TIDMCSUZ
RNS Number : 3784W
Close UK Index Growth Fund 2012
17 November 2010
Close Assets Funds Limited
Half-Yearly Financial Report
for the period ended 30 September 2010 (Unaudited)
Close Assets Funds Limited (the "Company")
ABOUT THE COMPANY
Close Assets Funds Limited is a Guernsey incorporated, closed ended, umbrella
investment company. As at 17 November 2010, being the latest practicable date
prior to the publication of this report, its issued share capital comprises two
Management Shares issued for administrative reasons, 35,625,000 Zero Dividend
Shares ("Shares") of the Close UK Index Growth Fund 2012 and 39,375,000 Nominal
Shares. The Company has an unlimited life but the Shares are due to be redeemed
in December 2012.
Investment Objective and Policy - Close UK Index Growth Fund 2012 (the "Fund")
The investment objective of the Fund is to provide shareholders with a geared
capped exposure to the performance of the FTSE 100 Index (the "Index").
If shareholders hold their Shares to December 2012 (the "Redemption Date"), and
the End Value of the Index is higher than the Start Value, the Shares are
designed to pay to shareholders, on the Redemption Date, the Final Capital
Entitlement, which represents a return equal to four times the percentage
increase in the Index capped at 64 per cent of the Issue Price of GBP1.4864 per
Share.
The Final Capital Entitlement will comprise:
a) a Capital Amount of GBP1.4864 per Share; and
b) a Growth Amount per Share equal to four times any increase in the End Value
of the Index relative to its Start Value of 6,160.30, such percentage being
applied to the Issue Price of GBP1.4864 per Share, subject to the maximum
increase of 64 per cent of the Issue Price.
If shareholders hold their Shares until the Redemption Date and the End Value is
lower than the Start Value, the Shares are designed to repay the Issue Price of
GBP1.4864 per Share on the Redemption Date provided that the value of the Index
had not fallen below 3,080.15, being 50 per cent of the Start Value at close of
business on any Index Business Day between the Start Date of 22 November 2006
and the End Date of 22 November 2012 (both dates inclusive).
Close Assets Funds Limited (the "Company")
ABOUT THE COMPANY (continued)
If shareholders hold their Shares until the Redemption Date and if the value of
the Index has fallen below 3,080.15, being 50 per cent of the Start Value, at
close of business on any Index Business Day between the Start Date and the End
Date (an "Index Barrier Breach") and the End Value is not at least equal to the
Start Value, investors will be repaid on the Redemption Date the Issue Price as
reduced by the same percentage by which the End Value is less than the Start
Value. As at 30 September 2010 and as at the date of this report the level of
theIndex had not fallen below 3,080.15.
In accordance with the Company's investment policy for the Fund, the net
proceeds derived by the issue of Zero Dividend Shares and the sale of a Put
Option to J.P Morgan Chase Bank N.A. with a maturity date of 22 November 2012
(the "Put Option") have been invested in a portfolio of debt securities
containing embedded derivatives (the "Debt Securities") related to the Index at
prices relative to the value of the Index on 22 November 2006 of 6,160.30.
The Debt Securities were issued by financial institutions, selected by the
Manager, that, at the date of issue of the relevant Debt Security, had a rating
of at least A- or A3, as determined by Standard & Poor's Ratings Group ("S&P")
and/or Moody's Investor Services Inc. ("Moodys") respectively and was either (a)
a credit institution as defined in Article 1 of the Council Directive of 20
March 2000 relating to the taking up and pursuit of the business of credit
institutions (No. 2000/12/EC), other than an institution referred to in Article
2(3) of that Directive, if authorised by the competent authority of an EU Member
State in relation to the credit institution concerned; (b) a bank authorised in
a Member State of the European Economic Area; or (c) a bank authorised by a
signatory state (other than an EU Member State or a Member State of the European
Economic Area) to the Basle Capital Convergence Agreement of July 1988
(Switzerland, Canada, Japan and the US); or (d) an insurance undertaking,
insurance holding company or mixed-activity insurance holding company as defined
in Article 1 of the Council Directive of 27 October 1998 relating to the
supplementary supervision of insurance undertakings in an insurance group (No.
98/78/EC). At the time of writing all issuers of the Debt Securities carried an
investment grade credit rating.
Close Assets Funds Limited (the "Company")
ABOUT THE COMPANY (continued)
To avoid over-dependency on any single issuer, the Company for the account of
the Fund acquired six Debt Securities. It is not anticipated that this
portfolio of Debt Securities will be varied prior to the maturity date of the
Debt Securities other than in exceptional circumstances.
Your attention is drawn to the Schedule of Investments on pages 29 and 30 of
this half-yearly financial report, which shows the assets held by the Company
for the account of the Fund, and note 12(b) to the financial statements, which
refers to the credit risk of the issuers of these assets as at the end of the
reporting period and as at the date of this report.
In the event of a default by an issuer of a Debt Security the Company for the
account of the Fund would rank as an unsecured creditor in respect of sums due
from the issuer of such Debt Security. In such event, the Company for the
account of the Fund may (in respect of that Debt Security) receive a lesser
amount (if any) and at a different time than the proceeds anticipated at the
maturity of the relevant Debt Security. Any losses would be borne by the Company
for the account of the Fund and returns to shareholders would be significantly
adversely affected.
The Company has for the account of the Fund also sold a Put Option, the proceeds
of which sale were used to increase the amount of money available to finance the
acquisition of the Debt Securities. The performance of the Put Option is linked
to the performance of the Index. At an Index value of 6,160.30 or above at the
close of business on 22 November 2012, or if the Index has never closed below
3,080.15 during the calculation period from 22 November 2006 to 22 November 2012
(the "Calculation Period"), the Put Option will be worth GBPNil at maturity. If
the Index has closed below 3,080.15 over the Calculation Period and the Index is
still below 6,160.30 on 22 November 2012, the Put Option will be worth a
percentage of the notional value, being GBP52,953,000, equivalent to the
percentage fall in the level of the Index over the Calculation Period, such
payment payable to J.P. Morgan Chase Bank N.A. by the Company on behalf of the
Fund.
Close UK Index Growth Fund 2012 (the "Fund")
MANAGER'S REPORT
for the period ended 30 September 2010
Investment Performance
At launch, the net proceeds derived from the issue of Zero Dividend Shares of
the Fund were invested in a portfolio of Debt Securities and an option at a
price based on the level of the FTSE 100 Index at the close of business on 22
November 2006 (the "Index Start Date"), namely 6,160.3.
On 30 September 2010 the FTSE 100 Index closed at 5,548.62, a fall of 9.9% since
launch and a fall of 2.3% over the reporting period. Over the same periods, the
total market value of the Fund fell by 7.7% and rose by 3.4% respectively. As
at the reporting date the Zero Dividend Shares of the Fund were trading at a 3%
discount to net asset value.
As the Fund's investment portfolio is based upon the FTSE 100 Index, it is
possible to show the potential Final Capital Entitlements available to holders
of Zero Dividend Shares based on the closing level of the FTSE 100 Index on the
end date of 22 November 2012. These figures are for illustrative purposes only,
subject to there being no counterparty default, and do not represent forecasts
or take into account any unforeseen circumstances.
+------------------+------------------+-----------------+
| Final FTSE 100 | Net Asset Value | Net Asset Value |
| Index Level| | if FTSE 100 | if FTSE 100 |
| | Index never | Index has |
| | closes below | closed below |
| | 3080.15** | 3080.15** |
+------------------+------------------+-----------------+
| 4000 | 148.64 | 96.51 |
+------------------+------------------+-----------------+
| 4250 | 148.64 | 102.54 |
+------------------+------------------+-----------------+
| 4500 | 148.64 | 108.57 |
+------------------+------------------+-----------------+
| 4750 | 148.64 | 114.61 |
+------------------+------------------+-----------------+
| 5000 | 148.64 | 120.64 |
+------------------+------------------+-----------------+
| 5250 | 148.64 | 126.67 |
+------------------+------------------+-----------------+
| 5500 | 148.64 | 132.7 |
+------------------+------------------+-----------------+
| 5548.62* | 148.64 | 133.88 |
+------------------+------------------+-----------------+
| 5750 | 148.64 | 138.73 |
+------------------+------------------+-----------------+
| 6000 | 148.64 | 144.77 |
+------------------+------------------+-----------------+
| 6250 | 157.29 | 157.29 |
+------------------+------------------+-----------------+
| 6500 | 181.42 | 181.42 |
+------------------+------------------+-----------------+
| 6750 | 205.55 | 205.55 |
+------------------+------------------+-----------------+
| 7000 | 229.68 | 229.68 |
+------------------+------------------+-----------------+
| 7250 or over | 243.76 | 243.76 |
+------------------+------------------+-----------------+
| As at 22 November 2012
* FTSE 100 Index level at the end of the reporting
period
** On any day from 22 November 2006 to 22 November 2012
Close UK Index Growth Fund 2012 (the "Fund")
MANAGER'S REPORT
for the period ended 30 September 2009 (continued)
Market Review
The FTSE 100 Index fell by 2.3% over the reporting period as the speed of the
economic recovery in the UK and other developed countries proved to be slower
than expected.
Over the first month of the period the FTSE 100 Index hovered around 5,750
in the run up to the UK general elections. During May equity markets fell on
growing worries that the sovereign debt crisis could drag the world economy into
a second dip of recession. With fears that the banking system would not be able
to withstand sovereign defaults, financial stocks were among the biggest losers
during this period.
At the end of June poor economic newsflow cemented worries about the strains
facing governments and the financial sector, and on 1 July 2010 the FTSE 100
Index closed at 4,805.75, its lowest for the period. However optimism that
conditions weren't as bad as they seemed buoyed equity markets such that the
FTSE 100 Index closed back above the important 5,000 psychological index level
only a week later. Over the next few months, as worries began to be forgotten,
equity markets trended upwards.
Close UK Index Growth Fund 2012 (the "Fund")
MANAGER'S REPORT
for the period ended 30 September 2010 (continued)
Throughout the period the Bank of England ("BoE") maintained the UK bank base
rate at 0.5%, a historic low in the BoE's history. During the period there was
no further quantitative easing although the Monetary Policy Committee continued
to monitor the situation to see if further quantitative easing was needed.
Over the period the biggest drag on the Index was BP (-31%) whose shares tumbled
over the costs of the explosion and resulting oil spill and environmental
disaster in the Gulf of Mexico. The largest boost to the Index was from Lloyds
Banking Group plc, whose shares rose 18% over the period on a combination of
positive news and positive analyst's comments.
Market Outlook
There are mixed views over the global economic outlook for the coming months.
While some investors see the global economy continue to grow and recover from
the credit crisis, others point to a number of downside risks that may limit any
future growth or even turn the recession into a double dip either globally or
more locally in the UK.
In the UK, the task ahead is to begin the programme of austerity measures that
were announced in the coalition government's emergency budget in June. The
implementation of this fiscal adjustment was never going to be easy, and
consequently it has squeezed growth forecasts. As part of this, investors can
expect to see the impact of the VAT increase in January. Further to the VAT
hike, households are likely to spend less as they worry about the impact of
public sector cuts. In terms of credit conditions for businesses, this may well
remain tighter than previously anticipated as banks continue rebuilding their
balance sheets rather than easing borrowing conditions for their customers.
The Bank of England Monetary Policy Committee's decisions will continue to
affect equity markets, and another round of quantitative easing (QE) to counter
the impact the government spending cuts is currently being considered. If this
is indeed forthcoming then equity markets could be expected to benefit as this
QE gets factored into valuations.
Close Investments Limited
17 November 2010
Close UK Index Growth Fund 2012 (the "Fund")
INTERIM MANAGEMENT REPORT
for the period ended 30 September 2010
Detailed in the Manager's Report on pages 4 to 6 and below is a description of
important events that have occurred during the first six months of the financial
year, their impact on the performance of the Company as shown in the financial
statements and a description of the principal risks and uncertainties for the
remaining six months of the financial year.
Going Concern
Your attention is drawn to the Schedule of Investments on page 29 of this
Half-Yearly Financial Report which shows the assets held by the Company and note
12 (b) of this Half-Yearly Financial Report which refers to the credit risk of
the issuers of these assets as at the period end.
The Company currently holds for the account of the Fund six Debt Securities, the
issuers of which, as at the date of this report, all have investment grade
credit ratings ranging from Aa3 to A3 by Moody and from A+ to BBB+ by S&P. Of
particular interest, the Company for the account of the Fund holds a debt
security issued by Irish Life & Permanent ("IL&P") with a nominal value of
GBP8.8m and a fair value, as at the reporting date, of GBP8,852,532. This
represented 17.53 per cent. of the value of the Fund's net assets as at the
reporting date. On 25 June 2009, S&P announced that it lowered its long-term
counterparty credit rating on IL&P one notch from A- to BBB+ with a stable
outlook. S&P said the downgrade was due to IL&P's heavy reliance on wholesale
funding, weakening asset quality, S&P broader view that the group's banking
operations in their current format appear to have limited strategic options. As
a result of S&P's downgrade, the Board considered both the sale and the
retention of the IL&P debt security, acting in the best interests of the Fund
and its shareholders.
The Board reviewed IL&P's financial results, including its liquidity and capital
adequacy position, as well as recent research updates from the ratings agencies.
They also considered the Irish government support provided up to 30 September
2010 as well as the Irish economic outlook.
Close UK Index Growth Fund 2012 (the "Fund")
INTERIM MANAGEMENT REPORT
for the period ended 30 September 2010 (continued)
The Board also considered how the Final Capital Entitlement of the Shares might
be affected by any sale of the IL&P debt security and noted that there could be
a significant cost involved, resulting in an irreversible reduction in the
possible returns to the Fund's shareholders. On the basis of the prevailing
facts, the Board therefore concluded that it would not be in the best interests
of the Company and its shareholders to sell the IL&P debt security, but will
continue to monitor the situation.. Since then, on 21 July 2010 Moody's
downgraded the long-term debt and deposit ratings of IL&P to A3 from A2
following the one-notch downgrade of the Irish government's sovereign debt
ratings on 19 July 2010. On 6 October 2010 Moody's placed Irish Life &
Permanent's deposit and debt ratings on review for possible downgrade as the
previous day it had placed Ireland's Aa2 credit rating on review for possible
downgrade. On 29 September 2010, Ireland's parliament highlighted its
continuing support of the Irish banks by voting in favour of extending the
"Eligible Liabilities Guarantee" scheme beyond its previous deadline of 31
December 2010. In mid November 2010, the Irish government stated that it is
"fully funded" until mid-2011 and that it would go back to markets in January
2011 for further funding. Despite these statements the EU put pressure on Irish
ministers to accept an IMF and/or EU bailout, which would aid the state's
finances as well as enable it to inject capital into the country's banks. This
pressure from the EU was due to the exposure that other EU financial
institutions have to Irish banks, and also the fact that the Irish problems have
lead to increased funding spreads for other EU sovereigns such as Portugal and
Spain.
The Company for the account of the Fund also holds a debt security issued by SNS
Bank N.V ("SNS") with a nominal value of GBP8.8m and a fair value, as at the
reporting date, of GBP9,577,176. This represented 18.96 per cent. of the value
of the Fund's net assets as at the reporting date. On 4 December 2009 S&P
downgraded SNS Bank NV by one notch to A- from A with a stable outlook
(subsequently changed to negative on 28 May 2010) as a result of its expectation
that profitability at SNS Bank would continue to be relatively weak as a result
of elevated credit losses from its property finance and retail banking
activities, combined with a high net interest margin from elevated funding
costs. On 23 February 2010
Close UK Index Growth Fund 2012 (the "Fund")
INTERIM MANAGEMENT REPORT
for the period ended 30 September 2010 (continued)
Moodys downgraded the long-term senior debt rating of SNS to A3 from A2, and
assigned a negative outlook. Moody's rating action was triggered by the
significant worsening of the bank's asset quality, concerns about further losses
on residential mortgages and the decrease in the bank's profitability in 2009 in
its core business, retail banking.
The Board monitors credit risk and will consider further action if the credit
rating of an issuer falls below A3 or A- as ranked by Moody's and S&P
respectively.
In the event of a default by an issuer of a Debt Security purchased by the
Company for the account of the Fund, the Company for the account of the Fund
would rank as an unsecured creditor in respect of sums due from the issuer of
such Debt Security. In such event, the Company for the account of the Fund may
(in respect of that Debt Security) receive a lesser amount (if any) and at a
different time than the proceeds anticipated at the maturity of the Debt
Security. Any losses would be borne by the Company for the account of the Fund
and returns to shareholders would be significantly adversely affected.
As disclosed in the section headed "Investment Objective and Policy" above, the
Company has sold a Put Option to J.P. Morgan Chase Bank N.A. (the "Put Option
Counterparty"). As the Company's contingent liability under the Put Option sold
to the Put Option Counterparty will not crystallise until the Put Option's
scheduled maturity date of 22 November 2012, and as such contingent liability
would be based on the level of the FTSE 100 Index on that date, the directors do
not consider that such contingent liability would result now in the insolvency
of the Company. In addition, unless the FTSE 100 Index closes below 3,080.15
during the calculation period from 22 November 2006 to 22 November 2012, the Put
Option will expire worthless.
As disclosed in note 12(c) to the financial statements, upon the issue of Shares
in November 2006 the Company created a cash reserve (the "Expense Provision") in
the amount of 2.10% of the amount raised by the issue of such shares (the
"Initial Gross Proceeds") plus GBP500,000, such amount being estimated in the
opinion of the directors upon the advice of the Manager and the Administrator to
be sufficient to meet the operating expenses reasonably expected to be incurred
over the life of the Fund.
Close UK Index Growth Fund 2012 (the "Fund")
INTERIM MANAGEMENT REPORT
for the period ended 30 September 2010 (continued)
The performance of the investments held by the Company for the account of the
Fund over the reporting period and the outlook for the future are described in
the Manager's Report. The Company's financial position, its cash flows and
liquidity position are set out in the financial statements and the Company's
financial risk management objectives and policies, details of its financial
instruments and its exposures to market price risk, credit risk, liquidity risk,
interest rate risk and currency risk are set out in note 12 to the financial
statements.
After making enquiries, the directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern basis
in preparing this half-yearly financial report.
There were no material related party transactions which took place in the first
six months of the financial year.
This half-yearly financial report has not been audited or reviewed by auditors
pursuant to the Auditing Practices Board guidance on Review of Interim Financial
Information.
Responsibility Statement
The Board of directors jointly and severally confirm that, to the best of their
knowledge:
(a) The financial statements, prepared in accordance with International
Financial Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company; and
(b) This Interim Management Report includes or incorporates by reference:
a. An indication of important events that have occurred during the first six
months of the financial year, and their impact on the financial statements;
b. a description of the principal risks and uncertainties for the remaining
six months of the financial year;
Close UK Index Growth Fund 2012 (the "Fund")
INTERIM MANAGEMENT REPORT
for the period ended 30 September 2010 (continued)
c. confirmation that there were no related party transactions in the first six
months of the current financial year that have materially affected the financial
position or the performance of the Company during that period; and
d. changes in the related parties transactions described in the last annual
report that could have a material effect on the financial position or
performance of the Company in the first six months of the current financial
year.
Richard de la Rue Nicholas
Falla
Director
Director
Close Assets Funds Limited (the "Company")
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 September 2010
+---------------------------------+-------+-----------+----------+------------+
| | | TOTAL | | TOTAL |
+---------------------------------+-------+-----------+----------+------------+
| | | 1 Apr to | | 1 Apr to |
+---------------------------------+-------+-----------+----------+------------+
| | | 30 Sept | | 30 Sept |
| | | 2010 | | 2009 |
+---------------------------------+-------+-----------+----------+------------+
| |Notes | GBP | | GBP |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| Net movement in unrealised | | | | |
| appreciation on investments | 5 | 405,878 | | 5,997,581 |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| Net movement in unrealised | | | | |
| (appreciation) / depreciation | | (730,093) | | 9,619,602 |
| on Put Option | | | | |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| Operating expenses | 2 | (159,388) | | (158,894) |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| Net (loss) / gain for the | | | | |
| period attributable to | | (483,603) | | 15,458,289 |
| shareholders | | | | |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| | | | | |
+---------------------------------+-------+-----------+----------+------------+
| | | Pence | | Pence |
+---------------------------------+-------+-----------+----------+------------+
| (Loss) / earnings per Share for | | | | |
| the period - Basic and Diluted | 4 | (1.36) | | 43.39 |
+---------------------------------+-------+-----------+----------+------------+
In arriving at the results for the financial period, all amounts above relate to
continuing operations.
There are no recognised gains or losses for the period other than those
disclosed above.
+----------------------------------------------------------------+
| Reconciliation of (loss) / earnings per Share for investment |
| purposes to (loss) / earnings per Share per the financial |
| statements |
+----------------------------------------------------------------+
+---------------------------------+----+----------+----------+----------+
| | | Pence | | Pence |
+---------------------------------+----+----------+----------+----------+
| (Loss) / earnings per Share for | | | | |
| investment purposes | | (1.29) | | 43.46 |
+---------------------------------+----+----------+----------+----------+
| Adjustment for amortisation of | | (0.07) | | (0.07) |
| debt issue costs | | | | |
+---------------------------------+----+----------+----------+----------+
| (Loss) / earnings per Share per | | | | |
| the financial statements | | (1.36) | | 43.39 |
+---------------------------------+----+----------+----------+----------+
In accordance with International Financial Reporting Standards ("IFRS"),
expenses should be attributed to the period to which they relate.
The (loss) / earnings per Share for investment purposes represents the (loss) /
earnings per Share attributable to shareholders in accordance with the
Prospectus, which recognises all expenses of the Company up to and including the
date that the Final Capital Entitlement becomes payable.
The notes on pages 16 to 28 form an integral part of these financial statements.
Close Assets Funds Limited (the "Company")
STATEMENT OF FINANCIAL POSITION
as at 30 September 2010
+---------------------------------+-------+------------+----------+------------+
| | | TOTAL | | TOTAL |
+---------------------------------+-------+------------+----------+------------+
| | | 30 Sept | | 31 Mar |
| | | 2010 | | 2010 |
+---------------------------------+-------+------------+----------+------------+
| |Notes | GBP | | GBP |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| NON CURRENT ASSETS | | | | |
+---------------------------------+-------+------------+----------+------------+
| Unquoted financial assets | | | | |
| designated as at fair value | 5 | 57,079,074 | | 56,673,196 |
| through profit or loss | | | | |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| CURRENT ASSETS | | | | |
+---------------------------------+-------+------------+----------+------------+
| Receivables | 6 | 118,980 | | 148,887 |
+---------------------------------+-------+------------+----------+------------+
| Cash and cash equivalents | | 780,115 | | 924,896 |
+---------------------------------+-------+------------+----------+------------+
| | | 899,095 | | 1,073,783 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| CURRENT LIABILITIES | | | | |
+---------------------------------+-------+------------+----------+------------+
| Payables - due within one year | 7 | 208,129 | | 223,429 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| NET CURRENT ASSETS | | 690,966 | | 850,354 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| TOTAL ASSETS LESS CURRENT | | | | |
| LIABILITIES | | | | |
+---------------------------------+-------+------------+----------+------------+
| (excluding net assets | | | | |
| attributable to shareholders) | | 57,770,040 | | 57,523,550 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| Payables - due after one year | | | | |
| (excluding net assets | 8 | 7,259,279 | | 6,529,186 |
| attributable to shareholders) | | | | |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| NET ASSETS ATTRIBUTABLE TO | | | | |
+---------------------------------+-------+------------+----------+------------+
| SHAREHOLDERS | | 50,510,761 | | 50,994,364 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| ZERO DIVIDEND SHARES IN ISSUE | | 35,625,000 | | 35,625,000 |
+---------------------------------+-------+------------+----------+------------+
| | | | | |
+---------------------------------+-------+------------+----------+------------+
| | | Pence | | Pence |
+---------------------------------+-------+------------+----------+------------+
| NAV PER ZERO DIVIDEND SHARE | | 141.78 | | 143.14 |
+---------------------------------+-------+------------+----------+------------+
The notes on pages 16 to 28 form an integral part of these financial statements.
Close Assets Funds Limited (the "Company")
STATEMENT OF FINANCIAL POSITION (continued)
as at 30 September 2010
+----------------------------------------------------------------+
| Reconciliation of NAV per Share for investment purposes to NAV |
| per Share per the |
+----------------------------------------------------------------+
| financial statements: |
+----------------------------------------------------------------+
+---------------------------------+----+----------+----------+----------+
| | | Pence | | Pence |
+---------------------------------+----+----------+----------+----------+
| NAV per Zero Dividend Share for | | | | |
| investment | | | | |
+---------------------------------+----+----------+----------+----------+
| purposes | | 141.47 | | 142.76 |
+---------------------------------+----+----------+----------+----------+
| Adjustment for debt issue costs | | 0.31 | | 0.38 |
+---------------------------------+----+----------+----------+----------+
| NAV per Zero Dividend Share per | | | | |
| the financial | | | | |
+---------------------------------+----+----------+----------+----------+
| statements | | 141.78 | | 143.14 |
+---------------------------------+----+----------+----------+----------+
In accordance with IFRS, expenses should be attributed to the period to which
they relate.
The NAV per Share for investment purposes represents the NAV per Share
attributable to shareholders in accordance with the Prospectus, which recognises
all expenses of the Company up to and including the date that the Final Capital
Entitlement becomes payable.
The financial statements were approved by the Board of directors on 17 November
2010 and are signed on its behalf by:
Richard de la Rue Nicholas
Falla
Director
Director
The notes on pages 16 to 28 form an integral part of these financial statements.
Close Assets Funds Limited (the "Company")
STATEMENT OF CASH FLOWS
for the period ended 30 September 2010
+---------------------------------+----+-----------+----------+-------------+
| | | TOTAL | | TOTAL |
+---------------------------------+----+-----------+----------+-------------+
| | | 1 Apr to | | 1 Apr to |
+---------------------------------+----+-----------+----------+-------------+
| | | 30 Sept | | 30 Sept |
| | | 2010 | | 2009 |
+---------------------------------+----+-----------+----------+-------------+
| | | GBP | | GBP |
+---------------------------------+----+-----------+----------+-------------+
| OPERATING ACTIVITIES | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Net (loss) / gain for the | | | | |
| period attributable to | | (483,603) | | 15,458,289 |
| shareholders | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Unrealised (appreciation) / | | | | |
| depreciation on | | | | |
+---------------------------------+----+-----------+----------+-------------+
| investments | | (405,878) | | (5,997,581) |
+---------------------------------+----+-----------+----------+-------------+
| Unrealised appreciation / | | | | |
| (depreciation) on value of Put | | 730,093 | | (9,619,602) |
| Option | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Interest received | | (1,895) | | (577) |
+---------------------------------+----+-----------+----------+-------------+
| Amortisation of debt issue | | 25,109 | | 25,109 |
| costs | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Decrease in accrued expenses | | (15,300) | | (22,020) |
+---------------------------------+----+-----------+----------+-------------+
| Decrease / (increase) in | | | | |
| prepayments and | | | | |
+---------------------------------+----+-----------+----------+-------------+
| accrued income excluding debt | | 4,798 | | (283) |
| issue costs | | | | |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| NET CASH OUTFLOW FROM OPERATING | | | | |
+---------------------------------+----+-----------+----------+-------------+
| ACTIVITIES | | (146,676) | | (156,665) |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| INVESTING ACTIVITIES | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Interest received | | 1,895 | | 577 |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| NET CASH INFLOW FROM INVESTING | | | | |
+---------------------------------+----+-----------+----------+-------------+
| ACTIVITIES | | 1,895 | | 577 |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| CASH AND CASH EQUIVALENTS AT | | | | |
+---------------------------------+----+-----------+----------+-------------+
| BEGINNING OF PERIOD | | 924,896 | | 1,227,006 |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| Decrease in cash and cash | | (144,781) | | (156,088) |
| equivalents | | | | |
+---------------------------------+----+-----------+----------+-------------+
| | | | | |
+---------------------------------+----+-----------+----------+-------------+
| CASH AND CASH EQUIVALENTS AT | | | | |
| END OF | | | | |
+---------------------------------+----+-----------+----------+-------------+
| PERIOD | | 780,115 | | 1,070,918 |
+---------------------------------+----+-----------+----------+-------------+
The notes on pages 16 to 28 form an integral part of these financial statements.
Close Assets Funds Limited (the "Company")
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the
period ended 30 September 2010
+---------------------------------+----+------------+----------+------------+
| | | TOTAL | | TOTAL |
+---------------------------------+----+------------+----------+------------+
| | | 1 Apr | | 1 Apr |
| | | 2010 to | | 2009 to |
+---------------------------------+----+------------+----------+------------+
| | | 30 Sept | | 30 Sept |
| | | 2010 | | 2009 |
+---------------------------------+----+------------+----------+------------+
| | | GBP | | GBP |
+---------------------------------+----+------------+----------+------------+
| | | | | |
+---------------------------------+----+------------+----------+------------+
| Opening balance | | 50,994,364 | | 29,187,081 |
+---------------------------------+----+------------+----------+------------+
| Net (loss) / gain for the | | | | |
| period attributable to Zero | | | | |
+---------------------------------+----+------------+----------+------------+
| Dividend shareholders | | (483,603) | | 15,458,289 |
+---------------------------------+----+------------+----------+------------+
| | | | | |
+---------------------------------+----+------------+----------+------------+
| Closing balance | | 50,510,761 | | 44,645,370 |
+---------------------------------+----+------------+----------+------------+
Changes in equity for the management fund are included within the balances for
Fund 2012, but are not considered material.
The notes on pages 16 to 28 form an integral part of these financial statements.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010
1. ACCOUNTING POLICIES
The significant accounting policies adopted by the Company are as follows:
(a) Basis of Preparation and Going Concern
The financial statements have been prepared in conformity with International
Financial Reporting Standards ("IFRS") which comprise standards and
interpretations approved by the International Accounting Standards Board
("IASB") and International Financial Reporting Interpretations Committee
("IFRIC") and applicable Guernsey law. The financial statements have been
prepared on a historical cost basis except for the measurement at fair value of
financial instruments.
Changes in accounting policy and disclosure
The following Standards or Interpretations that are expected to affect the
Company have been issued but not yet adopted by the Company as shown below.
Other Standards or Interpretations issued by the IASB and the IFRIC are not
expected to affect the Company.
IFRS 9 Financial Instruments - Classification and Measurement effective for
annual periods beginning on or after 1 January 2013.
IAS 24 Related Party Disclosures - Revised definition or related parties
effective for annual periods beginning on or after 1 January 2011.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments effective
for annual periods beginning on or after 1 July 2010.
The directors have considered the above and are of the opinion that the above
Standards and Interpretations are not expected to have an impact on the
Company's financial statements except for the presentation of additional
disclosures and changes to the presentation of components of the financial
statements. These items will be applied in the first financial period for which
they are required.
(b) Taxation
The Company has been granted exemption under the Income Tax (Exempt Bodies)
(Guernsey) Ordinance, 1989 from Guernsey Income Tax, and is charged an annual
fee of GBP600.
(c) Expenses
All expenses are accounted for on an accruals basis.
(d) Debt issue costs
The debt issue costs incurred amounted to GBP300,760. Because the Zero Dividend
Shares of Fund 2012 are redeemable on or around 22 November 2012, they are
required to be classified as debt instruments under IAS 32. Consequently, issue
costs are required to be amortised over the life of the instrument.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
1. ACCOUNTING POLICIES (continued)
(e) Interest Income
Interest income is accounted for on an accruals basis.
(f) Cash and Cash equivalents
Cash at bank and short term deposits which are held to maturity are carried at
cost. Cash and cash equivalents are defined as call deposits, short term
deposits and highly liquid investments readily convertible to known amounts of
cash and subject to insignificant risk of changes in value. For the purposes of
the Statement of Cash Flow, cash and cash equivalents consist of cash and
deposits at bank.
(g) Investments
All investments have been designated as financial assets as at "fair value
through profit or loss". Investments are initially recognised on the date of
purchase at cost, being the fair value of the consideration given, excluding
transaction costs associated with the investment. After initial recognition,
investments are measured at fair value, with unrealised gains and losses on
investments and impairment of investments recognised in the Statement of
Comprehensive Income.
Fair value is the amount for which the financial instruments could be exchanged,
or a liability settled, between knowledgeable willing parties in an arms length
transaction. Fair value also reflects the credit quality of the issuers of the
financial instruments.
Valuations of the investments are based on valuations provided to the Company by
Future Value Consultants Limited (the "Calculation Agent"). These valuations
are intended to be an indication of the fair value of those investments,
including an issuer's credit risk, designed to reflect the best estimation of
the price at which they could be sold, even though there is no guarantee that a
willing buyer might be found if the Company on behalf of the Fund chose to sell
the relevant investment.
The indicative fair values of the investments are based on an approximation of
the market level of the investments. As the investments are not traded in an
active market, the indicative fair value is determined by using valuation
techniques. The Calculation Agent uses a variety of methods and makes
assumptions that are based on market conditions existing at the reporting date.
Valuation techniques used may include the use of comparable recent arm's length
transactions (where available), discounted cash flow analysis, option pricing
models and other valuation techniques commonly used by market participants.
Models use observable data, to the extent practicable. However, areas such as
credit risk, volatilities and correlations require the Calculation Agent to make
estimates. Changes in assumptions about these factors could affect the reported
fair value of financial instruments.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
1. ACCOUNTING POLICIES (continued)
(g) Investments (continued)
Different assumptions regarding these factors, combined with different valuation
techniques and models used, could lead to different valuations of the financial
instruments produced by different parties. As at the reporting date, valuation
data provided by J P Morgan Securities Limited, for the Debt Securities only,
was GBP2,564,683 (31 Mar 2010: GBP2,444,582) higher than that provided by the
Calculation Agent.
Being cognisant of current market conditions, the Company believes that the
valuations provided by the Calculation Agent comply with the definition of fair
value as defined by IFRS and are more appropriate.
The investments will be derecognised on their redemption date. Gains and losses
on the sale of investments will be taken to the Statement of Comprehensive
Income.
(h) Put Option
The Put Option was initially recognised at the fair value of the consideration
received on the date of sale, and included within Payables falling due after
more than one year. After initial recognition, the Put Option is measured at
fair value with unrealised gains and losses being recognised in the Statement of
Comprehensive Income. The Put Option will be derecognised at maturity on 22
November 2012.
(i) Trade Date Accounting
All "regular way" purchases and sales of financial assets are recognised on the
"trade date", i.e. the date that the entity commits to purchase or sell the
asset. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of the asset within the time frame generally
established by regulations or convention in the market place.
(j) Segmental Reporting
The directors are of the opinion that the Company is engaged in a single segment
of business, being investment business in the United Kingdom.
(k) Going Concern
After making enquiries, the directors have a reasonable expectation that the
Company has adequate resources to continue operational existence for the
foreseeable future. The directors believe the Company is well placed to manage
its business risks successfully despite the current economic climate.
Accordingly, the directors have adopted the going concern basis in preparing the
financial information.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
2. OPERATING EXPENSES
+----------------------------+----+----------+----------+------------+
| | | TOTAL | | TOTAL |
+----------------------------+----+----------+----------+------------+
| | | 1 Apr to | | 1 Apr to |
+----------------------------+----+----------+----------+------------+
| | | 30 Sep | | 30 Sep |
| | | 2010 | | 2009 |
+----------------------------+----+----------+----------+------------+
| | | GBP | | GBP |
+----------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------+----+----------+----------+------------+
| Amortisation of debt issue | | 25,109 | | 25,109 |
| costs | | | | |
+----------------------------+----+----------+----------+------------+
| Investment management fees | | 92,922 | | 92,922 |
| (1) | | | | |
+----------------------------+----+----------+----------+------------+
| Administration fees | | 12,284 | | 12,283 |
+----------------------------+----+----------+----------+------------+
| Directors' remuneration | | 10,058 | | 10,500 |
+----------------------------+----+----------+----------+------------+
| Registration fees | | 3,413 | | 3,390 |
+----------------------------+----+----------+----------+------------+
| Annual fees | | 13,427 | | 12,782 |
+----------------------------+----+----------+----------+------------+
| Directors' and Officers' | | 6,000 | | 5,400 |
| insurance | | | | |
+----------------------------+----+----------+----------+------------+
| Audit fees | | 4,500 | | 4,000 |
+----------------------------+----+----------+----------+------------+
| Printing and stationary | | 2,874 | | 2,189 |
+----------------------------+----+----------+----------+------------+
| Sundry costs | | 1,302 | | 2,456 |
+----------------------------+----+----------+----------+------------+
| Other operating expenses | | (10,606) | | (11,560) |
+----------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------+----+----------+----------+------------+
| | | 161,283 | | 159,471 |
+----------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------+----+----------+----------+------------+
| Less: Bank interest | | (1,895) | | (577) |
| income | | | | |
+----------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------+----+----------+----------+------------+
| | | 159,388 | | 158,894 |
+----------------------------+----+----------+----------+------------+
(1) The Manager is entitled to receive a fee from the Company at an annual rate
of 0.35% of the Initial Gross Proceeds of Fund 2012.
3. DIRECTORS' REMUNERATION
The prospectus for Close UK Index Growth Fund 2012 provided that each director
would be paid a basic fee of GBP5,000 per annum and an additional fee of
GBP3,000 per annum for the Close US Index Growth Fund 2007. Following the
maturity of Close US Index Growth Fund 2007 the Board resolved that each
director be paid an annual fee of GBP7,000 per annum, such rate to be effective
1 April 2007. In order that there be no risk that the interests of shareholders
in Fund 2012 might be impacted by this increase in directors' fees, the Manager
undertook to increase the amount of its contingent rebate by GBP6,000 per annum
and by GBP36,000 in the last financial period preceding the Redemption Date.
4. LOSS PER SHARE
Loss per Share is based on the net loss for the period attributable to
shareholders of GBP483,603 (2009: GBP15,458,289 gain) and on 35,625,000 (2009:
35,625,000) Shares, being the weighted average number of Shares in issue during
the period. There are no dilutive instruments and therefore basic and diluted
earnings per Share are identical.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
5. INVESTMENTS
+------------------------------+--+------------+----------+-------------+
| | | TOTAL | | TOTAL |
+------------------------------+--+------------+----------+-------------+
| UNQUOTED FINANCIAL ASSETS | | 30 Sept | | 31 Mar |
| | | 2010 | | 2010 |
+------------------------------+--+------------+----------+-------------+
| DESIGNATED AS AT FAIR VALUE | | | | |
+------------------------------+--+------------+----------+-------------+
| THROUGH PROFIT OR LOSS | | GBP | | GBP |
+------------------------------+--+------------+----------+-------------+
| | | | | |
+------------------------------+--+------------+----------+-------------+
| Opening portfolio cost | | 52,953,000 | | 52,953,000 |
+------------------------------+--+------------+----------+-------------+
| | | | | |
+------------------------------+--+------------+----------+-------------+
| Unrealised appreciation / | | | | |
| (depreciation) on | | | | |
+------------------------------+--+------------+----------+-------------+
| valuation brought forward | | 3,720,196 | | (5,522,517) |
+------------------------------+--+------------+----------+-------------+
| | | | | |
+------------------------------+--+------------+----------+-------------+
| Unrealised appreciation on | | | | |
| valuation for the | | | | |
+------------------------------+--+------------+----------+-------------+
| Period | | 405,878 | | 9,242,713 |
+------------------------------+--+------------+----------+-------------+
| | | | | |
+------------------------------+--+------------+----------+-------------+
| Unrealised appreciation on | | | | |
| valuation carried | | | | |
+------------------------------+--+------------+----------+-------------+
| forward | | 4,126,074 | | 3,720,196 |
+------------------------------+--+------------+----------+-------------+
| | | | | |
+------------------------------+--+------------+----------+-------------+
| Closing valuation | | 57,079,074 | | 56,673,196 |
+------------------------------+--+------------+----------+-------------+
Valuations of investments are based on valuations provided by the Calculation
Agent. The provided valuations are derived from proprietary models based upon
well-recognised financial principles and reasonable estimates about relevant
future market conditions.
To comply with the definition of fair value as defined by IFRS, the Calculation
Agent was engaged to provide valuations of the investments, taking account of
the current counterparty credit risk of the issuers of the Debt Securities held
by the Company for the account of the Fund. Details of the quantitative effect
of using different valuation providers is given in note 1(g).
All Debt Securities held by the Company for the account of the Fund have been
classified as Level 2 in accordance with the fair value hierarchy. There have
been no transfers between Level 1 and Level 2 of the fair value hierarchy during
the period under review.
The Debt Securities in the Close UK Index Growth Fund 2012's portfolio are
Sterling-denominated non-coupon and non-interest bearing medium term notes
linked to the FTSE 100 Index. They carry a maximum redemption amount of 164 per
cent of their principal amount which will be payable provided the FTSE 100 Index
rises by 16 per cent or more between 22 November 2006 and November 2012 (the
"Calculation Period"). For each percentage point rise in the FTSE 100 Index up
to a maximum of 16% over the Calculation Period the maximum redemption amount
will be increased by approximately four per cent, subject to a maximum increase
of 64%.
In the event that the FTSE 100 Index falls over the Calculation Period, the Debt
Securities are designed to return 100% of their principal amount.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
5. INVESTMENTS (continued)
Valuation data provided by the Calculation Agent to the Company is provided for
informational purposes only and does not represent an offer to buy or sell the
Debt Securities by the Calculation Agent or any other party. The valuations
provided are an indication of market levels and do not imply that they can be
sold at that valuation price. They are based on assumptions and data the
Calculation Agent considers in its judgement reasonable, but an alternative
valuer might arrive at different valuations for the same investments.
6. RECEIVABLES
+-------------------------------+----------+----------+----------+-----------+
| | | TOTAL | | TOTAL |
+-------------------------------+----------+----------+----------+-----------+
| | | 30 Sep | | 31 Mar |
| | | 2010 | | 2010 |
+-------------------------------+----------+----------+----------+-----------+
| | | GBP | | GBP |
+-------------------------------+----------+----------+----------+-----------+
| | | | | |
+-------------------------------+----------+----------+----------+-----------+
| Prepaid expenditure | | 6,594 | | 12,268 |
+-------------------------------+----------+----------+----------+-----------+
| Prepaid debt issue costs | | 107,571 | | 132,680 |
+-------------------------------+----------+----------+----------+-----------+
| Accrued bank interest | | 875 | | - |
| receivable | | | | |
+-------------------------------+----------+----------+----------+-----------+
| Sundry debtors | | 3,940 | | 3,939 |
+-------------------------------+----------+----------+----------+-----------+
| | | | | |
+-------------------------------+----------+----------+----------+-----------+
| | | 118,980 | | 148,887 |
+-------------------------------+----------+----------+----------+-----------+
7. PAYABLES (amounts falling due within one year)
+-------------------------------+----------+----------+----------+-----------+
| | | TOTAL | | TOTAL |
+-------------------------------+----------+----------+----------+-----------+
| | | 30 Sep | | 31 Mar |
| | | 2010 | | 2010 |
+-------------------------------+----------+----------+----------+-----------+
| | | GBP | | GBP |
+-------------------------------+----------+----------+----------+-----------+
| | | | | |
+-------------------------------+----------+----------+----------+-----------+
| Accrued administration fees | | 2,014 | | 2,081 |
+-------------------------------+----------+----------+----------+-----------+
| Accrued registration fees | | 500 | | 1,021 |
+-------------------------------+----------+----------+----------+-----------+
| Accrued audit fees | | 4,500 | | 9,000 |
+-------------------------------+----------+----------+----------+-----------+
| Other accrued expenses (1) | | 201,115 | | 211,327 |
+-------------------------------+----------+----------+----------+-----------+
| | | | | |
+-------------------------------+----------+----------+----------+-----------+
| | | 208,129 | | 223,429 |
+-------------------------------+----------+----------+----------+-----------+
(1) Consisting of the currently estimated surplus cash remaining in the bank
account established in respect of the ongoing, annual and redemption expenses of
each Fund after payment of all such budgeted expenses to date, which will be
payable to the Manager at the Redemption Date, as set out in the Prospectus of
each Fund, together with other accrued expenses of an immaterial amount.
8. PAYABLES (amounts falling due after one year)
+-------------------------------+----------+-----------+----------+-----------+
| | | TOTAL | | TOTAL |
+-------------------------------+----------+-----------+----------+-----------+
| | | 30 Sep | | 31 Mar |
| | | 2010 | | 2010 |
+-------------------------------+----------+-----------+----------+-----------+
| FINANCIAL LIABILITIES | | GBP | | GBP |
+-------------------------------+----------+-----------+----------+-----------+
| | | | | |
+-------------------------------+----------+-----------+----------+-----------+
| Fair value of the Put Option | | 7,259,279 | | 6,529,186 |
+-------------------------------+----------+-----------+----------+-----------+
| | | | | |
+-------------------------------+----------+-----------+----------+-----------+
| | | 7,259,279 | | 6,529,186 |
+-------------------------------+----------+-----------+----------+-----------+
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
8. PAYABLES (amounts falling due after one year) (continued)
The performance of the Put Option is linked to the performance of the FTSE 100
Index. At an Index value of 6,160.30 or above at the close of business on 22
November 2012, or if the Index has never closed below 3,080.15 during the
calculation period from 22 November 2006 to 22 November 2012 (the "Calculation
Period"), the Put Option will be worth GBPNil at maturity. If the Index has
closed below 3,080.15 over the Calculation Period and the Index is still below
6,160.30 at 22 November 2012, the Put Option will be worth a percentage of the
notional value, being GBP52,953,000, equivalent to the percentage fall in the
level of the FTSE 100 Index over the Calculation Period.
The Put Option is not exercisable until the maturity date of 22 November 2012.
The Put Option has been classified as Level 2 in accordance with the fair value
hierarchy. There have been no transfers between Level 1 and Level 2 of the fair
value hierarchy during the period under review.
The fair value of the Put Option is based on the valuation provided by the
Calculation Agent. There is no active market regarding the Put Option.
J.P. Morgan Chase Bank N.A., in its capacity as the Put Option counterparty, has
security over the financial assets held by the Company for payment of any monies
owed upon maturity or termination of the Put Option contract.
The original proceeds from the sale of the Put Option were GBP4,209,763.50.
9. SHARE CAPITAL
+--------------------------------------+----------+-------------+----------+--------+
| Authorised | | SHARES | | GBP |
+--------------------------------------+----------+-------------+----------+--------+
| | | | | |
+--------------------------------------+----------+-------------+----------+--------+
| Unclassified Shares of 0.01p each | | 200,000,000 | | 20,000 |
+--------------------------------------+----------+-------------+----------+--------+
| Management Shares of GBP1 each | | 100 | | 100 |
+--------------------------------------+----------+-------------+----------+--------+
| | | | | |
+--------------------------------------+----------+-------------+----------+--------+
| | | | | 20,100 |
+--------------------------------------+----------+-------------+----------+--------+
+----------------+------------+----------+------------+----------+------------+----------+------------+
| Issued | Management | | Nominal | | FUND | | |
+----------------+------------+----------+------------+----------+------------+----------+------------+
| | Shares | | Shares | | 2012 | | TOTAL |
+----------------+------------+----------+------------+----------+------------+----------+------------+
| Shares in | | | | | | | |
| issue | | | | | | | |
+----------------+------------+----------+------------+----------+------------+----------+------------+
| at 31 March | | | | | | | |
| 2010 | | | | | | | |
+----------------+------------+----------+------------+----------+------------+----------+------------+
| and 30 | 2 | | 39,375,000 | | 35,625,000 | | 75,000,002 |
| September 2010 | | | | | | | |
+----------------+------------+----------+------------+----------+------------+----------+------------+
+----------------+------------+----------+---------+----------+--------+----------+-------+
| Issued | Management | | Nominal | | FUND | | |
+----------------+------------+----------+---------+----------+--------+----------+-------+
| | Shares | | Shares | | 2012 | | TOTAL |
+----------------+------------+----------+---------+----------+--------+----------+-------+
| | GBP | | GBP | | GBP | | GBP |
+----------------+------------+----------+---------+----------+--------+----------+-------+
| Issued share | | | | | | | |
| capital as | | | | | | | |
+----------------+------------+----------+---------+----------+--------+----------+-------+
| at 31 March | | | | | | | |
| 2010 | | | | | | | |
+----------------+------------+----------+---------+----------+--------+----------+-------+
| and 30 | 2 | | 3,937 | | 3,563 | | 7,502 |
| September 2010 | | | | | | | |
+----------------+------------+----------+---------+----------+--------+----------+-------+
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
9. SHARE CAPITAL (continued)
Zero Dividend Shares are redeemable on or around 22 November 2012. The Company
is closed-ended and therefore shareholders have no right to request the Company
to repurchase their Zero Dividend Shares or to redeem them prior to the
redemption date. If the Company is wound up prior to the redemption date,
shareholders will be entitled to the net asset value of the Zero Dividend Shares
on the winding up date. No dividends will be paid on the Zero Dividend Shares.
Nominal shares are issued for administrative purposes and carry no rights as to
dividends or voting.
Management shares are not redeemable, do not carry any right to dividends and in
a winding up rank only for a return of the nominal amount paid up thereon after
the return of capital on Zero Dividend Shares and Nominal Shares, together with
any balance remaining in the Management Fund.
10. SHARE PREMIUM
+-----------------------------------------+----------+----------+----------+------------+
| | | | | TOTAL |
+-----------------------------------------+----------+----------+----------+------------+
| | | | | GBP |
+-----------------------------------------+----------+----------+----------+------------+
| | | | | |
+-----------------------------------------+----------+----------+----------+------------+
| Share premium as at 31 March 2010 and | | | | 52,949,438 |
| 30 September 2010 | | | | |
+-----------------------------------------+----------+----------+----------+------------+
11. FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Company's
operations;
(b) Sterling-denominated Debt Securities whose performance is based on the
performance of the FTSE 100 Index; and
(c) The Company for the account to the Fund has also sold a Put Option,
whose performance is based on the performance of the FTSE 100 Index. Details of
the Put Option contract are shown in Note 8.
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company's financial instruments are market price
risk, credit risk, liquidity risk and interest rate risk. The Board regularly
review and agrees policies for managing each of these risks and these are
summarised below:
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a) Market Price Risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments held. It represents the potential loss the Company might
suffer through holding market positions in the face of price movements. The
Manager actively monitors market prices and reports to the Board as to the
appropriateness of the prices used for valuation purposes. A list of
investments held by the Company for the account of the Fund is shown in the
Schedule of Investments on pages 30 and 31.
Details of the Company's Investment Objective and Policy are shown on pages 1 to
3.
Price sensitivity
The following details the Company's sensitivity to a 10% increase and decrease
in the final market prices of its constituent financial assets and liabilities.
The Final Capital Entitlement due on the redemption of the Shares is determined
by reference to the performance of the FTSE 100 Index over the calculation
period (the "Calculation Period") from 23 November 2006 (the "Start Date") to 22
November 2012 (the "End Date"). If at the End Date the Index stands below
6,160.30 (the "Start Value") but has not closed below 3,080.15 during the
Calculation Period, the Final Capital Entitlement will be equal to 148.64 pence
per Share.
During the period from the Start Date to 30 September 2010 the Index had not
closed below 3,080.15. On 30 September 2010, the Index closed at 5,548.62.
If market prices as at 30 September 2010 had been 10% higher (equating to an
Index level of 6,103.48) and assuming this value were to remain unchanged until
the End Date, the redemption entitlement due would be 148.64 pence per Share.
If market prices as at 30 September 2010 had been 10% lower (equating to an
Index level of 4,993.76) and assuming this value were to remain unchanged until
the End Date, the Final Capital Entitlement due would be 148.64 pence per Share.
As the Index would need to decline by more than 44.49% from its level as at 30
September 2010 for the Final Capital Entitlement due to be less than 148.64
pence per Share, at 30 September 2010 the Company had no material sensitivity to
a 10% decrease in the level of the Index.
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet a commitment that it has entered into with the Company. At
the date of this report all issuers carried an investment grade credit rating.
The Board monitors credit risk and will consider further action if the credit
rating of an issuer falls below A- or A3 as ranked by Standard and Poor's and
Moody's Investor Services Inc ("Moody's") respectively. Credit risks are
controlled in the Company because the EMTN's have been purchased from several
different issuers.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Credit Risk (continued)
The following table details the aggregate investment grade of the debt
instruments in the portfolio, as a percentage of the value of the Company's
investments for the account of the Fund as at 30 September 2010 (31 March 2010
for the comparative period) as rated by Moody's:
+----------------+------------------------------+----------+---------+----------+-----------+
| Rating | 17 Nov 2010* | | 30 Sep | | 31 Mar |
| | | | 2010 | | 2010 |
+----------------+------------------------------+----------+---------+----------+-----------+
| | | | | | |
+----------------+------------------------------+----------+---------+----------+-----------+
| Aaa | 0.00% | | 0.00% | | 0.00% |
+----------------+------------------------------+----------+---------+----------+-----------+
| Aa | 34.33% | | 34.33% | | 33.91% |
+----------------+------------------------------+----------+---------+----------+-----------+
| A | 65.67% | | 65.67% | | 66.09% |
+----------------+------------------------------+----------+---------+----------+-----------+
*Based on the value of the Company's investments for the account of the Fund as
at 30 September 2010.
The credit risk on cash transactions and transactions involving derivative
financial instruments is mitigated by transacting with counterparties that are
regulated entities subject to prudential supervision, or with high credit
ratings assigned by international credit rating agencies.
The Company's financial assets exposed to credit risk are as follows:
+------------------------------+----------+----------+------------+----------+------------+
| | | | 30 Sep | | 31 Mar |
| | | | 2010 | | 2010 |
+------------------------------+----------+----------+------------+----------+------------+
| | | | GBP | | GBP |
+------------------------------+----------+----------+------------+----------+------------+
| | | | | | |
+------------------------------+----------+----------+------------+----------+------------+
| Unquoted financial assets | | | | | |
| designated as at fair value | | | 57,079,074 | | 56,673,196 |
| through profit or loss | | | | | |
+------------------------------+----------+----------+------------+----------+------------+
| Receivables | | | 118,980 | | 148,887 |
+------------------------------+----------+----------+------------+----------+------------+
| Cash and cash equivalents | | | 780,115 | | 924,896 |
+------------------------------+----------+----------+------------+----------+------------+
| | | | | | |
+------------------------------+----------+----------+------------+----------+------------+
| | | | 57,978,169 | | 57,746,979 |
+------------------------------+----------+----------+------------+----------+------------+
(c) Liquidity Risk
Liquidity risk is the risk that Company will encounter difficulty in realising
assets or otherwise raising funds to meet financial commitments. The Company's
main financial commitments are its ongoing operating expenses and any cash
settlement due to the Put Option Counterparty on the maturity of the Put Option,
scheduled to occur on 22 November 2012.
Upon the issue of the Shares in November 2006 the Company created a cash reserve
(the "Expense Provision") in the amount of 2.1% of the amount raised by the
issue of the Shares (the "Initial Gross Proceeds") plus GBP500,000, such amount
being estimated in the opinion of the directors upon the advice of the Manager
and the Administrator to be sufficient to meet the operating expenses reasonably
expected to be incurred over the life of the Shares.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2009 (continued)
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Liquidity Risk (continued)
At each quarterly Board meeting and at the end of each financial period the
directors review the Expense Provision against the expected future expenses
(other than the Manager's fee) of the Company. To the extent that the directors
consider that the Expense Provision is less than 150 per cent of the expected
future expenses of the Company (other than the Manager's fee), the directors
may, having first consulted the Manager, at their discretion reduce the amount
of investment management fees payable to the Manager (subject to a maximum
reduction of 50 per cent) in order to re-establish the 150 per cent cover.
If at any time during the life of the Company, notwithstanding the arrangements
summarised above, the Expense Provision is exhausted then, subject to the
relevant excess expenses having been agreed by the Manager, the Manager will
make good such shortfall from its own resources, subject to a maximum in each of
the first five annual financial periods of 0.25 per cent of the Initial Gross
Proceeds plus GBP6,000 and in the last financial period preceding the Redemption
Date, of a maximum amount of GBP136,000.
Should these expenses exceed this cap the return to Shareholders will be
adversely impacted. The directors do not anticipate that the expenses will
exceed the Expense Provision.
The Euro Medium Term Notes (the "Debt Securities") purchased by the Company for
the account of the Fund mature on 22 November 2012 (the "Maturity Date") and are
due to be redeemed at their notional face value plus four times the performance
increase between 22 November 2006 and 22 November 2012 in the FTSE 100 Index,
capped at an amount equal to 64% of the notional face value, so that the
aggregate maturity proceeds are expected to be between GBP52,953,000 if the FTSE
100 Index closes on 22 November 2012 at or below its starting value on 22
November 2006 of 6,160.30 and a maximum of GBP86,842,920 if the FTSE 100 closes
at or above 6,160.30 on 22 November 2012, all subject to counterparty default.
Provided that none of the issuers of the Debt Securities default on their
obligation to pay the maturity proceeds on the Maturity Date, the minimum
maturity proceeds of GBP52,953,000 due are intended to satisfy the maximum
payment due to be made by the Company to the Put Option Counterparty on the
maturity of the Put Option of GBP52,953,000.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Liquidity Risk (continued)
The directors and the Manager monitor the credit ratings of all issuers of the
Debt Securities. In the event of any downgrading in the long-term credit rating
of any issuer below A- or A3, as determined by Standard & Poor's and/or Moody's
respectively, the Company on behalf of the Fund may in its absolute discretion
seek to sell the relevant Debt Securities to third party purchasers and to
reinvest the proceeds in the purchase of Debt Securities of another issuer such
that the new Debt Securities will replicate as closely as possible the terms and
conditions of the original Debt Securities. If the purchase of such Debt
Securities is not possible, the Directors may reinvest such proceeds as they see
fit in investments which, in the opinion of the Directors, as nearly as is
practicable, replicate the investment characteristics of the Debt Securities
sold and so that the proceeds are invested, as nearly as is practicable in
accordance with the Company's stated investment objective for the Fund.
No assurance can be given that the Company will be able to sell the Debt
Securities, for the reasons described above or on a winding-up of the Company,
at a favourable price or at all. Even if the Company is able to sell such Debt
Securities, the sale of the Debt Securities may result in a lower return than
would have been the case if the long-term credit rating of the issuer of the
relevant Debt Securities had not been downgraded and the original Debt
Securities had been retained and were redeemed on the maturity date.
As at the accounting reference date and the date of this report, all issuers of
the Debt Securities carried on investment grade credit rating.
(d) Interest Rate Risk
The Company holds cash on fixed deposit, the return on which is subject to
fluctuations in market interest rates. All fixed deposits mature within three
months.
The weighted average effective interest rate for cash and bank balances as at 30
September 2010 was 0.41% (Mar 2010: 1.35%).
None of the other assets or liabilities of the Company attract or incur
interest.
Interest rate sensitivity
Interest rate risk arises from the possibility that changes in interest rates
will affect future cash flows or the fair value of financial instruments.
Except for cash set aside to meet expenses, the Company's assets and liabilities
are expected to be held until the Redemption Date.
If interest rates had been 100 basis points higher and all other variables were
held constant, the Company's net assets attributable to shareholders as at 30
September 2010 would have been GBP3,901 greater (Mar 2010: GBP9,249) due to an
increase in the amount of interest receivable on the bank balances.
Close Assets Funds Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 September 2010 (continued)
12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Interest Rate Risk (continued)
If interest rates had been 100 basis points lower and all other variables were
held constant, the Company's net assets attributable for the period ended 30
September 2010 would have been GBP3,901 lower (Sep 2010: GBP9,249) due to a
decrease in the amount of interest receivable on the bank balances.
The Company's sensitivity to interest rates is lower in September 2010 than in
March 2010 because of a decrease in the amount of cash held.
(e) Currency Risk
As both the Shares and the Debt Securities are Sterling denominated,
shareholders investing for Sterling returns will not be exposed to direct
currency risk. The value of the underlying securities comprising the FTSE 100
may be affected by changes in the economic, political or social environment in
Europe, as well as globally, including changes in exchange rates.
(f) Capital management
The investment objective of the Company for the Fund is to provide shareholders,
on the Redemption Date, with a payment per Zero Dividend Share which will
comprise a capital amount of 148.64p per Share and a growth amount per Share
equal to four times any percentage increase in the value of the Index as at 22
November 2012 relative to its value as at 22 November 2006, such amount being
expressed in pence and rounded down to the next half pence, subject to a maximum
increase of 64 per cent of the issue price of 148.64 pence per Share.
The Company has an unlimited life but the Zero Dividend Shares will be redeemed
on or around 22 November 2012. Until then the Company has a fixed capital.
(g) Collateral
Under the terms of a Pledge Agreement dated 7 December 2006 entered into between
the Company on behalf of the Fund and the Put Option Counterparty, the Company
on behalf of the Fund has pledged the Debt Securities, and all rights, title and
interest therein, and any and all proceeds resulting from the sale or repayment
of the Debt Securities as security for the Company's contingent liability under
the Put Option sold to the Put Option Counterparty, further details of which are
shown at Note 8. The collateral is held by a custodian in a segregated account
in Euroclear. Where there is an event of default in respect of the Company
under the Put Option, the Put Option Counterparty will be entitled to enforce
its security over the Debt Securities.
13. ULTIMATE CONTROLLING PARTY
In the opinion of the directors, the Company has no ultimate controlling party.
Close Assets Funds Limited (the "Company")
Schedule of Investments
as at 30 September 2010
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| CLOSE UK INDEX GROWTH FUND | | NOMINAL | | VALUATION | | TOTAL |
| 2012 | | | | | | NET |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| DEBT SECURITIES PORTFOLIO | | HOLDINGS | | GBP | | ASSETS |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Abbey National Treasury | | | | | | |
| Services Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,746,533 | | 19.30% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Britannia Building Society | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,211,497 | | 18.24% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Caisse Centrale du Credit | | | | | | |
| Immobilier de France | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,842,093 | | 19.49% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Irish Life & Permanent Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 8,852,532 | | 17.53% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Royal Bank of Scotland Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,953,000 | | 9,849,243 | | 19.50% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| SNS Bank NV | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,577,176 | | 18.96% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | 57,079,074 | | 113.00% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
The Company has also sold a Put Option, details of which are shown below:
+--------------------------------+----------+------------+----------+-------------+
| | | NOMINAL | | VALUATION |
| | | | | |
+--------------------------------+----------+------------+----------+-------------+
| | | HOLDING | | GBP |
+--------------------------------+----------+------------+----------+-------------+
| | | | | |
+--------------------------------+----------+------------+----------+-------------+
| JP Morgan Chase Bank FTSE 100 | | | | |
| Index | | | | |
+--------------------------------+----------+------------+----------+-------------+
| Option maturing 22 November | | 52,953,000 | | (7,259,279) |
| 2012 | | | | |
+--------------------------------+----------+------------+----------+-------------+
Close Assets Funds Limited (the "Company")
Schedule of Investments
as at 31 March 2010
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| CLOSE UK INDEX GROWTH FUND | | NOMINAL | | VALUATION | | TOTAL |
| 2012 | | | | | | NET |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| DEBT SECURITIES PORTFOLIO | | HOLDINGS | | GBP | | ASSETS |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Abbey National Treasury | | | | | | |
| Services Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,603,734 | | 18.83% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Britannia Building Society | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,094,304 | | 17.83% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Caisse Centrale du Credit | | | | | | |
| Immobilier de France | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,546,455 | | 18.72% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Irish Life & Permanent Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,402,052 | | 18.44% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| Royal Bank of Scotland Plc | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,953,000 | | 9,615,483 | | 18.86% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| SNS Bank NV | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| EMTN 6 December 2012 | | 8,800,000 | | 9,411,168 | | 18.46% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | | | |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
| | | | | 56,673,196 | | 111.14% |
+--------------------------------+----------+-----------+----------+------------+----------+---------+
The Company has also sold a Put option, details of which are shown below:
+--------------------------------+----------+------------+----------+-------------+
| | | NOMINAL | | VALUATION |
| | | | | |
+--------------------------------+----------+------------+----------+-------------+
| | | HOLDING | | GBP |
+--------------------------------+----------+------------+----------+-------------+
| | | | | |
+--------------------------------+----------+------------+----------+-------------+
| JP Morgan Chase Bank FTSE 100 | | | | |
| Index | | | | |
+--------------------------------+----------+------------+----------+-------------+
| Option maturing 22 November | | 52,953,000 | | (6,529,186) |
| 2012 | | | | |
+--------------------------------+----------+------------+----------+-------------+
Close Assets Funds Limited (the "Company")
SHAREHOLDER INFORMATION
The Company's Zero Dividend shares are listed on the London Stock Exchange.
Mid-market closing prices are quoted daily in the Financial Times. Company
announcements and daily market closing prices of the Company's Zero Dividend
Shares are available on Reuters, Bloomberg and on-line on the web. The ISIN of
the Company's Shares is GG00B1GJ9885 and the London Stock Exchange mnemonic is
CSUZ.
Monthly factsheets are issued by the Manager and can be down-loaded from the
Manager's website www.closeam.com
The Annual Financial Report for the year ended 31 March 2011 is intended to be
made public and sent to Shareholders in June 2011 together with a Notice of
Meeting convening a General Meeting of shareholders.
SHARE DEALING
Shares may be dealt in directly through a stockbroker or professional adviser
acting on an investor's behalf. The buying and selling of shares may be settled
through CREST.
SHAREHOLDER ENQUIRIES
The Company's Registrar is Anson Registrars Limited in Guernsey and they can be
contacted on 01481 711301.
Close Assets Funds Limited (the "Company")
Registered in Guernsey No. 38853
DIRECTORS AND SERVICE PROVIDERS
+----------------------------+-------------------------------------+
| Directors | Richard de la Rue (Chairman) |
+----------------------------+-------------------------------------+
| | Nicholas Falla |
+----------------------------+-------------------------------------+
| | John Le Prevost |
+----------------------------+-------------------------------------+
| Manager | Close Investments Limited |
+----------------------------+-------------------------------------+
| | (Authorised and Regulated by the |
| | Financial |
+----------------------------+-------------------------------------+
| | Services Authority) |
+----------------------------+-------------------------------------+
| | 10 Exchange Square |
+----------------------------+-------------------------------------+
| | Primrose Street |
+----------------------------+-------------------------------------+
| | London |
+----------------------------+-------------------------------------+
| | England EC2A 2BY |
+----------------------------+-------------------------------------+
| Administrator and | Anson Fund Managers Limited |
| Secretary | |
+----------------------------+-------------------------------------+
| | PO Box 405 |
+----------------------------+-------------------------------------+
| | Anson Place |
+----------------------------+-------------------------------------+
| | Mill Court |
+----------------------------+-------------------------------------+
| | La Charroterie |
+----------------------------+-------------------------------------+
| | St Peter Port |
+----------------------------+-------------------------------------+
| | Guernsey GY1 3GF |
+----------------------------+-------------------------------------+
| Principal Bankers | Royal Bank of Scotland |
| | International Limited |
+----------------------------+-------------------------------------+
| | Guernsey Branch |
+----------------------------+-------------------------------------+
| | Royal Bank Place |
+----------------------------+-------------------------------------+
| | 1 Glategny Esplanade |
+----------------------------+-------------------------------------+
| | St Peter Port |
+----------------------------+-------------------------------------+
| | Guernsey GY1 4BQ |
+----------------------------+-------------------------------------+
| Auditor | Saffery Champness |
+----------------------------+-------------------------------------+
| | La Tonnelle House |
+----------------------------+-------------------------------------+
| | Les Banques |
+----------------------------+-------------------------------------+
| | St Sampson |
+----------------------------+-------------------------------------+
| | Guernsey GY1 3HS |
+----------------------------+-------------------------------------+
| Registrar, Transfer Agent | Anson Registrars Limited |
+----------------------------+-------------------------------------+
| and Paying Agent | PO Box 426 |
+----------------------------+-------------------------------------+
| | Anson Place |
+----------------------------+-------------------------------------+
| | Mill Court |
+----------------------------+-------------------------------------+
| | La Charrotterie |
+----------------------------+-------------------------------------+
| | St Peter Port |
+----------------------------+-------------------------------------+
| | Guernsey GY1 3WX |
+----------------------------+-------------------------------------+
| UK Transfer Agent | Anson Administration (UK) Limited |
+----------------------------+-------------------------------------+
| | 3500 Parkway |
+----------------------------+-------------------------------------+
| | Whiteley, Fareham |
+----------------------------+-------------------------------------+
| | Hampshire |
+----------------------------+-------------------------------------+
| | England PO15 7AL |
+----------------------------+-------------------------------------+
| Registered Office of the | Anson Place |
| Company | |
+----------------------------+-------------------------------------+
| | Mill Court |
+----------------------------+-------------------------------------+
| | La Charrotterie |
+----------------------------+-------------------------------------+
| | St Peter Port |
+----------------------------+-------------------------------------+
| | Guernsey GY1 1EJ |
+----------------------------+-------------------------------------+
| Corporate Broker | Matrix Corporate Capital LLP |
+----------------------------+-------------------------------------+
| | One Vine Street, London |
+----------------------------+-------------------------------------+
| | England, W1J 1EJ |
+----------------------------+-------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGGMUGUPUGMM
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