Govett Singapore Growth Fund Limited
Unaudited Results for the year to 30th November 2003
Overview
of the year to 30th November 2003
* Total Assets increased to �25.7 million, which included �3.7 million drawn
on the credit facility.
* Shareholders' Funds increased by 20.6%, compared with an increase of 13.2%
in the MSCI Singapore Index (in sterling terms).
* Net Asset Value per Ordinary share increased by 20.6%, from �9.64 to �
11.63.
* Share price per Ordinary share increased by 18.1%, from �8.30 to �9.80.
Chairman's Statement
for the year ended 30th November 2003
Background
Singapore's equity market rebounded strongly in the second half of the year
under review, more than offsetting the losses it had suffered in the first half
on concerns over the effect of geopolitical tension in the Middle East and
later the spread of SARS in Asia. In October 2003, the market reached its
highest level since April 2002, bolstered by a solid economic recovery that
emerged in the country and in the Pacific region as a whole. Robust demand from
the rapidly growing economy of China continued to boost intra-regional trading,
while a strong economic recovery in the US also supported the region's export
growth. After having been hit by SARS scares in the spring, consumer demand
also recovered in many Asian countries, including Singapore, providing an extra
boost for the region's economic revival.
Performance
The Company's net asset value per Ordinary share rose by 20.6% during the year
under review from �9.64 to �11.63, compared with a rise of 13.2% in the MSCI
Singapore Index (in sterling terms). The market price of the Ordinary shares
increased over the year by 18.1% from �8.30 to �9.80.
Since the end of the Company's year, the net asset value per Ordinary share has
remained fairly static, against a background of increases in Singapore equity
values, tempered by the strength of sterling against the Singapore dollar.
Market Outlook
With the country's economyshowing more signs of recovery, we believe the
Singapore market will continue its upward trend in 2004, although the US
dollar's weakness against Singapore's currency could hurt the performance of
export-oriented stocks. In addition, some isolated outbreaks of SARS have
raised investors' concerns about a recurrence of the epidemic. We are
optimistic, however, that the disease will be controlled without having a
serious effect on the region's economy.
Strong economic growth is continuing in the US, as shown by recent economic
news flow, and this should bolster global demand for consumer goods and
technology products. Meanwhile, robust infrastructure investment by China is
having significantly positive effects on Pacific economies, including that of
Singapore, through increasing demand for steel and other construction materials
and equipment. As a result, commodity prices in general are rising in Asia,
benefiting the region's resources and basic industries companies. Exports from
China are growingstrongly as the country's low cost base underpins its
competitiveness. At the same time, China's move towards a more developed
economy is also raising its people's wealth levels and accelerating the process
of urbanisation within the country. Urban consumerism is emerging rapidly in
this context and is clearly shown by the equally strong growth of the country's
imports. The growing international trade in and out of China also benefits
transport and logistics companies of the region.
Change of Manager
Gartmore Managers (Jersey) Limited (`Gartmore') took over management of the
Company from AIB Govett Management (Jersey) Limited in November 2003. Gartmore
Managers (Jersey) Limited has appointed Gartmore Investment Limited as
Investment Manager.
Future of the Company
Mindful that we had undertaken to hold a continuation vote at the forthcoming
Annual General Meeting and, in light of the continued discount to net asset
value at which the Company's shares trade, the Board and its advisers have held
preliminary discussions with major shareholders over the future of the Company.
These discussions have included a suggested change of investment mandate aimed
at creating new demand for the Company's shares.
Following these discussions, the Board has concluded that the most appropriate
course of action that would have the support of a majority of the shareholders
is for a resolution to be put to shareholders to place the Company into
voluntary liquidation. Accordingly, no resolution for continuationwill be put
to shareholders at the forthcoming Annual General Meeting. It is expected that
a circular setting out details of the proposed liquidation will be sent to
shareholders in early April for consideration at an Extraordinary General
Meeting expected to be held immediately after the Annual General Meeting, which
is due to be held on 27th April 2004.
Carl Lee
Chairman
Statement of Total Return Year to 30th November 2003
to 30th November 2003
Revenue Capital Total
Return Return Return
�'000 �'000 �'000
Income and capital profits
Realised and unrealised gains on - 3,210 3,210
investments
Net foreign currency gains - 121 121
Dividend income 1,076 - 1,076
Deposit interest and other income 3 - 3
-------- --------- ---------
Return before expenses, interest payable 1,079 3,331 4,410
and taxation
Expenses
Management fees (48) (191) (239)
Other expenses (197) (14) (211)
-------- --------- ---------
Return before interest payable and 834 3,126 3,960
taxation
Interest payable (5) (16) (21)
-------- --------- ---------
Return on ordinary activities before 829 3,110 3,939
taxation
Tax on ordinary activities (202) - (202)
-------- --------- ---------
Return on ordinary activities after tax 627 3,110 3,737
for the financial year attributable to
equity shareholders transferred to
reserves
====== ====== ======
Total return per Ordinary share 33.45p 165.91p 199.36p
Statement of Total Return Year to 30th November 2002
to 30th November2002
Revenue Capital Total
Return Return Return
�'000 �'000 �'000
Income and capital losses
Realised and unrealised losses on - (2,094) (2,094)
investments
Net foreign currency losses - (11) (11)
Dividend income 699 - 699
Deposit interest and other income 13 - 13
-------- --------- ---------
Return/(loss) before expenses, interest 712 (2,105) (1,393)
payable and taxation
Expenses
Management fees (53) (212) (265)
Other expenses (228) (34) (262)
-------- --------- ---------
Return/(loss) before interest payable 431 (2,351) (1,920)
and taxation
Interest payable (2) - (2)
-------- --------- ---------
Return/(loss) on ordinary activities 429 (2,351) (1,922)
before taxation
Tax on ordinary activities (127) - (127)
-------- --------- ---------
Return/(loss) on ordinary activities 302 (2,351) (2,049)
after tax for the financial year
attributable to equity shareholders
transferred to/(from) reserves
====== ====== ======
Total return per Ordinary share: 15.96p (124.27)p (108.31)p
The revenue return column shown above represents the Revenue Account of the
Company.
All revenue and capital items derive from continuing activities.
There were no recognised gains and losses other than those presented above.
There is no difference between the return on ordinary activities for the year
and those that would be recorded under the historical cost basis.
Revenue return per Ordinary share has been calculated on the net return on
ordinary activities after taxation of �627,000 (2002: �302,000) and on the
weighted average number of Ordinary shares in issue throughout the year of
1,874,458 (2002: 1,891,660). Capital gain per Ordinary share is based on net
capital gains of �3,110,000 (2002: loss �2,351,000) and on the weighted average
number of Ordinary shares in issue throughout the year of 1,874,458 (2002:
1,891,660).
Balance Sheet At At
30th November 30th November
2003 2002
�'000 �'000
Investments at valuation 25,375 15,943
Current Assets
Debtors: Amounts receivable within one 69 290
year
Cash at bank 209 2,436
-------- ---------
278 2,726
Creditors: Amounts payable within one year (3,844) (597)
-------- ---------
Net Current (Liabilities)/Assets (3,566) 2,129
-------- ---------
Total Assets, less Current Liabilities 21,809 18,072
====== ======
Financed by:
Share capital 18 18
Share premium 4,217 4,217
Capital redemption reserve 8 8
Revenue reserve 1,675 1,048
Capital reserve - unrealised 1,199 (5,160)
Capital reserve - realised14,692 17,941
-------- ---------
Total equity shareholders' funds 21,809 18,072
====== ======
Net Asset Value per share �11.63 �9.64
===== ====
Notes
There have been no changes in accounting policies since 30th November 2002.
Net Asset Values per share have been calculated on �21,809,000 (2002: �
18,072,000) and 1,874,458 (2002: 1,874,458) shares in issue.
Cash Flow Statement Year to Year to
30th November 30th November
2003 2002
�'000 �'000
Revenue activities:
Investment income received 891 557
Deposit interest and other income 3 13
received
Management fees paid (44) (55)
Expenses paid, allocated to revenue (223) (206)
------- -------
Net cash inflow from operatingactivities 627 309
------- -------
Servicing of Finance :
Interest paid on bank loan (4) (3)
------- -------
Investment activities:
Expenses paid, allocated to capital (208) (255)
Sales of investments 7,080 20,654
Purchases of investments (13,571) (18,375)
------- -------
(6,699) 2,024
------- -------
Net Cash (Outflow)/Inflow before finance (6,076) 2,330
Finance:
Purchase of own shares - (642)
Draw down of borrowings 70,280 -
repayment of borrowings (66,476) -
-------- -------
Net Cash (Outflow)/Inflow (2,272) 1,688
====== =====
Post Balance Sheet Event
On 18th February 2004, having considered with their advisers the future of the
Company, the Directors resolved to propose to shareholders that the Company be
placed into voluntary liquidation. A resolution to this effect will be put to
shareholders at an EGM to be held on or around the date of the forthcoming AGM.
Report and Accounts for the year to 30th November 2003
The Report and Accounts for the year to 30th November 2003 will be posted to
shareholders shortly. Copies will also be available from the offices of
Gartmore at Gartmore House, 8 Fenchurch Place, London, EC3M 4PB and at the
Registered Office of the Company at Union House, Union Street, St. Helier,
JerseyJE2 3RF, Channel Islands.
Notes
The above financial information does not constitute statutory accounts. The
comparative financial information is based on the full statutory accounts for
the year ended 30th November 2002, which included an unqualifiedaudit report.
Gartmore Managers (Jersey) Limited
Secretary to Govett Singapore Growth Fund Limited
23rd February 2004
END
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