ACCOUNTING POLICIES

The Financial Statements of the Group have been prepared under the historical cost convention, except for the measurement at fair value of investment, and in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.

The Half-Year Financial Statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and is consistent with the basis of the accounting policies set out in the Group and Company's Annual Report and Accounts at 31 March 2014.

These Financial Statements are presented in Sterling which is the currency of the primary economic environment in which the Group operates.

2 INCOME

	(Unaudited) Six months ended 30 September 2014 £000	(Unaudited) Six months ended 30 September 2013 £000	(Audited) Year ended 31 March 2014 £000
Income from quoted investments
UK dividends	1,553	1,920	3,442
Overseas and other dividends	3,811	2,913	3,121
Property income distributions	41	90	175
	5,405	4,923	6,738
Other income
Interest receivable on AAA rated money market funds	–	–	1
	–	–	1
Total income	5,405	4,923	6,739

3 DIVIDENDS PAID

	(Unaudited) Six months ended 30 September 2014 £000	(Unaudited) Six months ended 30 September 2013 £000	(Audited) Year ended 31 March 2014 £000
Final dividend for 2014: 11.0p (2013: 11.5p)	2,640	2,760	2,760
Interim dividend for 2015 (payable November 2014): 8.0p (2014, paid in December 2013: 5.0p)	1,920	1,200	1,200
Unclaimed dividends refunded			(10)
			3,950

4 RETURN PER SHARES

The returns stated below are based on 24,000,000 shares, being the weighted average number of shares in issue during the period.

		Revenue Pence per		Capital Pence per		Total Pence per
Period	£'000	share	£'000	share	£'000	share
Six months ended 30 September 2014 (Unaudited)	3,938	16.4	(1,052)	(4.4)	2,886	12.0
Six months ended 30 September 2013 (Unaudited)	3,682	15.3	(2,461)	(10.2)	1,221	5.1
Year ended 31 March 2014 (Audited)	4,072	17.0	27,383	114.1	31,455	131.1

5 FINANCIAL INFORMATION

The financial information contained in this Half-Yearly report is not the Company's statutory accounts as defined in section 434-436 of the Companies Act 2006. The financial information for the six months ended 30 September 2014 and 30 September 2013 is not for a financial year, has not been audited or reviewed by the Auditors and has been prepared in accordance with accounting policies consistent with those set out in the Annual Report and Accounts for the year ended 31 March 2014.

The statutory accounts for the financial year ended 31 March 2014 have been delivered to the Registrar of Companies and received an audit report which was unqualified, did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498 (2), (3) and (4) of the Companies Act 2006.

The Half-Yearly financial information was approved by the Board of Directors on 27 November 2014.

6 NET ASSET VALUE PER SHARE

The Net Asset Value per share is based on the net assets attributable to equity shareholders of £287,659,000 (30 September 2013: £258,369,000; 31 March 2014: £287,413.000) and on 24,000,000 shares, being the number of shares in issue at the period ends.

7 COMMITMENTS AND CONTINGENCIES

The Company has entered into a commitment agreement with DV3 Limited, an unquoted property investment company. DV3 Ltd is in solvent liquidation and, whilst it is not expected that the liquidator will call upon the outstanding commitment of £327,438, it is expected to remain in place until the completion of the orderly winding up of the company. The value of the Company's interest at 30 September 2014 was £153,511 (30 September 2013: £339,753; 31 March 2014: £339,753).

The Company entered into a further commitment agreement with DV4 Limited, also an unquoted property investment company. The commitment was for £10m for a period of five years from 7 March 2008 and the amount outstanding at 30 September 2014 was £2,459,107 (30 September 2013: £3,161,880; 31 March 2014: £3,161,680). On 6 March 2013, DV4 agreed with investors to extend the investment period of their fund by a further two years. In order to ensure that there were no issues with this amendment, DV4 agreed with the Company, and other investors, to draw down an element of the outstanding committed capital at that time but then to immediately return these monies to investors by way of an interest free loan. In this way, DV4 felt that it had secured future use of these funds, whilst not holding the cash in its account tying up investor's cash and impacting the overall investment performance of DV4. As a result, as at 30 September 2014, £1,296,227 of committed capital remains undrawn (31 March 2014, £1,998,800) with the remaining £1,162,880 (31 March 2014, £1,162,880) being noted as called capital but loaned back to Hansa Trust. The Company has disclosed this transaction in its Financial Statements as the net investment in DV4 at 30 September 2014 of £9,120,000 (31 March 2014, £7,636,000) reflecting the substance of the investment.

8 PRINCIPAL RISKS AND UNCERTAINTIES

A review of the half year, including reference to the risks and uncertainties that existed during the period, and the outlook for the Company can be found in the Chairman's Report to the Shareholders beginning on page 2 and in the Portfolio Manager's Review beginning on page 6. The principal financial and related risks faced by the Company fall into the following broad categories: market price risk; interest rate risk; portfolio performance; operational and regulatory risk; credit risk; liquidity risk; investment management key person risk; availability of bank finance; inability to maintain a progressive dividend policy. Information on each of these areas, with the exception of the availability of bank finance and the Board's ability to maintain a progressive dividend policy, is given in the Business Review within the Annual Report and Accounts for the year ended 31 March 2014. The risk associated with the availability of bank finance is that the provider or any other lender may no longer be prepared to lend to the Company. Copies of the monthly loan covenant compliance certificates, provided for the lender, are circulated to the Board and both the Board and the Investment Manager are kept fully informed of any likelihood of the withdrawal of the loan facility so that repayment can be effected in an orderly fashion if necessary. With regard to the Company's dividend policy, the Board regularly reviews the Company's portfolio and also income forecasts prepared by the Manager; regular reports on the Company's income position are also made by the Company's Investment Manager at each Board meeting.

In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review.

Notes to the Condensed Financial Statements

9 FAIR VALUE HIERARCHY

Fair Value Hierarchy

IFRS 13 'Fair Value Measurement' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (as prices) or indirectly (derived from prices); and
• Level 3: inputs for the asset or liability not based on observable market data (unobservable inputs).

The financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy, valued in accordance with the accounting policies in Note 1, are detailed below:

30 September 2014	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Financial assets at fair value through profit or loss
Quoted equities	271,695	–	–	271,695
Unquoted equities	–	–	9,274	9,274
Net fair value	271,695	–	9,274	280,969

31 March 2014	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Financial assets at fair value through profit or loss
Quoted equities	275,113	–	–	275,113
Unquoted equities	–	–	7,976	7,976
Net fair value	275,113	–	7,976	283,089

There have been no transfers during the year between levels 1 and 2.

The Group's policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer occurred.

A reconciliation of fair value measurements in Level 3 is set out in the following table:

	September 2014 Equity investments £000	March 2014 Equity investments £000
Opening Balance	7,976	6,892
Purchases	702	312
Sales	(145)	(116)
Total gains or losses included in gains on investments in the income statement:
– on assets sold	23	116
– on assets held at year end	718	772
Closing Balance	9,274	7,976

As at 30 September 2014, the investment in DV3 Ltd has been classified as Level 3. The investment has been valued at the estimated net asset value, as at 31 December 2013, adjusted for any further drawdowns, distributions or redemptions between the valuation date and the 30 September 2014. There was a distribution during September 2014 and the value of the asset was reduced by £145,103 of the distribution to the current reported value of £153,511 accordingly. The investment is in solvent liquidation and issues valuation statements periodically. It is believed that the value of DV3 as at 30 September 2014 will not be materially different from the adjusted reported value. If the value of the investment was to increase or decrease by 10%, while all other variables had remained constant, the return and net assets attributable to Shareholders for the period ended 30 September 2014 would have increased/decreased by £15,351.

As at 30 September 2014, the investment in DV4 Ltd has been classified as Level 3. The investment has been valued using the most recent estimated net asset value as advised to the Company by DV4 adjusted for any further drawdowns, distributions or redemptions between the valuation date and the 30 September 2014. The most recent valuation statement was received on 12 September 2014, with an estimated net asset value based on the unaudited Financial Statements of DV4 as at 30 June 2014. It is believed that the value of DV4 as at 30 September 2014 will not be materially different. If the value of the investment was to increase or decrease by 10%, while all other variables had remained constant, the return and net assets attributable to Shareholders for the period ended 30 September 2014 would have increased/decreased by £912,000.

INVESTOR INFORMATION

Investor Information

The Company currently manages its affairs so as to be a qualifying investment trust for NISA purposes, for both the Ordinary and 'A' non voting Ordinary shares. It is the present intention that the Company will conduct its affairs so as to continue to qualify for NISA products. In addition, the Company currently conducts its affairs so that the shares issued by Hansa Trust PLC can be recommended by Independent Financial Advisers to ordinary retail investors, in accordance with the Financial Conduct Authority's (FCA's) rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA's restrictions which apply to non-mainstream investment products, because they are shares in an investment trust.

CAPITAL STRUCTURE

The Company has 8,000,000 Ordinary shares of 5p each and 16,000,000 'A' non-voting Ordinary shares of 5p each in issue. The Ordinary shareholders are entitled to one vote per Ordinary share held. The 'A' non-voting Ordinary shares do not entitle the holders to vote or receive notice of meetings, but in all other respects they have the same rights as the Company's Ordinary shares.

CONTACT DETAILS

Hansa Trust PLC 50 Curzon Street, London W1J 7UW Telephone: +44 (0) 207 647 5750 Fax: +44 (0) 207 647 5770 Email: hansatrustenquiry@hansacap.com Website: www.hansatrust.com

The Company's website includes the following:

– Monthly Fact Sheets

• Stock Exchange Announcements
• Interim Management Statements
• Details of the Board Statements
• Annual and Half Yearly Reports
• Share Price Data Reports

Please contact the Portfolio Manager, as below, if you have any queries concerning the Company's investments or performance.

Hansa Capital Partners LLP 50 Curzon Street London W1J 7UW Telephone: +44 (0) 207 647 5750 Email: hansatrustenquiry@hansacap.com Website: www.hansagrp.com

Please contact the Registrars, as below, if you have a query about a certificated holding in the Company's shares.

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Telephone: 0871 664 0300 (Calls cost 10p per minute plus network charges) Email: ssd@capitaregistrars.com www.capitaregistrars.com

SHARE PRICE LISTINGS

The price of your shares can be found on our website and in the Financial Times under the heading Investment Companies.

In addition, share price information can be found under the following:

ISIN No Ordinary shares 'A' non-voting Ordinary shares	Code GB0007879728 GB0007879835
Sedol no Ordinary shares 'A' non-voting Ordinary shares	787972 787983
Reuters Ordinary shares 'A' non-voting Ordinary shares	HAN.L HANA.L
Bloomberg Ordinary shares 'A' non-voting Ordinary shares	HAN LN HANA LN
SEAQ Ordinary shares 'A' non-voting Ordinary shares	HAN HANA

USEFUL INTERNET ADDRESSES

Association of Investment Companies	www.theaic.co.uk
London Stock Exchange	www.londonstockexchange.com
TrustNet	www.trustnet.com
Interactive	www.iii.co.uk
Morningstar	www.morningstar.com
Edison	www.edisongroup.com

FINANCIAL CALENDAR

Company year end 31 March Preliminary full year results announced June Annual Report sent to shareholders June Annual General Meeting July Announcement of Half Yearly results November Half Yearly Report sent to shareholders December Interim dividend payments November & May Interim Management Statements January & July

INVESTOR INFORMATION

Company Information

Registered in England & Wales number: 126107

BOARD OF DIRECTORS

Alex Hammond-Chambers Jonathan Davie Raymond Oxford William Salomon Geoffrey Wood

SECRETARY AND REGISTERED OFFICE

Hansa Capital Partners LLP 50 Curzon Street London W1J 7UW

PORTFOLIO MANAGER

Hansa Capital Partners LLP 50 Curzon Street London W1J 7UW

AUDITOR

Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU

SOLICITORS

Maclay Murray & Spens LLP One London Wall London EC2Y 5AB

REGISTRAR

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

CUSTODIAN AND DEPOSITORY

BNP Paribas Securities Services 10 Harewood Avenue London NW1 6AA

STOCKBROKER

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

ADMINISTRATOR AND ALTERNATIVE INVESTMENT FUND

MANAGER Phoenix Administration Services Limited Springfield Lodge Colchester Road Chelmsford Essex CM2 5PW

Notes

Notes

Hansa Trust plc 50 Curzon Street London W1J 7UW

T: +44 (0) 207 647 5750 F : +44 (0) 207 647 5770 E: hansatrustenquiry@hansacap.com

Visit us at www.hansatrust.com