HANSA TRUST PLC

HANSA TRUST PLC

ANNUAL REPORT Year Ended 31 March 2010

Contents

1

Page

2 KeyInformation

3 TenYearPerformanceStatistics

4 Chairman’sStatement

10 ReportoftheDirectors

18 CorporateGovernanceStatement

22 StatementofDirectors’Responsibilities

23 InvestmentManager’sReport

32 PortfolioInformation

33 Directors’RemunerationReport

35 IndependentAuditor’sReport

36 GroupIncomeStatement

37 StatementofChangesinEquity–GroupandCompany

38 BalanceSheetoftheGroupandCompany

39 CashFlowStatement

40 NotestotheFinancialStatements

55 NoticeofAnnualGeneralMeeting

58 InvestorInformation

59 CompanyInformation

Key InformatIon

2

To achieve growth of shareholder value, Hansa TrustPLC invests in a portfolio of special situations, whereindividual holdings or specific sectors may constitutea significant proportion of the portfolio or that of theequity of the companies concerned. This investmentapproach may produce returns which are not replicatedby movements in any market index. Performance is

measured against an absolute benchmark derived fromthe three year average rolling rate of return of a fiveyear UK government bond, plus 2% with interest beingreinvested semi-annually. Investments are intended toaddvalueoverthemediumtolongertermthroughanon-market correlated, conviction based investment style.

SUMMARY INVESTMENT POLICY AND BENCHMARK

31-Mar-10 31-Mar-09 % change

Shareholders’Funds £215.0m £152.4m 41.1

Dividends(seeNote7) 25.0p 18.0p 38.9

NetAssetValue(NAV)pershare OpeningNAV 635.0p 924.5p –Dividends(seeNote7) (39.4p) (13.0p) –Revenueandcapitalreturn 300.3p (276.5p) –

ClosingNAV 895.9p 635.0p 41.1

PerformanceBenchmark 6.2% 6.7% –

OrdinarySharePrice 760.0p 510.0p 49.0‘A’OrdinarySharePrice 750.0p 490.0p 53.1

FTSEAll-ShareIndex 2,910 1,984 46.7

Discount Ordinaryshares 15.2% 19.7% – ‘A’non-votingOrdinaryshares 16.3% 22.8% –

TotalReturn(DividendsReinvested) Ordinaryshares 57.4% (36.7%) – ‘A’non-votingOrdinaryshares 61.8% (38.8%) – FTSEAll-ShareIndex–TotalReturn 52.8% (29.0%) –

STATISTICS

TheCompanyisregisteredinEnglandanditsnumberis126107.

COMPANY REGISTRATION AND NUMBER

10 year PerformanCe statIstICs

3

Net Asset FTSE Year Shareholders’ Ordinary and Annual Share Price All-Share Discount/(Premium) ended Funds ‘A’ Ordinary Dividend Ordinary ‘A’ Ordinary Index Ordinary ‘A’ Ordinary 2010 £215.0m 895.9p 25.0p 760.0p 750.0p 2,910 15.2% 16.3% 2009 £152.4m 635.0p 18.0p 510.0p 490.0p 1,984 19.7% 22.8% 2008 £221.9m 924.5p 13.0p 820.0p 815.0p 2,927 11.3% 11.8% 2007 £249.5m 1,039.4p 12.5p 1,123.0p 1,022.5p 3,283 (8.0%) 1.6% 2006 £196.4m 818.2p 9.75p 847.5p 818.0p 3,048 (3.6%) 0.0%#2005 £140.1m 583.5p 9.25p 566.0p 546.5p 2,458 3.0% 6.3% 2004 £102.4m 426.8p 6.0p 350.0p 346.5p 2,197 18.0% 18.8% 2003 £64.9m 270.4p 4.0p 215.0p 218.0p 1,736 20.5% 19.4% 2002 £89.2m 371.5p 5.0p 307.5p 305.0p 2,557 17.2% 17.9% 2001 £99.3m 413.9p 5.0p 490.0p 390.0p 2,711 (18.4%) 5.8% 2000 £106.8m 445.0p 5.0p 416.5p 382.5p 3,111 6.4% 14.0%

#RestatedtocomplywithIFRS,whichwasadoptedin2006.Noinformationbeforethisdatehasbeenrestated

Hansa Trust

March 02

Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 March 07

March 03 March 04 March 05 March 06 March 07

FTSE All-Share Index Benchmark

Hansa Trust FTSE 250 Index FTSE 100 Index

Net Asset Value Total Return

Share Price Total Return

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March 00

NAV cum income

March 01 March 02 March 03 March 04 March 05 March 06 March 07 March 08 March 09 March 10

March 00 March 01 March 02 March 03 March 04 March 05 March 06 March 07 March 08 March 09 March 10

Benchmark

Ord.Share A Ord.Share FTSE All-Share

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1 year 3 years 5 years 10 yearsNetAssetValue–dividendsreinvested 48.0% (7.1%) 70.0% 138.0%Benchmark 6.2% 19.7% 33.0% 69.2%

Hansa Trust

March 02

Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 March 07

March 03 March 04 March 05 March 06 March 07

FTSE All-Share Index Benchmark

Hansa Trust FTSE 250 Index FTSE 100 Index

Net Asset Value Total Return

Share Price Total Return

160

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March 00

NAV cum income

March 01 March 02 March 03 March 04 March 05 March 06 March 07 March 08 March 09 March 10

March 00 March 01 March 02 March 03 March 04 March 05 March 06 March 07 March 08 March 09 March 10

Benchmark

Ord.Share A Ord.Share FTSE All-Share

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1 year 3 years 5 years 10 yearsOrdinaryShare–dividendsreinvested 57.4% (26.3%) 50.1% 119.7%“A”OrdinaryShare–dividendsreinvested 61.8% (20.0%) 53.9% 137.7%FTSEAll-Share 52.8% 0.4% 44.0% 34.9%Pastperformanceisnotaguidetofutureperformance.Source:Internalunauditedmanagementinformation.

TEN YEAR RECORD

TEN YEAR SHAREHOLDERS’ TOTAL RETURN RECORD

ChaIrman’s statement

4

A year ago all was gloom and doom; a year on there isa sense of relief that there has been no doom, but noconviction that it hasn’t just been postponed. Stockmarketsremainvolatileandedgy.Itisinterestingtolookbackoverthelasttenyears(31March2000to2010)andremindourselveshowvolatilestockmarketshavebeen.Volatilitymaybebornofmanythingsbutthreecertainlycontributetoit:volatileinterestrates,excessiveamountsofdebtandnervousnessaboutthefuture(causedIbelieveby–asmuchasanything–lackofcredibilityinourpoliticalleadershipanditspolicies).

Thedecadebeganwiththeburstingofthedot.comboom.Indices had become thoroughly distorted by small andoften worthless companies being valued as large, whilelarger well established businesses were demoted tothe junior leagues. The UK stock market duly collapsedand over circa three years between 31 March 2000 andits subsequent low on 12 March 2003, just before theinvasionofIraq,itfellby48.9%.TheFederalReserve,theUScentralbank,hadreduceditsinterestratefrom6%to1%, in an almost panic like fashion; markets worldwidebecameflushwithmoney.

Inresponsetoveryeasyglobalmonetaryconditionsstockmarketsrecovered,theFTSEAll-ShareIndexrisingby119%in the space of just over four years. However the loosemoneyhadalsotriggeredwhatprovedtobepropertyandhousingbubblesofvolcanicproportions;likeallvolcanoes,theydoeventuallyburstanditdid–inspectacularfashion.Betweenanintra-dayhighon13July2007andtheeventualbottom nearly two years later on 9 March 2009 the UKstockmarket fell49.6%.Now, justoveroneyearon, thestock market, once again swimming in oceans of money,hadrecoveredbynolessthan65.7%atouryearend.Itallamountedtoonehellofarollercoaster.

Given that over the full ten years the UK stock marketdeclined by 6.4%, it can be said that Macbeth’s “full ofsound and fury signifying nothing” aptly describes whathasbeengoingon.Thepointofallofthisisthatwelivein volatile times and we are likely to continue to do so;thethreecausesoutlinedabovearestillverymuchinplay.Our own net asset values and therefore our two sharepriceshavealsoexperiencedvolatility(althoughwehavebeenfortunateenoughtomakemoneyoverthetenyearperiod);thevolatilityislikelytocontinue.

2009-2010: STOCK MARKET RECOVERS, VOLATILITY CONTINUES

After the disappointment of not making any money lastyear–duringwhichthenetassetvaluedeclinedby31.3%–weenjoyedthebenefitoftherecoveryintheworld’sstockmarkets.Ournetassetvalueroseafterdividendpaymentsby260.9ppershare(41.1%)to895.9ppershare,drivenonce again by a stellar performance by our holding inOceanWilsons–itcontributed167.6poftheriseandendedthe year accounting for 39.4% of the Trust’s net assetvalue.Mostoftherestoftheportfoliochippedinbuttoalesserextent,theindividualholdingsbeingmuchsmallerthanthatinOceanWilsons.Wesufferedjustafewlosses,mostnotablyfromourholdinginArkTherapeutics.

Wehavestressedmany times that it isouraimtomakemoney for shareholders over the longer-term (whichIwillreturntolater)andsoitisthatwehaveanabsolutebenchmark(describedonpage2)thatreflectsthatmoneymakinggoal.Duringtheyear it returned6.2%.TheFTSEAll-ShareIndex,whichwekeepaneyeon,roseby46.7%.John Alexander’s portfolio management commentary,which starts on page 23, is his usual excellent accountof what has been going on in stock markets and in ourportfolioandhisobservationsabouttheoutlookforstocksandsharesintheUK.ItisagoodreadandIdoencourageshareholders to peruse it; very few portfolio managersprovidesuchathoroughresumeoftheiractivities.

THE YEAR’S RESULTS

NAV: +41.1% to 895.9p per share

5

ChaIrman’s statement (continued)

Our investment in the shares of Ocean Wilsons, asI mentioned above, had a cracking good year; the valueof it rose by 74% and stood at £84.6m at our year end(accountingfor39.4%ofthenetassetvalue).Thecompanycontinues to do well and its prospects remain exciting.Again, John’s commentary provides a good review of itsprogress.

WeshouldrememberthatOceanWilsons’business(marketcapitalisation31March2010:£325.3m)nowconsistsof:-

i. its58.25%ownedsubsidiary,WilsonSonsLtdwhichisinvolvedinmaritimeservicesinBrazilandwhichhadastockmarketvalueatouryearendof$922.4m;and

ii. a portfolio of investments with a market value of$245m(ofwhich41%isinvestedinquotedequities,

9% in bonds, 25% in unquoted investments and25%isheldincash)–investedindifferentcountriesbut with an emphasis on the emerging economies(includingtheAmericas41%,Asia30%,Europe5%,andtheUK10%).

It is not our policy to trade in and out of our holding inOcean Wilsons. One of the reasons for achieving thequotationforWilsonSonssharestwoyearsago,realisingsome cash from Ocean Wilsons’ investment in it, was tomake Ocean Wilsons a geographically more diversifiedcompany. So, although our holding of 26.4% of OceanWilsons accounts for 39.4% of our net asset value (asmentionedabove)theexposuretoanyonecountryortoanysingleinvestmentismuchless.

OCEAN WILSONS

Value of Holding: +74.0% at £84.6m

DIVIDEND

+38.9% to 25.0p per share

We experienced a particularly good year in terms of theinvestmentincomefromourportfolio;itrosefrom£6.5mto £8.4m, an increase of 29.2%. Declines in the interestandtaxpaidmeantthattheearningsrosebyevenmore–by50%–from18.28pto27.42ppershare.Theinvestmentincomebenefitedfromincreaseddividends,mostnotablythatfromOceanWilsons,whichincreaseditsdividendsby40%–fromUS$0.30toUS$0.42perOceanWilsonsshare.

InrespectofthisyeartheBoardofDirectorshasdeclaredinterimdividends–oneof3.5ppershareandoneof21.5ppershare,totaling25.0ppershare(18.0ppersharewas

paidinrespectoflastyear).Detailsofthepaymentscanbefoundinnote7totheaccountsonpage44.

As I mentioned last year, the portfolio is managed forcapitalgrowthsothattheamountofincomegeneratedwillvary with whatever happens to be in the portfolio in anygiven year and when the companies concerned pay theirdividends.Asaconsequencethedividendmayriseorfallfromoneyeartothenext,althoughovertheverylongtermitshouldriseasthegenerallevelofdividendsgrows(overthelasttenyearsithasrisenfrom5pto25ppershare).

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Asconfidencereturnedtothestockmarketandsharepricevaluationsrecovered,sothediscountsoninvestmenttrustshares declined, thereby providing even better returnsforshareholdersthanthoseoftheirunderlyingnetassetvalues. Inourcase thediscountsdeclined from theverydepressedlevelsofMarch2009.

The tablebelowprovidesanattributionofshareholders’return over the course of the year – after taking intoconsiderationthedividendspaidduringthecourseoftheyear,amountingto39.5ppershare:

SHARE PRICE PERFORMANCE

Ordinary shares: +49.0% to 760p per share; Discount to NAV: 15.2% “A” Ordinary shares: +53.1% to 750p per share; Discount to NAV: 16.3%

Attribution of Shareholder Returns Ordinary Shares “A” Ordinary Shares

SharepricechangeduetochangeinNAV +209.5p +201.3pSharepricechangeduetochangeindiscount +40.5p +58.7pDividendspaidduringtheyear +39.5p +39.5p

Shareholders’ Return +289.5p +299.5p

Wedotakepowerstobuybacksharesandwilldosoifthecircumstancesmakeitparticularlyattractive.But,asIwillexpounduponlater,wedonotseektomanagetheshareprice over the short term with buy back programmes,

contentintheknowledgethatoverthelongtermtheshareprice return will not be materially different from the netassetvaluereturn.

As I stressed above, we manage the Company and itsportfolio to make money over the longer-term, a periodthatwedeemtobea rolling fiveyears.So theBoardofDirectors, inassessingtheperformanceoftheCompany,looks at returns that have been earned for shareholdersas part of their annual assessment of the Management.As the numbers above show, the returns over the lastfiveyearperiodhavebeenquitesatisfactory,particularlygiven that it included the severe two year bear marketthatendedinMarch2009.Thenetassetvaluehasrisenby53.5%whichisequivalentto9.0%perannum,betterthanthebenchmark,whichinturnisratherbetterthanthestockmarket(FTSEAll-ShareIndex).

However,lookingathowthefiveyearrollingreturnshaveworked out in the last ten years and the chart oppositeillustrates that, by and large and with the exception ofone period, the five year returns have been satisfactory–someverygoodperiods,othersnotquiteasgoodbut,

innineoutofthetenperiods,moneyhasbeenmadeforshareholders. For the first ten years of this new centurythenetassetvaluerose101.3%(equivalentto7.2%perannum). That’s not bad considering the FTSE All-ShareIndexdeclined6.5%overthoseyears.

Having looked at the record referred to opposite, theindependentDirectorshavehadnodifficultyinconcludingthat it is in shareholders’ interests that Hansa CapitalPartners remain as the Company’s investment manager.It isn’t just the long-term returns that we looked at inreaching the conclusion but also the management andadministrationoftheCompany’saffairsgenerally.Inthatrespectwearealsoingoodhands.Itisappropriateforus,onbehalfofallshareholders, to thankWilliamSalomon,John Alexander, Peter Gardner and all their colleaguesat Hansa Capital Partners for all they do for us and thereturnstheyhaveearnedforusovertheyears.Thankyou.

LONG TERM NAV RETURNS

5 Years: NAV: +53.5%; Benchmark: +33.0%; FTSE All-Share Index: +18.4% Ordinary share price: +34.3% (including dividends +49.1%) “A” Ordinary share price: +37.2% (including dividends +52.7%)

7


HANSA TRUST – AN INVESTMENT TRUST THAT IS DIFFERENT

+14.0%

+7.6%

-2.7%

+8.6%

+5.6%

+14.6%

+22.8%

+27.9%

+8.3% +9.0%

2001 201020092008200720062005200420032002

Five Year NAV Returns (pa) 2001 to 2010

%

-5

0

5

10

15

20

25

30

It is always risky to portray anything as unique, but IwoulddescribeHansaTrustasverydifferentfromthevastmajorityofotherinvestmenttrusts.ThefirstandperhapsmostfundamentaldifferenceliesinthecapitalstructureoftheTrust,with16millionnon-voting“A”Ordinarysharesand 8 million voting Ordinary shares. The Directors andmembers of the investment manager have a significantinterest in the shares of Hansa Trust PLC, which affordsthe Trust the protection from the corrosive influence ofshort-termism so prevalent in the activities of today’sstockmarket.HansaTrust reallycananddoestake longtermdecisionswhenmakinginvestments.

Perhapsthemostobviousillustrationofourlong-termismis provided by our investment in Ocean Wilsons. Ourholdingof9,352,770shareswasacquiredin1958andhasneverbeenchangedsince.AsIhavementionedearlier,itisnotourpolicytotradethisinvestment,largelybecauseitisunlikelywewilladdvaluetoourholdingbytradinginandoutofitanditwouldcompromiseourtaxstatus.WhileIwouldnotsuggestthatallofthedifferentholdingsintheportfolio will be retained for decades on end, we do notseektotradethemjustbecausetheremightbeshorttermpricemovements.Webelievethathighportfolioturnoverseldom adds value and that we certainly won’t achieveextra returns from trading and of course having 39.4%oftheTrust’sassetsinvestedinthesharesofoneratherunusualcompany–OceanWilsons–makesHansaTrust’sportfolioverydifferentfrommostothers.

Another feature of Hansa Trust, although by no meansunique, is that its Investment Manager, Hansa CapitalPartners is not in the asset gathering business. HansaCapital Partners, concentrates solely on making money

for its clients. The business model of most investmentmanagers is focused on building the assets undermanagement – so as to build their management feerevenuesandprofits.Althoughthatisdifficulttoachievewithout a good performance record, it is not quite thesame thing. For them, making money from – rather thanfor–theirclientsisthepriority.Nothingbetterreflectsthisthanthefactthatmanymanagerschargeperformancefeesforlosingtheirclients’money–providingtheylosethemlessthanthemarket.HansaTrust,withalargeproportionof itssharesinthehandsoftheBoardandManagement(an unusual feature within the investment trust world)benefitsfromthatfocusonmakingmoney.

Investmenttrustsaresubjecttothepressurenotonlytoproducegoodshort-termreturnsbutalsotoensure thattheirsharepricesareashighaspossible–againintheshort-term. Faced with the competition of the instant liquidityof unit trusts and open-ended investment companies,investmenttrustshavefoundthemselvesbeingforcedtominimisetheirdiscounts–ifpossibleatalltimes.Worsestillthemarketmakingcapacityforinvestmenttrustshasshrunk so that they find themselves playing the role ofmarketmakeroflastresort.Theyarebecominghybrids–halfinvestmenttrustsandhalfunittrusts–andarelosingsome of the benefits that accrue from proper long-termportfolio management. We do not engage in a policy ofdiscountcontrolmanagement,believingthatitisnotthedutyofanyboardofanycompanytoengageinshort-termsharepricefixing.However,wedoretaintheabilitytobuyback shares should an appropriate and very attractiveopportunity to enhance the net asset value significantlypresentitself.

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Thepoint that Iamguiltyofgoingonandonabout: theportfolio ismanagedtomakemoneyoverthelong-term.Nearly all investment trusts do in fact have an absolutereturngoal (usuallyexpressedascapitalgains)but theyjudgetheirperformanceonarelativebasisbycomparingtheirreturnstothatofanequityindex.Itisaperfectlywellunderstood axiom that, if a benchmark for performanceinanyfieldisset(teaching,hospitals,etcand,ofcourse,portfolio management), then beating it will ultimatelybecome the goal. The fact that portfolio managersgenerallyregardtheriskinanyholdingtobeitsweightingrelative to that within an index provides evidence of the

relativeportfoliomanagementbias.Weregardtheriskinanyholdingastheriskthatwehavemadeabadinvestmentandwilllosemoneyforshareholders.

I should make one final point and make it emphatically.Justbecausewearedifferentdoesnotmeanwewillalwaysperform better than others. We won’t. However, we arenotdifferentjustforthesakeofitbutratherbecausewebelieveitisthebetterwaytodothingsandthat,overthelong-term,itwillproducegoodresultsforourshareholders–whateveranyoneelsemayachieve.

TheAnnualGeneralMeetingwillbeheldattheWashingtonHotel,CurzonStreet,London(GreenParktubestation,seemaponpage55)at11.30amonTuesday3August2010.Your attendance is important to us because it gives us,the Directors and Management, the chance to hear yourviews,concernsandsuggestions.Pleasecomeandjoinus.

Johnwillgivehisusualpresentationoftheeventsofthepastyearandtheprospectsforthecurrentone.Followingthe formal AGM you will have the chance to meet theDirectorsandManagementanddiscussanyaspectoftheCompany’sbusiness–shouldyouwishtodoso.

ANNUAL GENERAL MEETING

3 August 2010 at 11.30am at the Washington Hotel, Curzon Street

Thestraplineaboveisthesameasthatabovelastyear’soutlookstatement.Thefactthatnotmuchofafundamentallong-term nature has changed in the last year doesperhaps justify repeating thestatement.Governments inmany countries all over the world have flooded marketswith money and made their tax payers bail out theirbankingsystems–sothattheconsequencesofdecadesoflivingbeyondourmeanshavebeenalleviatedforthetimebeing:liquidityhasbeenreturnedtothefinancialsystem,economies have stopped shrinking and stock marketshave made remarkable recoveries. But the basic causesofthecrisishavenotbeenaddressed,withgovernmentsfrightened of doing anything too drastic or too quicklyforfearofthepoliticalconsequences.Macbeth’s(again!)quote:“ifitweredonewhen‘tisdone,then‘twerewellitwere done quickly” does not seem to resonate with ourpoliticalmasters.

In the statement last year I addressed the inflation/deflation conundrum, wondering which way it wouldgo. Would we follow down the path of Japan which has

still not fully recovered from its financial orgy of the1980s? Or would we suffer the fate of high inflation asgovernments set about debasing their currencies as asolution to their debt repayment problems? The juryremainsoutontheconundrumandIsuspectwillremainsoforquitesometime.

But it isn’t just this rather fundamental issue thatcreates uncertainty about the future. There are all sortsof paradoxes that abound within the writings of Citycommentators, which will be resolved in the longer-term but which add to the uncertainty of the moment.Forinstance:

• Economicgrowthwillreturnbutconsumerexpenditurewill be restrained and government expenditure willbecut.

• Economic growth can return (to previous debtenhanced rates, even) but interest rates willremainlow.

OUTLOOK

Shorter-term very difficult to assess but longer-term optimistic

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• Consumer expenditure (the biggest componentof GNP) can grow but the consumer will be hit withhighertaxesandrepaymentofdebts.

• TheGovernmentwillputitshouseinorder(raisetaxesand cut expenditure) but the economy will continuetogrow.

• Interestrateswillstaylowbutthegovernmentwillbeborrowinghugequantitiesofmoney.

• Inflationwillstaylowbutthecentralbankwillcontinuetobuygovernmentdebtandtherebyprintmoney.

• Interestrateswillstaylowbecauseofsloweconomicgrowth but company sales and profits will continuetogrow.

• The City will prosper but the rest of the economywon’t.

To be fair there are quite a number of commentatorswhoarebothrealisticandlogicalintheirassessmentsofthe future; it is important to understand, however, thatoptimismistheoxygenoftheCityandthatmuchofwhatissaiddrivesstockmarketsentimentintheshorttermbutsuffersfromtheMandyRice-Daviessyndrome–“hewouldsaythat,wouldn’the.”Sowhenrealityslapsusintheface– theGreekEuroTragedy, for instance–markets retreatveryquicklyindeedandsoitisthatvolatilitycontinuestodominateinvesting.

Wereallydon’tknowhowthe future isgoingtopanoutforoureconomy.Aslongaswegoonbelievingthatpasteconomic policies and behaviour are the solution to theproblemsweface,thegreatertheproblemswestoreupforourselves.ToquoteMartinWolf“Thequestioniswhetherthecountrydrivesthoseadjustments[theonesnecessarytoaddressourstructuralproblems]orisdrivenbythem.”At thisstage itmustbesaidthat thesecondoutcome isthemorelikely.

Havingwallowedforafewparagraphsingloomanddoom,Ithinkitisworthmakingacoupleofverypositivepointsabout thecorporateworld inwhichwe invest.WhileourGovernment seems to be frozen in indecision (or, whereitdoesmakeadecision,itisusuallytoolittleratherlate),

companies have been anything but. They have beendecisiveandquickaboutputtingtheirhousesinorderandpreparingthemselvesfordifficulttimesahead(whetherornottheyoccur).Costshavebeenslimmeddown,debthasbeenrepaid,equityhasbeenraisedandpositivecashflowisbeinggenerated.

Secondly, British companies are – as a generalisation– very international in the structure of their businessesso that the woes of Britain don’t affect them hugely.Something like two thirds of the sales and profits ofquoted companies are earned abroad – providing anexcellenthedgeagainstourownproblemsbut,betterstill,providing growth opportunities from exposure to moresoundly financed countries with growing economies andfromanydeclineintheexchangerateofthePound.

Therein lies the opportunity for Hansa Trust. The rightequitiescanprovideagoodsafehaveninthesetroubledtimesanditis,inpartatleast,thesetwofactorsthathavedriventherecoveryinthestockmarket.DespitehavingaportfolioofstocksandsharesthatarelistedontheLondonStockExchange,ourexposuretotheUKeconomyisalittleless than 30%. We undertook a portfolio exercise – bylookingat thegeographicbreakdownsof thecompaniesthatareprovidedintheirannualreports–whichshowedthatcirca37%isexposedtotheAmericas(ofwhichcirca29% is accounted for by Brazil), circa 20% to Europe,MiddleEastandAfrica,circa11%totheemergingmarketsofEastAsiaandcirca29%intheUK.

We have always stated that ultimately the prospects forHansa Trust are in our own hands. Choosing the rightcompaniestoinvestincanbeveryrewardingoverthelong-term. Patience in investing has always been rewardinggenerally and for our shareholders specifically. I think itwillprovetobesointhefuture.

Alex Hammond-Chambers Chairman 24June2010

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rePort of the DIreCtorsfortheyearended31March2010

TheDirectorspresenttheirReportandFinancialStatementsfortheyearended31March2010.

TheBoardischargedbytheshareholderswiththeresponsibilityforlookingaftertheaffairsoftheCompany.Itinvolvesthe‘STEWARDSHIP’oftheCompany’sassetsandliabilitiesand‘THEPURSUITOFGROWTHOFSHAREHOLDERVALUE’.Theseresponsibilitiesaredischargedinmanywaysandaredetailedbelow.

TheDirectorswhoservedintheyearto31March2010aresetoutbelow.EachofthembringscertainindividualandcomplementaryskillsandexperiencetotheBoard’sworkings,assummarisedbelow.AllDirectorsresignateachAnnualGeneralMeetingandofferthemselvesforre-election.TheBoardendorsesthere-appointmentofeachoftheDirectorsbasedontheircontinuingcontributiontotheCompanyanditsshareholders.

TheCompany’sArticlesofAssociationincludeageneralpowerfortheDirectorstoauthoriseanymatterwhichwouldormightconstituteorgiverisetoabreachofthedutyofadirectorunders.175oftheCompaniesAct2006.ProcedureshavebeenestablishedforthedisclosureofanysuchconflictsandalsofortheconsiderationandauthorisationoftheseconflictsbytheBoard,whererelevant.

THE BOARD’S OBJECTIVES

THE BOARD

Mr Hammond-Chambers (Chairman)

Alex’scareerhasbeeninvolvedwithportfoliomanagementandinvestmenttrusts,fromwhichhebrings–interalia–experience and understanding of investment policies,strategies, stock selection and risk management. Bornin 1942, he joined the Board in 2002. He worked forIvory & Sime for 27 years, retiring as chairman in 1991.He ischairmanof three investment trustcompaniesanda director of two others, as well as a number of otherinvestmentcompanies.HehasservedasachairmanoftheAssociationofInvestmentCompaniesandasagovernoroftheNASD(NASDAQ).

Lord Borwick

Jamie’s business life has been involved with theautomotive industry particularly and manufacturinggenerally,aswellasinvolvementwiththepropertysector.Hebringshisexperienceof industryandproperty to theBoard’s stewardship. Born in 1955, he joined the Boardin 1984. He is chairman of Modec Limited which makesbatterypoweredvansandofroute2mobilityLimitedwhichfinanceswheelchairsandscootersaspartoftheMotabilityScheme.HeisalsoapartnerofFederatedInvestmentsLLPandaninvestorinpropertyintheUKandFlorida.

Mr Salomon

William’scareer in investmentbankingandmanagementhas involved working on and understanding corporatestrategies. His own skills and experience are importanttotheBoardindevelopingandmonitoringinvestmentinspecial investment themes and in strategic investments.Bornin1957,bothaGermanandBritishcitizen,hejoinedtheBoardin1999.HeistheseniorpartnerofHansaCapitalPartners LLP (the Investment Manager and CompanySecretary), chairmanofNew India InvestmentTrustPLC,deputychairmanofOceanWilsonsHoldingsLimitedanditslistedsubsidiaryWilsonSonsLimited.

Professor Wood

Geoffreyhasgreatknowledgeofeconomicsgenerallyandmonetary and fiscal policy issues specifically. His skillsand experience are important to the Board, particularlyin understanding the effect of such policy issues on themarkets.Bornin1945,hejoinedtheBoardin1997.HeisProfessorofEconomicsatCassBusinessSchool,intheCityofLondon,andavisitingProfessorialFellowattheCentreforCommercialLawatQueenMaryandWestfieldCollegeofLondonUniversity.HehasbeenvisitingProfessorattheUniversityofSouthCarolinaandattheNationalBureauforEconomicResearchatHarvard. InadditionheisandhasbeenanadvisertoanumberofCentralBanksandCityofLondonfinancialfirms.

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rePort of the DIreCtors (continued)

fortheyearended31March2010

Areviewoftheperformanceanddevelopmentofthebusiness,includingananalysisusingtheKPIslistedbelow,isgivenintheChairman’sStatementonpages4to9.

BUSINESS REVIEW

Investment Policy

TheinvestmentpolicyadoptedbytheBoardistoinvestinaportfolioofquotedandunquotedspecialsituations,withtheobjectiveofachievinggrowthofshareholdervalue.

By the very nature of special situation investments,the opportunity to invest in them will arise at any timeand often not for long periods. Sometimes a number ofopportunities may arise at the same time, so any singleinvestment may, on occasion, constitute a significantproportion of the portfolio or of that of the companyconcerned. The Investment Manager is charged by theBoard with implementing the investment policy underits supervision and guidance. It is important for theInvestment Manager to be able to vary any investmentatanytimeinordereithertoprotectshareholders’fundsand/ortooptimiseshareholders’returns.

Portfolio Limits

The Board of Directors has set a limit of 15% of theportfoliooftheCompanythatcanbeinvestedinanyonecompany,thelimitapplyingatthetimeoftheacquisitionoftheholding,coincidentlyasrequiredbys.1158CTA2010(formerlys.842ICTA1988).TheBoardhasnotsetalimitonthemarketvalueofaninvestmentheldinanycompany,whichcanthereforeriseabove15%.TheBoardhasnotseta limiton thenumberorvalueofunquoted investmentswhichcanbeheldintheportfolio;norhasitsetalimitonthenumberofcompaniesitcaninvestin,howeveritwouldusuallyinvestinatleast30companies.

Likewise,theBoardhassetalimitof30%ofthevalueoftheportfolio thatcanbe invested intoanyonesectororthemeatthetimetheinvestmentismade,buthasnotsetaformallimitonthemarketvaluethatcanbeheldinanyonesectorortheme.FortheavoidanceofdoubttheBoard,workingwiththeManagerandotheradvisers,determineswhat constitutes a sector or theme. Again, although theBoardhasnotseteitherafloororaceilingonthenumberofsectorsinvestedin,itisexpectedthatitwouldusuallyexceedfour.

The investment policy enables the Investment Managerto invest worldwide, in either UK or foreign quoted or

unquoted companies. The Board does not believe it ispractical to impose limits on the geographical allocationofassetsbecause,withtheglobalisationofbusinesses,itisanalmostimpossibletasktomonitor.Whilefullyawareof the impact of geopolitical influences on the outcomeof investment returns the Board, in conjunction with theInvestment Manager, regularly reviews each investmenton its individual merits. There is no geographicalconstraintonwhereandhowmuchmaybeinvestedinanyonecountryorcurrency.

Borrowing Limits

The Board believes that shareholders’ returns will beenhanced if theCompanyborrowsmoneyatappropriatetimes for the purpose of investment. While theConstitutionallowstheCompanytoborrowupto3.5timesshareholders’funds,theamountthatcanbeborrowedatanytimeisnormallysubjecttoaconstraintimposedinthelender’s borrowing covenants. The Board will normallyset an informal borrowing limit of approximately onehalf of the lender’s covenanted constraint at the timetheborrowingsaremade,allowingplentyofcapacity forthe value of the portfolio to fall without having to sellinvestmentstoconformwiththosecovenants.However,inextremecircumstances,suchaswhenitbelievestobethebottomofabearmarket,theBoardmaywellborrowuptothefullamountthelender’scovenantallows.

Hedging Limits

TheInvestmentManager,inconsultationwiththeBoard,mayfromtimetotimeputinplaceahedgingstrategyinorder to mitigate some of the stock market risks of theportfolio. It is not the intention of the Board to have inplaceahedgingstrategywhichwouldeliminatealladverseeffectstoshareholders’fundscausedbyafall ingeneralmarketprices,nor toprotect theshort-termvalueof theportfolio.Rathertheaimistorealise,incircumstancesofasevereandsuddenfallinstockmarkets,asumofmoneywhich can be used to take advantage of the fall and topurchaseinvestmentsatpriceswhichmayaddverygoodlong-termvalue.Nolimithasbeensetontheproportionoftheportfoliothatmightbehedged.

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Results and Dividends

Theresultsattributabletoshareholdersfortheyearandthetransfertoreservesareshownonpage37.

Thedividendspaidandproposedareasfollows:2010 2009

£000 £000

Ordinaryand‘A’non-votingOrdinaryshares

Interimspaidof25.0p(2009:3.5p)pershare 6,000 840

Finalproposednil(2009paid:14.5p)pershare – 3,480

Totaldividends 6,000 4,320

TheBoardarenotproposingafinaldividend.

Key Performance Indicators (‘KPI’)

TheBoardreviewedthe risks fromthepointofviewof the long-termshareholder, theprincipalonebeing thatoverthelong-term(whichwedeterminedwasfiveyears)theydonotmakeareturnfromtheirinvestmentintheCompany.Thekeyperformanceindicator,againstwhichtheBoardcomparedshareholders’sharepriceanddividendreturns,isthebenchmark,whichisinessenceaproxyforthereturnfromariskfree,fiveyearinvestment.OtherKPIsincludethenetassetvaluereturnsagainstthoseof thebenchmark,againsttheCompany’speergroupaveragereturns,againstthemarket(theFTSEAll-ShareIndex)andthetotalexpenseratioinrelationtothereturnsshareholdershavereceived.Thenumbersarecomputedonaone,three,fiveandtenyearbasis–fiveyearsbeingthebettertimeperiodoverwhichtojudgetheprogressoftheCompany.

i) Shareholder – Total Returns

Acomparisonismadebetweenthe‘TotalReturn’ofeachclassofsharestothatofthethree-yearaveragerollingrateofreturnofafiveyearUKGovernmentbond,plus2%withinterestre-investedsemi-annually(theCompany’sbenchmark).Thiscomparisonillustrateshowshareholders’returnscomparedwiththereturnsofthebenchmark.

To 31 March 2010 (1 year) (3 years) (5 years) (10 years)

SharePrice

Ordinaryshares 57.4% (26.3%) 50.1% 119.7%

‘A’non-votingOrdinaryshares 61.8% (20.0%) 53.9% 137.7%

Company’sbenchmark 6.2% 19.7% 33.0% 69.2%

ii) Company – Total Returns

ThesecomparisonsareusedtodeterminetheeffectivenessoftheinvestmentstrategyandoftheInvestmentManager.


NetAssetValue 48.0% (7.1%) 70.0% 138.0%

Absolutecomparison

Company’sbenchmark 6.2% 19.7% 33.0% 69.2%

Relativecomparison

FTSEAll-ShareIndex 52.8% 0.4% 44.0% 34.9%

PeerGroupAverage 56.8% (11.7%) 48.2% 57.5%

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iii) Discount/(Premium)

Acomparison ismadebetween thediscounts/(premiums)of theCompany’s twoclassesofsharesand thoseof theCompany’sPeerGroupandoftheAICAverage.

2010 2007 2005 2000

Discount

Ordinaryshares 15.2% (8.0%) 3.0% 6.4%

‘A’non-votingOrdinaryshares 16.3% 1.6% 6.3% 14.0%

PeerGroupAverage 11.3% 6.4% 8.3% 12.8%

AICAverage 10.3% 5.2% 7.4% 13.7%

iv) Expense ratios

Acomparisonismadebetweenthelevelofexpenses(administrativeandmanagement)oftheCompanyandtheNetAssetReturns(bothannualised)inordertoassessthevalueformoneythatshareholdersreceive.


Totalexpenseratioperannum 1.0% 0.9% 0.9% 1.0%

NAVTotalReturnperannum 48.0% (2.4%) 14.0% 13.8%

Risks

TheBoardconsiderstheriskstheshareholdersfacecanbedividedintoexternalandinternalrisks.

External risks to shareholders and their returns arethose that can severely influence the investmentenvironment within which the Company operates:including government policies, economic recession,declining corporate profitability, rising inflation andinterest rates and excessive stock market speculation.At the annual strategy meeting, the Directors andManagement highlighted certain risks that concernedthem,including:

• Alargeriseineitherlongorshortterminterestrates.

• AcollapseofSterling.

• Currencyinstability,inparticularthedisintegrationoftheEuro.

• Uncertainty of outcome of recovery policies(particularlyinflationordeflation),giventheyamounttoauntriedexperiment.

• Aftershocks to the financialcrisis,particularly in thecontinentalEuropeanbankingsystem.

• UnquantifiablerisksinChina.

• Riskofpoliticalparalysisstemmingfromthecoalitiongovernment.

• Terrorismandinternationalconflict.

• Regulatorychange,particularlyfromtheEU.

Itshouldbestressedthatthesearetheriskswhichmostconcern theDirectorsandManagement,not forecastsoffutureevents.

The management of these risks is achieved by sensiblestock and sector diversification, the use of investmentrestrictions and guidelines and monthly reporting to theBoard of the Company’s adherence to these restrictionsandguidelines.

Internal risks to shareholders and their returns are:portfolio (stock and sector selection and concentration),balance sheet (gearing), and/or administrative mis-management. In particular the Board has identified theexposuretoOceanWilsonsHoldingsLimitedasanotablylarge single investment risk. In respect to the risksassociated with administration, continuing compliancewiths.1158CTA2010wouldhavethegreatestimpactifitceasedtobecompliedwithbytheCompany.Theportfolioiscontinuouslymonitoredby theManager toensure theCompanyiscompliantwiththekeyaspectsofs.1158;any

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discrepanciesarereportedtotheBoardintheManager’smonthlycompliancereport.

The mitigation of these risks is achieved by the Boardperforming regular reviews of all service providers andmonthlyreviewsofs.1158compliance.

The Board considers the risks to the Company’s twoshare prices, apart from those mentioned above, toinclude the level of discount or premium. The Boardmonitors the discount/premium and may take action

whenappropriate.However,giventheCompany’sstatedobjectiveofincreasingshareholdervalueoverthemediumtolong-term,theBoarddoesnotconsidershort-termnetassetvalueorsharepricevolatilitytobeamaterialrisktolong-termshareholders.

Details of how the principal risks arising from financialinstruments are managed, have been summarised inNote21onpages50to53.

THE PURSUIT OF GROWTH OF SHAREHOLDER VALUE

In pursuit of shareholder value, the Board:

• Contracts out the administration and management of the Company

The Board, in contracting out the administrationand management of the Company, seeks to engageorganisationswhichcanprovidetherelevantlevelsofexperienceandexpertiseatanacceptablecost.

• Monitors third party suppliers, performance and costs

The Board at its regular meetings reviews reportspreparedbyboththeManagerandtheAdministratorwhich enables it to monitor the performance andcostsofthethirdpartysupplierstotheCompany.

• Monitors investment performance and risks TheBoardreviewsreportspreparedbytheManager

atitsregularmeetingswhichenablesittomonitortheinvestmentperformanceandrisks.

• Determines investment strategy, guidelines and restrictions

The Board determines the investment strategyin conjunction with the Manager. The strategy ismonitored regularly and refinements are made to itasrequired,withformalreviewattheBoard’sannualstrategymeeting.

The Board issues formal investment guidelines andrestrictions; compliance with these are reported bytheManager’scomplianceofficeronaregularbasis.

• Determines gearing levels and capital preservation through the use of hedging instruments

TheBoard,takingaccountofadvicefromtheManager,determinesthemaximumlevelofborrowingsthattheCompany will undertake at the time of borrowing.The Company has entered into a short-term loanfacilitywiththeINGBankNV;currentlythemaximumlevelofthefacilityis£30m.TheBoardhasapprovedthe utilisation of hedging instruments in orderto provide the portfolio with a limited degree ofprotectionfromextrememarketdeclines.

• Monitors the share discount The Board regularly monitors the level of discount

and, whilst it has the option to repurchase shares,itconsidersthat thebestmeansofattainingagoodrating for theshares is toconcentrateon increasingshareholderreturns.

• Determines the level of dividends payable to shareholders

The Board’s policy is to distribute to shareholdersthe majority of the Company’s income by way ofdividends.

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SERVICE PROVIDERS

TheBoardconsistsentirelyofnon-executivedirectors; itdelegatesthedaytodayimplementationofitspoliciestothirdpartyserviceproviders.TheBoardhascontractuallydelegatedtoexternalorganisationsthemanagementoftheinvestmentportfolio,thecustodialserviceswhichincludesafeguardingoftheassetsandthedaytodayaccountingand company secretarial requirements. Each of thesecontracts is only entered into after proper considerationofthequalityandcostofserviceswhicharereviewedandmonitoredeitherbytheBoardoritsCommittees.

Investment Manager

Hansa Capital Partners LLP charges an investmentmanagement fee at an annual rate of 1% of the netassets of the Company (after any borrowings), but afterdeducting the value of the investment in Ocean WilsonsHoldings Limited on which no fee is payable. The termsof the investment management agreement permit eitherparty to terminate the agreement by giving to the othernot less than 12 months’ notice or such shorter periodas is mutually acceptable. In its annual assessment ofthe Investment Manager, the Board has concluded that,

because of the calibre and commitment of the wholemanagementteamtotheCompanyandtheexcellentlong-termreturnstoshareholders ithasproduced, it is inthebestinterestofshareholdersthattheManagerremaininplaceunderthepresentterms.

Auditor

The Auditor, Grant Thornton UK LLP have expressedtheir willingness to continue to act as Auditor to theCompany and a resolution to re-appoint Grant ThorntonUKLLPasAuditortotheCompanywillbeproposedattheforthcomingAnnualGeneralMeeting.

Company Secretary

Secretarial services were provided by Hansa CapitalPartnersLLPatanannualrateof£100,000,excludingVAT(2009:£100,000).

Administrator

TheCompanyengagesBNPParibasServicesUKLimitedasitsAdministrators.

CAPITAL STRUCTURE

The Company has 8,000,000 Ordinary shares of 5p and16,000,000 ‘A’ non-voting Ordinary shares of 5p eachin issue. The Ordinary shareholders are entitled to onevoteperOrdinaryshareheld.The‘A’non-votingOrdinarysharesdonotentitletheholderstovoteorreceivenoticeofmeetingsbutinallotherrespectstheyhavethesamerightsastheCompany’sOrdinaryshares.

Substantial Shareholders

Asat31March2010and14June2010theDirectorswereawareofthefollowinginterestsintheOrdinarysharesofthe Company, which exceeded 3% of the voting issuedsharecapitalofthatclass:

No. of voting shares

% of voting shares

NicholasB.Dill,Jr.&CodanTrustCompanyLimited 4,096,350 51.2

Of the shares held by Nicholas B. Dill, Jr & Codan TrustCompanyLimited,MrSalomonisinterestedin2,048,175andMrsTownsendisinterestedin2,048,175,eachholdingrepresenting25.6%ofthevotingsharecapital.Inaddition,

MrSalomonhasfurtherinterestsintheCompany’sshares,the total interest is detailed in the Directors’ Interestssectiononpage16.

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BOARD STATEMENTS AND DISCLOSURES

InaccordancewiththeCompaniesAct2006andFinancialServices Authority UKLA Listing Rules, the Board isrequiredtomakethefollowingstatementsanddisclosurestoshareholders:

Directors’ Interests

ThepresentmembersoftheBoardareshownonpage10,all of whom retired at the last Annual General Meeting

and were duly re-elected. The Board’s policy is that it isappropriateforallmemberstoretireannuallyattheAGMand therefore Mr Hammond-Chambers, Lord Borwick,Mr Salomon and Professor Wood will retire again andoffer themselves for re-electionat the forthcomingAGM.The interests of Directors and their connected parties intheCompanyat31March2010areshownbelow:

Ordinarysharesof5peach

‘A’non-votingOrdinarysharesof5peach

Natureofinterest

2010 2009 2010 2009

MrHammond-Chambers 500 500 7,600 7,600 Beneficial

LordBorwick 24,678 24,678 16,376 16,376 Beneficial

MrSalomon 2,113,219 2,113,219 98,700 98,700 Beneficial

ProfessorWood 5,500 5,500 7,100 7,000 Beneficial

MrSalomonistheseniorpartnerofHansaCapitalPartnersLLP.FeespayabletoHansaCapitalPartnersLLPamountedto £1,264,413 (2009: £1,276,271). The investmentmanagementfeeoutstandingattheyearendamountedto£110,829 (2009: £88,268). During the year, no rights tosubscribeweregrantedto,orexercisedbyDirectors,theirspousesorinfantchildren.

Fixed Asset Investments

ThemarketvalueoftheGroup’sinvestmentsat31March2010 was £216,309,000 (2009: £139,027,000). Takingthese investments at this valuation, the net assetsattributable to each Ordinary and ‘A’ non-votingOrdinary share amounted to 895.9p at 31 March 2010(2009:635.0p).

Creditors’ Payment Policy

While the Company does not follow a formal code, it isthe Company’s continuing policy to pay amounts due tocreditorsasandwhentheybecomedue.Paymentsrelatingto investment transactions are made in accordancewith the settlement practices of the relevant exchange.At31March2010outstandingtradecreditorsamountedto£Nil(2009:£Nil).

Directors’ and Officers’ Indemnity and Liability Insurance

The Company through its Articles has indemnified itsDirectors and Officers to the fullest extent permissablebylaw.

During the year the Company also purchased andmaintainedliabilityinsuranceforitsDirectorsandOfficers.

Going Concern

The Directors, having made relevant enquiries, aresatisfieditisappropriatetopreparefinancialstatementson a going concern basis as the assets of the Groupconsistofsecurities,themajorityofwhicharetradedonrecognisedstockexchanges.

Status and Activities

DuringtheyearunderreviewtheCompanyhasoperatedas an investment company, under Section 833 of theCompanies Act 2006 and in compliance with Section1158 CTA 2010. The Company has received approval asan investment trust for the year ended 31 March 2009.The Directors are of the opinion that the Company hassubsequently directed its affairs so as to enable it tocontinue to obtain HMRC approval as such. There hasbeennosignificantchangeintheactivitiesoftheCompanyand its subsidiary (the ‘Group’) during the year and theDirectorsanticipatetheGroupwillcontinuetooperateinthesamemannerduringthecurrentyear.

Audit Information

TheDirectorsconfirmthat,sofarastheyareawarehavingmadesuchenquiriesandhavingtakensuchstepsastheyconsider they reasonably ought, they have provided theAuditorwithalltheinformationnecessaryforthemtobeabletopreparetheirreport.IndoingsoeachDirectorhasmade himself aware of any information relevant to theauditandestablishedthattheCompany’sAuditorisawareof that information. The Directors are not aware of any

17



informationrelevanttotheauditofwhichtheCompany’sAuditorisunaware.

Social, Community, Employee Responsibilities and Environmental Policy

The Company does not have any employees. As aninvestment trust, the Company has no direct social,

community,orenvironmentalresponsibilities.Itsprincipalresponsibilitytoshareholdersistoensuretheinvestmentportfolioisproperlyinvestedandmanaged.

Corporate Governance

TheCorporateGovernanceStatementonpages18to21formspartofthisReportoftheDirectors.

ANNUAL GENERAL MEETING

SpecialresolutionsrelatingtothefollowingitemswillbeproposedattheforthcomingAGM:

(a)Authoritytore-purchase‘A’non-votingOrdinaryshares

A resolution will be proposed at the forthcoming AGM,seeking shareholder approval for the renewal of theauthorityfortheCompanytore-purchaseitsown‘A’non-voting Ordinary shares. The Board believes the abilityof the Company to re-purchase its own ‘A’ non-votingOrdinary shares in the market will potentially benefit allequity shareholders of the Company. The re-purchaseof ‘A’ non-voting Ordinary shares at a discount to theunderlying net asset value will enhance NAV per shareof the remaining equity shares and it may also enablethe Company to address more effectively any imbalancebetweensupplyanddemand for theCompany’s ‘A’non-votingOrdinaryshares.

The Company’s Articles are drafted in such a way thattheCompanymayfromtimetotimepurchaseandcancelits own shares. However, company law requires thatshareholders’approvaltore-purchasesharesbesought.AttheAGMtheCompanywillthereforeseektheauthorityto purchase up to 2,398,400 ‘A’ non-voting Ordinaryshares(representing14.99%oftheCompany’sissued‘A’non-votingOrdinarysharecapital,themaximumpermittedundertheListingRulesoftheFinancialServicesAuthority)atapricenotlessthan5ppershare(thenominalvalueofeachshare)andnotmorethan5%abovetheaverageofthe middle-market quotations for the five business daysprecedingthedayofpurchase.Theauthoritybeingsought,thefulltextofwhichcanbefoundinResolution9intheNoticeofMeeting,willlastuntilthedateofthenextAGM.

It isproposedthattheCompanyusesitsrealisedcapitalreservetore-purchasesharesinthemarket.ThedecisionastowhethertheCompanyre-purchasesanyshareswillbe at the absolute discretion of the Board. Any sharespurchased will be cancelled. The Directors consider thatthe creation of a facility to re-purchase the Company’sown ‘A’ non-voting Ordinary shares is in the interests ofshareholdersasawholeandunanimouslyrecommendallshareholderstovoteinfavourbytickingtheappropriateboxes on the enclosed form of proxy. The proxy formshould be returned to the Company’s Registrar as soonaspossible,butinanyeventsoastoarrivenolaterthan48hoursbeforethetimeoftheAGM.

ByorderoftheBoardHansa Capital Partners LLP Secretary24June2010

CorPorate GovernanCe statement

18

ThisstatementformspartoftheReportoftheDirectors.

Internal Controls

The Combined Code requires the Directors to review theeffectivenessoftheCompany’ssystemofinternalcontrolsonanannualbasis.TheDirectors,throughtheproceduresoutlinedbelow,keepthesystemofinternalcontrolsunderreview.TheBoardhasidentifiedriskmanagementcontrolsin the key areas of business objectives, accounting,compliance, operations and secretarial as areas for theextendedreview.

The Board recognises its ultimate responsibility for theCompany’ssystemofinternalcontrolsandformonitoringits effectiveness. In order to perform this responsibilitythe Board receives regular reports on all aspects ofinternal control from the Company’s service providers(includingfinancial,operationalandcompliancecontrols,risk management and relationships with other serviceproviders); the Board will authorise necessary actionin response to any significant failings or weaknessesidentifiedbythesereports.However,itmustbenotedthatthissystemisdesignedtomanagerather thaneliminatetheriskoffailuretoachievebusinessobjectivesandcanonly provide reasonable and not absolute assuranceagainstmaterialmisstatementorloss.

Financial Reporting

The Board has a responsibility to present a balancedand understandable assessment of annual, half-yearlyand other price sensitive public reports and reports toregulators,aswellastoprovideinformationrequiredtobepresentedbystatutoryrequirements.AllsuchreportsarereviewedandapprovedbytheBoardpriortotheirissuetoensurethatthisresponsibilityisfulfilled.

Compliance with the provisions of the Combined Code

The Board has considered the principles andrecommendationsoftheAICCodeofCorporateGovernance(“AICCode”)byreferencetotheAICCorporateGovernanceGuide for Investment Companies (“AIC Guide”). The AICCode, as explained by the AIC Guide, addresses all theprinciplessetoutinSection1oftheCombinedCode,aswellassettingoutadditionalprinciplesandrecommendationson issues of specific relevance to Hansa Trust PLC. TheBoard confirms it follows the Combined Code, exceptfor those areas which the AIC Guide identifies as beingirrelevant in a non self managed investment company:namelytheroleoftheChiefExecutive,ExecutiveDirector’sremunerationandtheneedforaninternalauditfunction.

TheBoardconfirms,withtheexceptionofthecompositionof the Audit Committee as detailed on page 20 andthe existence of a Senior Independent Director, that ithas in all respects followed the AIC Code in meeting itsobligations under the Listing Rules and the CombinedCode. The AIC Code can be found on The AIC websiteatwww.theaic.co.uk.

TheAICCodehas21principles,thevastmajorityofwhichthe Board has been following for many years. However,modern corporate governance requires boards not onlygoverntheircompaniessensiblyandresponsibly,butthatthey are seen to do so. Hence there is a requirement tofollowachecklistofprinciples,whichinourcaseisdrawnfromtheAICCode.Theyinclude:

The Board

• The Chairman should be independent

Mr Hammond-Chambers has been assessed by theBoardtobeindependent.

• A majority of the Board should be independent of the Manager

WiththeexceptionofMrSalomon,whoisapartnerintheInvestmentManager,alltheotherBoardmembersare considered to be independent. Both ProfessorWoodandLordBorwick,whohaveservedasDirectorsoftheCompanyformorethannineyears,havebeenassessedas independentbyvirtueof theirpersonalcharacteristics, their experience, their financialindependenceandtheirdirectorialperformance.

• Directors should be elected for a fixed term of no more than three years. Nomination for re-election should not be assumed but be based on disclosed procedures

All Directors resign at each AGM and whereappropriateofferthemselvesforre-election.

• There should be full disclosure of information about the Board

A brief biography of each member of the Board canbe found on page 10. The Company Chairman doeschair the Audit and Remuneration Committees asthe Company considers he is the most appropriatelyqualifiedpersonontheCommitteestofulfiltheseroles.

• The Board should have a policy on tenure which is disclosed in the Annual Report

TheBoardhasdeterminedthatneitheragenorlengthof service necessarily compromise independence,

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CorPorate GovernanCe statement (continued)

ratherthatexperienceandknowledgegainedinservicenormally strengthen independent performance. AllDirectorshavecontractsforservices,detailsofwhicharecontainedintheDirectors’RemunerationReportonpage33.

• The Board should aim to have a balance of skills and experience, ages and length of service

The Board regularly reviews its requirements todirect the affairs of the Company. Where and whenappropriate, individuals are identified who wouldstrengthentheBoardandputforwardascandidatesforboardmembership.

• The Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual Directors

The Board undertakes a formal evaluation everythree years. The other years the Board, at itsstrategy meeting, carries out an evaluation of theindependence of each Director, the progress of theactionsresultingfromthepreviousreviewsandofanynewideasfor improvingthereturnstoshareholdersthroughimprovingtheeffectivenessoftheBoard.TheChairmanisevaluatedbyMrSalomononbehalfoftheBoard.

• Directors’ remuneration should reflect their duties and responsibilities and the value of their time spent

The level of Directors’ fees is reviewed on a regularbasisrelativetoothercomparablecompanies,inlightof the Directors’ duties and responsibilities and thevalue of the time committed to the interests of theCompany.

• The Independent Directors should take a lead in the appointment of new Directors and the process should be disclosed in the Annual Report

The identification and appointment of a new boardmemberisamatterforthewholeBoard.TheChairmanwouldtaketheleadinalloftheprocessesleadingtotheappointmentofanewDirector.

• Directors should be offered relevant training and induction

WhenanewDirectorisappointed,heorsheattendsaninductionseminarheldbytheCompanySecretaryand the Chairman. Directors are also provided on aregularbasiswithindustry,regulatoryandinvestmentupdates. Directors regularly participate in industryseminarsandtrainingcourseswhereappropriate.

Board meetings and the relationship with the Manager:

• Boards and Managers should operate in a supportive, co-operative and open environment

The Board and Manager operate in an environmentof mutual trust and respect, both at formal Boardmeetings and during the year when ad-hoccommunicationsareinstigatedbyeitherparty.

• The primary focus at regular Board meetings should be the review of the investment performance and associated matters such as gearing, asset allocation, marketing/investor relations, peer group information and industry issues

At the regularBoardmeetings,discussionsareheldand reports and papers are reviewed, all of whichcovertheabovementionedaspects.

• Boards should give sufficient attention to overall strategy

TheBoardholdsanannualstrategymeetingwiththeManagertodiscusstheCompany’sfutureinvestmentandcorporatestrategies.

• The Board should regularly review both the performance of and contractual arrangements with, the Manager

The Board formally reviews the performance of theManager each quarter, at which Board meeting theManager presents a written report. At the annualreviewoftheManagerallaspectsofitsservicetotheBoardarereviewed,particularlythelong-termreturnsto shareholders and the terms and conditions of itscontract.

• The Board should agree policies with the Manager covering key operational issues

Within the agreement, service levels are definedbetweentheManagerandtheCompany. InadditiontheBoarddeterminescertaininvestmentrestrictionsandguidelinesfortheManager,onwhichtheManagerreportsmonthly.

• Boards should monitor the level of share price discount or premium (if any) and, if desirable, take action to reduce it

TheBoardcontinuallymonitorsthelevelsofdiscountor premium and comments on it at its regularmeetings.TheBoardalsoseeksauthoritytopurchaseup to 14.99% of the Company’s ‘A’ non-votingOrdinarysharesattheCompany’sAGM.

20


• The Board should monitor and evaluate the other service providers

The Board, through its Audit Committee, receivesindependent reports from the auditors of the mainservice providers; these reports are called eitherAAF01/06orSAS70reports.

Shareholder Communication

• The Board should regularly monitor the shareholder profile of the Company and put in place a system for canvassing shareholder views and for communicating the Board’s views to shareholders

TheBoardreviewstheshareholderprofileatitsregularmeetings. The Company, through the Manager, hasregular contact with its institutional shareholders.TheBoardsupportstheprinciplethattheAGMshouldbe used to communicate with all shareholders andpromotesitswebsitetothem.TheCompanySecretaryregularlyreceivesandhandlescommunicationsfromshareholders.Thesecommunicationsarereceivedbyletter, email or telephone. Any matter requiring theBoard’sattentionisreferredtoitforaction.

• The Board should normally take responsibility for, and have a direct involvement in, the content of communications regarding major corporate issues even if the Manager is asked to act as spokesman

TheBoardisresponsibleforallmajorcorporateissuesandassuchwouldhaveadirectinvolvementinboththeissueandthecontentofitscommunications.

• The Board should ensure shareholders are provided with sufficient information for them to understand the risk reward balance to which they are exposed by holding the shares

TheBoard,throughtheissuanceoftheAnnualandHalfYearlyReports,InterimManagementStatementsandMonthlyFactSheet,aimstoensurebothshareholdersandprospectiveshareholdersaremadefullyawareoftheinvestmentaimsandbenchmarkoftheCompany,the types of investments the Company is likely toenterinto,thedispositionofthoseinvestmentsintheportfolio,thegearingoftheCompanyandtheperiodoverwhichitsperformanceshouldbejudged.

BOARD COMMITTEES

TheDirectorsconsiderthatinorderforthemtofulfiltheirresponsibilitiesasDirectorsoftheCompany,allmembersof the Board should be members of all sub-committees,exceptwherethereisaconflictofinterest.

Details of the Directors’ attendance at Board, Strategyand Audit Committee meetings are in the Directors’RemunerationReportonpage33.

Audit Committee

TheAuditCommitteeconsistsofall fourDirectorsandisassisted by Mr Teideman, a former director whose skillsandexperiencestrengthentheCommittee.TheCommitteeischairedbyMrHammond-Chambers.TheSmithReport’sguidancetotheCombinedCodeemphasisestheneedfor‘Audit Committee arrangements to be proportionate tothe task’. With such a small Board, it was deemed bothproportionate and practical to involve all Directors in itsworkings even though Mr Salomon is not regarded asbeingindependent.

TheCompany’sAuditCommitteemeetsrepresentativesoftheInvestmentManageranditsComplianceOfficer,whoreportastotheproperconductofbusinessinaccordancewiththeregulatoryenvironmentinwhichboththeCompanyand the Investment Manager operate. The Company’s

Auditor also attends this Committee and reports on itswork procedures, the quality and effectiveness of theCompany’saccountingrecordsanditsfindingsinrelationto the Company’s statutory audit. The responsibilitiesof the Audit Committee include reviewing the internalcontrols, the financial reporting process, the valuationof theunquoted investments, the managementcontract,the statutory audit and the Auditor’s appointment,remuneration and independence (no non-audit servicesare provided by the Auditor). The Board has issued theCommittee with Terms of Reference which are availablefromtheCompanySecretaryattheregisteredaddressoftheCompany.

Following careful consideration of the independence,experience and value for money of the current Auditor,theAuditCommitteehasrecommendedthattheBoardre-appointGrantThorntonUKLLPasAuditortotheCompany.

Nomination Committee

TheBoardasawholefulfilsthefunctionoftheNominationCommittee. The Company’s Articles of Associationrequire newly appointed Directors to submit themselvesfor election by shareholders at the next AGM afterappointment and that they will be subject to re-election

21


at intervals of no more than three years. However, theBoardhasdeterminedthatallDirectorswillretireandofferthemselvesforre-electioneachyearattheAGM.

Management Engagement Committee

TheBoard,with theexceptionofMrSalomon, fulfils thefunction of this Committee. The level of managementfees, level of service provided and the performance ofthe Manager, are reviewed on a regular basis to ensurethattheseremaincompetitiveandinthebestinterestsofshareholders.

Remuneration Committee

TheBoardasawholefulfilsthefunctionofaRemunerationCommittee and considers that the specific appointmentofsuchacommitteeisnotappropriateforaninvestmenttrustcompany.ThelevelofDirectors’feesisreviewedonaregularbasisinthelightoftheirdutiesandalsorelativetoothercomparablecompanies.

statement of DIreCtors’ resPonsIbIlItIes

22

IndischargingitsresponsibilitiesofstewardshiptheBoardis governed by the Companies Acts and the FinancialServicesAuthorityUKLAListingRules.

UnderUKCompanyLawtheDirectorsareresponsibleforensuringthat:

• Adequateaccountingrecordsarekept,whichdisclosewith reasonable accuracy at any time the financialpositionoftheCompanyandenablethemtoensurethat the Financial Statements comply with theCompaniesAct2006.

• The assets of the Company are safeguarded; andfor taking reasonable steps for the prevention anddetectionoffraudandotherirregularities.

• TheDirectors’Reportandotherinformationincludedin the Annual Report is prepared in accordancewith company law in the UK. The Directors are alsoresponsible forensuring theAnnualReport includesinformation required by the Listing Rules of theFinancialServicesAuthority.

• TheCompanyhaseffective internalcontrolsystems,designed to ensure that proper accounting recordsare maintained, that the financial information onwhichthebusinessdecisionsaremadeandwhichareissued for publication is reliable. Such a system ofinternalcontrolcanprovideonlyreasonable,butnotabsolute, assurance against material mis-statementorloss.

• The Group Financial Statements for each financialyeararepreparedinaccordancewithIFRS,asadoptedby the EU and have elected to prepare Companyfinancial statements on the same basis. The Groupand Company Financial Statements are required bylawand IFRSasadoptedby theEU topresent fairlythefinancialpositionoftheCompanyandtheGroupandtheperformanceoftheGroupforthatperiod.InpreparingthesefinancialstatementstheDirectorsarerequiredto:

select suitable accounting policies and applythemconsistently;

make judgements and estimates that arereasonableandprudent;

state whether they have been prepared inaccordancewithIFRSasadoptedbytheEU;and

prepare the financial statements on the goingconcern basis, unless it is inappropriate to

presume the Company and Group will continueinbusiness.

UndertheFinancialServicesAuthority,UKLAListingRules–CombinedCodetheBoardisresponsiblefor:

• Disclosing how it has applied the principles andcomplied with the provisions of the Combined Codeorwherenottoexplainthereasonsfordivergence.

• ReviewingtheeffectivenessoftheCompany’ssystemofinternalcontrols.

The Directors are responsible for the maintenance andintegrity of the corporate and financial informationincludedontheCompany’swebsitewww.hansatrust.com.Visitors to thewebsiteneedtobeaware that legislationintheUKgoverningthepreparationanddisseminationofthefinancialstatementsmaydifferfromlegislationintheirownjurisdictions.

Responsibility Statement

TheBoardconfirmsthattothebestofitsknowledge:

• The financial statements, prepared in accordancewith applicable international accounting standards,give a true and fair view of the assets, liabilities,financialpositionandprofitorlossoftheGroupandtheCompany.

• The Chairman’s Statement and Directors’ Reportinclude a fair review of the development andperformanceofthebusinessandthepositionoftheGroup and Company, together with a description oftheprincipalrisksanduncertaintiestheyface.

ForandonbehalfoftheBoardAlex Hammond-ChambersChairman24June2010

Investment manaGer’s rePort

23

BACKGROUND

Anexcessrelianceonshort-termwholesalemoneytofundlong-termmis-pricedandrisk-laden illiquidassets ledtodisaster in the 2008 credit crunch. A roller coaster ridefollowedin2009.ByMarch2009itfeltasthoughtheworldwas about to end. The financial abyss facing developedeconomies after the bankruptcy of Lehman Brothers inSeptember2008wasavoidedbythetransferofcreditriskfrombankstogovernmentsandbythestimulusprovidedbyliquiditymeasuressuchasquantitativeeasing.Interestrateswerecuttothelowestlevelonrecord,governmentdeficits ballooned to the highest on record, the Bankof England spent £200bn on flooding the market withliquidityandtheUKeconomyposteditssharpestdeclineinGDPgrowthsince1945.Theworldsurvived,thefinancialsystemdidnotcollapse,thedowngradecycleincorporateearningscametoanend,marketsralliedandthetalkofadoublediprecessionsubsided.

Emergency liquidity measures will need to be unwoundin 2010 as western governments are forced to takemeasurestobringtheirhugefiscaldeficitsundercontrol,necessitating huge cuts in public expenditure as well astaxincreases,suggestingaprolongedperiodofsub-trendeconomicgrowthinthedevelopedworldandparticularlyin the UK. Debt busts are deflationary and recoveriesthat follow financial recessions tend to be much weakerthan those that follow non-financial recessions. Japan’sexperience strongly suggests that even sustained fiscaldeficits, zero interest rates and quantitative easing donot lead to soaring inflation in post-bubble economiessuffering from excess capacity and a balance sheetoverhang,suchas theUSandUK,aswellassuggestingthatunwindingfromsuchexcessesisalong-termprocess,giventheneedfordeleveragingandbalancesheetrepairby the governments and consumers of debtor nations.Sterlinghascontinuedtoweakenagainstthebackgroundofanenormousfiscaldeficit,politicaluncertaintyandtherisk of a return to recession and money printing, as thegovernoroftheBankofEnglandwarnedthatBritainmighthavetoresorttofurtherquantitativeeasingiftheeconomydeterioratesfurther.Aweakadministrationmightlackthemandate and will to get to grips with the public deficitand rein in an oversized state. Meanwhile cost cuttingand improved efficiencies have been responsible for

decent corporate results, while it has generally been astruggle to grow the top line against a background ofstalling household incomes and lack of credit growth.Therecovery isnascent,anda longtermrecoverywouldrequire a sustained revival in private sector demand forgoodsandservices.

Thecrashof2008-2009has turnedout tobe littlemorethanascarefortheemergingmarketsasthehistoricpowershift from east to west gets back on track. On this noteit is worth remembering that 76% of FTSE 100 revenuesarederivedfromabroad,sotheUK’sbenchmarkbluechipindex ismorecloselycorrelatedwith theperformanceofinternationalmarketsthantheUKeconomy.HansaTrusthad21.0%ofitsassetsinFTSE100companiesatperiodend. HSBC’s chief economist Stephen King expects richnationstogrowby1.9%thisyear,whileemergingnationswillexpandby6.2%andChinaby9.5%.HSBC’semergingmarkets indexroseto56.1 in the fourthquarterof2009from 55.3 in the third quarter, signalling the strongestquarterly increase in emerging market manufacturingandservicessince late2007(a readingabove50meansgrowth). The global economy has become more China-centric, and growth in the emerging world is no longerdriven solely or even primarily by US and Europeanconsumers. One reason for China’s emergence as theworld’stopexporter in2009,overtakingGermany, isthegrowthoftradebetweenemergingnations.TheincreaseincommoditypricesisprimarilybeingfuelledbyashiftinthesourceofglobalgrowthawayfromtheWestandtowardsChina.Bybolsteringcommodityprices,China’ssuccessisalsoinsulatingotheremergingnations,themainexportersof raw materials, from the West’s troubles. Growth inChina’s exports and imports continue to surprise on theupside. A large part of China’s recovery is the result ofgovernment sponsored cheap credit and infrastructurespending,puttingaquestionmarkunderitssustainabilityasaresultoflowercostsandincreasedproductivity.Chinahasincreasedtheamountbanksmustsetasideasreservesin the clearest sign yet that the central bank is trying totighten monetary conditions amid mounting concerns ofoverheatingand inflationasa resultof thecreditboom,whilethePeople’sBankofChinahasalsoraisedinterestratesmodestlyintheinter-bankmarket.

OVERALL PERFORMANCE

During the year under review, the Ordinary and “A”Ordinary share prices rose by 49.0% and 53.1%respectively against the FTSE All-Share Index rise of

46.7%, as both classes of shares traded at a narrowerdiscounttotheirnetassetvalue.Thetimeweightedreturnoftheportfoliowas48.7%,comparedwithariseof6.2%

24

Investment manaGer’s rePort (continued)

in the company’s benchmark and a rise of 52.8% in theFTSEAll-Share Index–TotalReturn.The largestpositivecontributorstotheoverall261.0pencepersharegainof

theNetAssetValuewereOceanWilsonsHoldings+167.6pandBHP+13.0p.ThemajornegativecontributorswereArkTherapeutics–7.2pandPremierFoods–1.5p.

THEMATIC REVIEW (For Year ended 31 March 2010):

EMERGING MARKETS and OVERSEAS EARNERS (73.0% NAV)

Ocean Wilsons Holdings Limited (Mktcap£320.0m;26.5%Co; 39.3% NAV; +84.2%) has two principal subsidiaries.WilsonSonsLimited(58.25%owned)isoneofthelargestprovidersofmaritimeservices inBrazil, includingharbourandoceantowage,containerterminaloperations,offshoresupport services, logistics, small vessel construction andship agency, operating in some 30 locations throughoutBrazil and employing over 4000 people. Wilson SonsLimitedisanautonomousBermudacompanylistedontheSao Paulo Stock Exchange (BOVESPA) and LuxembourgStockExchange.OceanWilsonsInvestmentsLimited(100%owned) is an unquoted Bermudan investment companyinvesting in a portfolio of diversified assets includingglobal equities, fixed income and alternative assets, witha particular emphasis on emerging markets. Wilson Sonscontinued to report solid operating results for the yearended31December2009,withstrongperformancesfromthe towage,offshoreandport terminalbusinesses,whichwere responsible for 11% of total container activity inBrazil during the year. Operating margins improved as aresultofabettersalesmix,withanincreaseinhighmarginspecial towage operations and the number of platformsupplyvessels(PSVs)operatinginthepremiumpricedspotmarket. At year-end Wilson Sons operated three PSVs on

long-termcontractsandanotherfourPSVs(twoofwhichareownedbyMagallanesandcharteredtoWilsonSons)atspotrates,onshort-termrenewablecontracts.Thisyearafurthertwo PSVs are expected to be delivered from the shipyardoperationatGuaruja,alongwithfournewtugboatsaspartof theongoingtugrenewalprogramme.2010 isexpectedto be another solid year, with the Brazilian economyremaining relatively strong with forecasts predicting over5% growth, while the fast expanding Brazilian offshoreoil industrycontinuestoofferopportunitiesfortheGroupthrough its offshore vessel business and Brasco, locatedin Rio de Janeiro, which provides support services to theoilandgas industry. It is the intention tostartexpandingtheshipyardoperationatGuarujatoservicetheincreasinginternalandexternaldemandforoffshoresupportvessels,while the completion of the offshore joint venture withUltratugannouncedinOctober2009awaitsfinalregulatoryapproval. The Investment Portfolio (excluding cash andliquidity funds) rose 35.7%, compared with a return of30.0% for the MSCI, producing gains on the investmentportfolio of US$34.3m (2008 US$59.5m loss) whileexchange gains on the Real denominated cash balancesamountedtoUS$23.7m(2008US$23.6mloss),astheRealappreciated30%againsttheUSDollarbetweenMarchand

Sector Weighting One Year Performance at 31 March 2010 to 31 March 2010 Sector % %

Strategic 39.4 84.2 NaturalResources 17.3 32.0 SmallerCap/AIM 16.5 36.5 Property 9.3 42.1 CashFunds 0.9 0.4 LargeCap 8.8 50.3 Utilities 4.4 19.5 Insurance 2.6 13.0 MidCap 3.8 26.4 InvestmentTrusts 2.4 89.4 Hedge 0.0 (99.8) Cash&Commitments (5.4) 0.0

SECTOR WEIGHTING AND PERFORMANCE

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October2009.Thevalueofthetradinginvestmentportfolioandcashundermanagementincreasedby15.4%overtheyear from US$212.4m to US$245.2m, and over the nineyearsthatHanseaticAssetManagementhasmanagedtheportfolioithasincreasedinvalueby94.7%,comparedwith6.7% for the MSCI world index and a 48.9% return fromtheperformancebenchmarkoverthesameperiod.Duringthe year the investment managers deployed US$51m oftheportfolio’scashandliquidityfundsinnewinvestmentsand capital draw downs, and at year end the investmentportfolioheldUS$67mincashandliquidityfunds.Asecondinterimdividendof38centspershare for theyearended31December2009waspaidon26March2010.Thetotaldividendfortheyearof42centspershare(2008:30centspershare)representsa40%increaseover2008.

Fundamentals in Brazil continue to look encouraging. Itisoneofthetenlargesteconomiesintheworldandhasproducedamostdefensiveperformanceduringthecreditturmoil,withaforecastrealGDPgrowthof4-5%in2010.Headlineinflationisatfairlylowandstablerateandthereissomesparecapacityintheeconomy.Realinterestrateshave fallen to a very low level by Brazilian standards,while Brazil’s largely locally owned banks are generallywell capitalised and willing to lend to small businessesand consumers alike, both of which generally have verylow levels of debt relative to other emerging markets.Thecountryhasgooddemographicsandhasbeencreatingalotofnewjobs,whilepovertyhasbeengreatlyreduced.Brazilishostingthefootballworldcupin2014andRiohasbeenawardedthesummerOlympicsin2016.Thecountrycouldhaveaconsumerboomaheadofit.

BP(Mktcap£117.1bn;2.9%NAV;+40.7%)recentlyovertookRoyal Dutch Shell(Mktcap£114.0bn;1.2%NAV;+25.9%)inmarketcapitalisationtermsforthefirsttimeinmorethanthree years. BP has benefited from rising production, costcutsandasuccessfulexplorationprogrammeintheGulfofMexico, while Shell has been burdened by a heavy capitalexpenditureprogrammeamountingtoU$29bnin2009andU$28bnin2010andsevenyearsoffallingoilandgasoutput.TheoilpriceiswellabovetheU$60perbarrelthatBPneedstocoverdividendpaymentsandcapitalspendingprogrammefrom its cash flow. BP’s Q4 earnings disappointment wasconfined to a weaker than expected downstream resultwhereastheupstreamearningswereontrack.BPhaspledgedto improve itsunderlyingpre-taxprofitabilitybymorethanU$3bnbycuttingfurthercostsandincreasingefficiencyinitstroubledrefiningandmarketingarm,aswellasasignificantorganisationalrestructuringofitsexplorationandproductionunit.Aswellascuttingcosts,BPplanstoincreaseoilandgasproductionbyonetotwopercentyear-on-yearto2015.BPis

enteringthedeepwatersoffthecoastofBrazilwithaU$7bndeal to buy international oil and gas assets from DevonEnergy. Under the terms of the deal, BP will also expanditsoperationsintheGulfofMexico,whereit isalreadythelargestproducerofoilandgasandincreaseitsinterestsinAzerbaijan. Royal Dutch Shell reduced operating costs byU$2bnin2009andafurtherunderlyingcostreductionofatleastU$1bnisexpectedin2020.Shellhaslargeprojectssuchas Pearl, which will produce liquid fuels from gas, and theQatargas4liquifiednaturalgasplant,bothinQatarandduetocomeonstreambytheendofthisyear.RoyalDutchShell’sstrategyannouncementdemonstrated that thecompany isat an important turning point operationally, with both E&Pvolumesandfreecashflowsettoimprovesignificantlyona2-3yearview.

BG Group(Mktcap£38.5bn;3.7%NAV;+9.3%)expectstogrowproductionvolumesatthetopendofitsannualgrowthrateforecastof6-8%pato2020,wellaheadofthebehemothsoftheindustrywhicharestrugglingtokeepproductionflat.InBrazil,theGroupismovingforwardsandbelievesthatithasnetreservesofmorethan3bnboe,withnetproductionofmorethan400,000boe/dayby2020.Overall,theGroup’stotal reserves and resources increased by 10% to 14.5bnboeover theyear.Oneof themainreasonsforBGshares’weaknessrelativetothesectorisconcernoveritsearningsoutlook in the LNG division because of market fears of aglutofnaturalgas.BG’sLNGprofitabilityshouldberobustbecauseagoodproportionofnear-termLNGsalesarebasedon prices linked to a basket of oil products, and hence tothelaggedcrudeprice,whiletheflexibilityofthecompany’sspotcargoeshasincreasedwiththerecentopeningofitsUKterminalatMilfordHaven.BGenjoysalow-costgassupply,whileAsianbuyersinparticulararestillverykeentosignlong-termcontractsfromprospectiveLNGprojects.Thestrengthof recent test flow rates and the successful Tupi extendedwelltestcouldprovesignificantforprojecteconomics,withdrilling cost estimates likely to be reduced substantially.Knight Vinke continues its debate about the structure ofEni (Mktcap€69.1bn;2.2%NAV;+26.9%)whichishidinga lot of value. The EU regulator’s recent discussions withEni could lead to the separation of the Italian gas pipelineutilityfromtheE&PbusinessthroughasharedistributionorothermethodtoreduceEni’sinfluence.Melrose Resources(Mkt cap £344.0m; 1.3% NAV; +36.8%) issued its 2010capital expenditure programme, demonstrating that thecompanyoffersaninterestingexplorationanddevelopmentprogramme in 2010. Its 2009-year end production andreservereporthighlighteda131%reservesreplacementratiofor2009andan8.6%increaseinproduction.WeswitchedoutofHammersonintoCairn Energy(Mktcap£5.8bn;2.2%

26


NAV; +5.6%) before the latter’s results towards the end ofMarch,whenthecompanyquantifiedtheprospectiveupsideinRajasthanandinGreenland.TheRajasthanresourcebase,at6.5bnboe,continuestoimpressinitsscaleandpotential,whilethemanagementistargetingproductionof240kbopdcompared to the current agreed plateau of 175kbopd. Theheadline detail on the four current prospects due to drilloffshore Greenland in the second half of 2010 implies anaverageprospectsizeof1bnbbls,withthechanceofsuccesson each of the four prospects ranging from 7-14%. BHP Billiton(MktCap£137.0bn;3.5%NAV;+67.7%),thelargestmining company in the world, released its Q1 productionreport,withpetroleumoutputatarecordhighasitsprojectsinthedeepwaterGulfofMexicoandWesternAustraliabothdelivered.BHPcontinuestoexpectstronggrowthindemandforitscommodityrangeandmaintainstheviewthatalackofinvestmentsince2007willleavethesupplysidestrugglingtomatchdemand.Thegroup’sabilitytoreinvestinitspremierassetswhilebringingnewonesonstream,almostregardlessof the cycle, has become its most important competitiveadvantage.Globalsteelpricesaresettoriseafterminersandsteelmakersagreedaground-breakingchangeintheironorepricesystem.ThedealbyValeofBrazilandAnglo-AustralianBHPBillitonwithJapaneseandChinesemillsmarkstheendofthe40-year-oldbenchmarksystemofannualcontractsandlengthypricenegotiations.Theindustryhasinsteadagreedto move to quarterly contracts linked to the nascent ironore spot market. Not surprisingly, Australia’s competitionregulator has now extended its probe into the iron oreproductionjointventurebetweenBHPBillitonandRioTintoforasecondtime.

HSBC (Mkt cap £116.4bn; 2.8% NAV; +82.0%) showeda stronger commitment to emerging markets than everbefore,asitrevealedthatAsiaPacificaccountedfor130%ofheadlineprofitsin2009,andpredictedgrowthof6%intheregionover2010.HSBCisrunningoffthenow-closeddisastrous Household division, as a huge U$15.6bnimpairmentcharge,representing59%oftotalwritedowns,sawtheUSregionpostaU$7.7bn loss. In2010, therun-offofHouseholdshouldseereducedimpairmentswhiletheeffects of cost-savings will accelerate. GlaxoSmithKline’s(Mkt cap £65.7bn; 2.4% NAV; +22.6%) new CEO hasimplementedaseriesofboldinitiativesaimedatreducingthe company’s historic dependence on blockbusterproducts such as Advair, Avandia and Paxil to a businessbuilt on greater long-term sustainability and widergeographical footprint, with a particular emphasis onemerging markets. GlaxoSmithKline raised its full yeardividend by 7% and its commitment to a progressivepayout remains intact. The restructuring programme has

beenextendedandfurtherannualpre-taxsavingsof£500mby2012havebeenannounced.Theinvestmentthesiswassupportedby thenews thatNovartishas relinquishedUSrights to generic Advair. Advair is GSK’s biggest sellingdrug with some 17% of group revenues generated fromthe product. GSK is developing a next generation AdvairproductcalledRevolair,whichisexpectedtotakeUSsalesfrom Advair from 2013. Wolseley (Mkt cap £4.5bn: 1.1%NAV;+57.5%),theinternationalbuilders’merchant,wherehousingmarketswhichprovidemorethanhalfofsalesareshowing signs of stabilisation, has made substantial costsavings which will feed in to earnings. Wolseley recentlyannounced that it expects group-trading profit beforeexceptionalitemswillexceedcurrentmarketexpectations,primarily due to better than expected cost efficiencies.Wolseley has already announced cumulative cost savingsof £566m, sold businesses in Ireland, Czech Republic,Belgium,HungaryandSlovakia,andchangedmanagementintheUK,France,ItalyandacrossCentral&EasternEurope,reducingheadcountby22%acrossthegroup.Thegroup’soperatingmarginhas fallento2.9%fromahistoric rangeof 5.7%-6.6%, while the shares trade at 45% 2010E EV/sales against 63%-65% when the margin was last 6.3%.Management has so far said that only France may notreturn to steady state margins, arguing that all the otherbusinessesshouldbecapableofreturningtoformerlevels.

Experian Group(Mktcap£6.7bn;1.3%NAV;+52.2%),whichhelpsbusinessestomanagecredit risk,prevent fraudandtarget marketing offers, issued a Q3 trading update withthe outlook statement highlighting a likely pick-up in Q4organic growth revenue, due to strong growth in SouthAmerica (largely Brazil) and to a lesser extent growth inEMEA/Asia Pacific region, while the group is on track todeliveranotheryearofstrongfreecashflow.Experianisalsoreapingtherewardsof itsearlierthanplannedcompletionof a cost efficiency programme and a general culture ofcostcontainment.Experian’sagilemanagementteamhavemaintainedpositiveorganicgrowthandmarginimprovementthrough the economic downturn by flexing their offeringandsalesapproachinstepwithcustomerneeds.SSL(Mktcap £1.7bn; 1.8% NAV; +84%) tabled an excellent set ofinterim figures with the contribution from its new RussianacquisitionBLBVperformingbetterthanexpected,whileSSLnowgenerates85%ofrevenuesfromoutsidetheUK.SSLconfirmed that it ison track tomeet itsgoalof increasingits earnings per share by 50% over the three years to2012,aswellasannouncingthatitistotakeitsholdinginRussiansubsidiaryBLBVto75%foranadditional£140m,whileretaininganoptiontoacquiretheremaining25%until2011.Andor Technology (Mktcap£53.0m;5.5%Co;1.4%

27


NAV; +176.3%), the leading developer and manufacturerof high performance digital cameras and solutions foracademic, industrial and government applications globallyannounced excellent final figures with earnings up 80%and cash generation up 411%. Andor recently acquiredSwissbasedBitplaneAG,theleadingglobalsupplierof3Dand 4D microscopsy image analysis software for medicaland life science markets. Delta (Mkt cap £292.5m; 0.9%NAV; +84.5%) an international group with manufacturingoperations in Australia, Asia, South Africa and the UnitedStates has announced a recommended cash offer byValmontGroupPtyLtdat185pcashpershare,andhasnowinadditionagreed toDelta’spaymentofasecond interimdividendof4.8ppershare,whileathirdpartyhaswithdrawnfrom making a potential competing offer. Cape (Mkt cap£265.1m; 1.6% NAV; +250.2%), the international providerof essential support services to the energy and resourcessectors (75% of revenue), announced good finals, withimproved operating profit margins, strong free cash flow,a substantial reduction in debt, an intention to reinstatedividendpaymentslaterthisyearandafullprovisionforitsfuture asbestos liabilities. The proportion of Group profitsgenerated from outside the UK now represents 68% ofGroupoperatingprofitbeforecentralitems.QinetiQ Group(Mkt cap £885.0m; 0.6% NAV; +2.1%), the internationalprovideroftechnology-basedservicesandsolutionstothedefence,securityandrelatedmarkets,hasannouncedthatthecostofwarinAfghanistanhadresultedinlowerspendingbytheBritishandAmericangovernments.QinetiQhasbeenapoorly runbusiness,with inferiormargins,poorworkingcapitalandtoomuchcost.NewchiefexecutiveLeoQuinnisplanningtocutheadofficecostsbyhalfandsignificantly

reduce the number of senior management, as well aslaunchingtwointernalprogrammestoreshapethebusiness.TheUSgovernmentspends4%ofGDPondefence,orsomeU$660bnin2010.NCC Group(Mktcap£125.4m;3.7%Co;2.2%NAV;+36.2%)theinternational,independentproviderofEscrowandAssuranceTesting,announcedinterimprofitsup19%,dividendup17%andforwardvisibilityremainingvery strong. Herald Investment Trust (Mkt cap £299.0m;2.4%NAV;+89.4%),whichhasalargenumberofholdingstospreadstock-specificrisk,aswellashavingalargepartoftheportfolioexposedtooperatingexpenditureinareaslikebusiness process outsourcing, maintenance, data centres,disaster recovery, software subscription, often predictableand cash generative businesses. Most of Herald’s 231investee companies have zero debt, are cash-generativeandhavestrongbalancesheets,with57.5%ofgrossassetsin the UK, 22.2% in North America, and 7.5% in Asia andJapan.ImaginationTechnology,SDLandPhoenixITarethetopthreeholdings,or12%ofthetrust.Herald’sdiscounttoNAVhascomeinto18%againstasix-monthrangeof28%to16%.Camco International(Mktcap£22.9m;0.3%NAV;+44.4%),aglobalemissionsreductioncompanywitha20-yeartrackrecordendedtheyearwithnetcashof€28.3m.The company manages one of the world’s largest carbonportfolios,focussingonprojectdevelopmentandfinancingactivitiesinbothChinaandAmericatocreatevalue.CAP-XX(Mktcap£22.4m;0.2%NAV;+106.3%)isaworldleaderinthe design and manufacture of thin form super capacitorsand energy management systems, predominantly forportableelectronicdevices.ExpectationsremainhighthataleadingmobilephonewillbeproducedwithaCAP-XXsupercapacitorwithinthenextfinancialyear.

REAL ASSETS (5.8% NAV)

FromthemarketlowinJuly2009,allpropertycapitalvalueshaverisenby12.8%withtotalreturnsof18.8%.TheCBREUKMonthlyIndexreturnedatotalof2%inFebruary,ledbyacapitalgrowthfigureof1.4%.CentralLondonofficeswerethebestperformersoverthemonth,withtotalreturnsof2.6%andcapitalgrowthof2.1%.Shoppingcentresalsoperformedstrongly, with a total return of 2.4% and capital growth of1.8%.Demand,ledbyinternationalinvestors,isbeingjoinedby domestic private and public funds and companies, asdebtisrelativelyaffordableandisbecomingmoreavailable.Meanwhile,thesupplyofpropertyhasremainedverytightasbankshavebeenunwillingtocallinthebillionsofpoundsofproperty loanstheyhaveoutstandingtothesector,evenifinbreachofloan-to-valuecovenants.InJonesLangLaSalle’sfirst Lenders’ Expectation report, the property agent found

thatonlywell-capitalisedbanksarewillingandabletoofferfinance, despite values growing strongly in the UK sinceAugust,buttheywerebeingconsistentlyoutmanoeuvredondeals by cash-buyers. The report suggests that confidenceamong lenders has improved significantly, as values haverecovered, with 48% of respondents expecting to offerloansofmorethan£100mbytheendof2011.Atpresent,35% of respondents will make loans of between £25mand£50m,30%will lend£50m-£100m,and16%will lend£100m-£250m.Afive-yeartermisbackedbyalmost50%oflenders, with loan-to-value ratios of around 65% expecteduntil2011.ThemostactivelendersareGermanbanks,withfinance focused on prime stock. Investment statistics for2009compiledbyCushman&Wakefieldshowthat101dealsworth£6.66bnwerecompletedinCentralLondonlastyear,

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downfrom£6.99bnin2008and347dealsworth£19.42bnin2007.Arecoveryinthemarketfromthesummerisreflectedbydealsincreasingsharplyinthefinalquarter,when£2.95bnwas completed. This was up 76% on 2008, with cash-richoverseasinvestorsdominant.Someanalystsareconcernedthattherecoverycouldbedisruptedbybanksfloodingthemarket with distressed assets, thereby imbalancing supplyand demand. However, banks told Jones Lang LaSalle thattheywouldlooktosellonlyalimitednumberofprimeassetsin the short term and would seek partnerships in order totakeadvantageofanupturn,soproductislikelytoremainscarce in the short term. Interestingly business take-upof commercial property space in the Central London areaamountedto3.5msqftinthefirstthreemonthsofthisyear,anincreaseof20%fromthefourthquarterof2009,largelydriven by the City, which recorded the largest first quartertotalsince2000,accordingtoJonesLangLaSalle.ThelackofspeculativedevelopmentintheCentralLondoncommercialproperty market means rents are likely to continue risingin2010.

DREAM,themanagementcompanyofunquotedDV3(asat31December2009,thecompanyhaddrawnatotalof£303.7mof the £330.8m committed by investors, with £27.1mremainingundrawn.£264mofthetotalamountdrawnhasbeen returned to investors) and DV4 are somewhat morecautious,writing“Theabsenceofanabilitytoestablishwhatstabilisedlevelsofrentmightbe,whilsttheycontinuetofall,wouldappear tosuggest that themarket isoverpaying forassetsbyignoringtheseverityofrentaldeclines.Suchisthisboomthatequivalentyieldstodayfortheseassetsadjustingforrentaldeflationarenowlower i.e.moreexpensivethantheywerein2007.Whilstbuyersfortheseassetshavelargelybeenfromoverseas,morerecentlytheUKinstitutionalandretail funds,drivenbyadesiretoseekyieldascashpoursback in to their funds, have re-emerged. It is an uneasysituation in our opinion but is likely to continue for themoment,andprobablyuntilpostthegeneralelectioninmid2010whenanewgovernmentstartstheprocessofraisingtaxes”, when the City super tax may lead to tenants sub-letting London office space. Meanwhile from DV3’s (0.7%

NAV;+19.4%)perspective,ithasseenandwillcontinuetoseeanimprovementinvalues,particularlyasrentsarestartingtoimproveinspecificmarketslikeCityandWestEndofficesduetoincreasedtenantdemandandalackofspace.ThismightofferDV3anopportunitytoconsiderrealisations,giventheexpectationofhigherborrowingcostsastheyearprogresses.Meanwhile,fromDV4’s(26.2%Co;0.8%NAV;–5.0%)drawndown and outstanding commitment of £7.4m perspective,it presents a challenge; whether to follow the momentumor continue to pursue a cautious and reserved approach.DV4isstayingoutofthemarketandwillonlymakeselectedacquisitions where there is little competition and wherefundamentalsstandrigoroustestingandunderwriting.DV4hasacquired40HolbornViaduct,anewlycompletedofficebuildingof177,000sqftfor£76.5mreflectinganet7%yield,oneofthefirstmajortransactionstobecompletedthroughtheRBSGlobalRestructuringGroup.InarelatedtransactioninvolvingRBS,DV4haspurchaseda28%partnershipinterestinoneoftheUK’slargestprimeshoppingparks,Castlepoint,located on the edge of Bournemouth. Last July Hansteen(Mktcap£362.9m;2.2%NAV;+48.4%),thepanEuropeanpropertyinvestmentcompany,raised£200.8minnewcapitalandhasacquiredaGermanindustrialpropertyportfoliofor€330m, financedbyusing€70mfromHansteen’sexistingcash resources with the balance of €260m coming from aUniCredit loan“stapled”totheHBIportfolio.Thecompanyexpects the occupational market to remain challengingbutbelieves thathighyielding industrialpropertywith lowcapital values and a broad spread of tenants is a resilientanddefensive investmentmedium.Great Portland Estates(Mkt cap £983.1m; 2.0% NAV; +61.7%) announced a thirdquarter valuation and business update with the portfoliovaluationandNAVup8.7%and11.6%respectivelyforthequarter ending December. The Central London investmentanddevelopmentportfoliois80%WestEnd,20%City,72%offices, 28% retail. £161.5m of total commitments havebeenmadesincetherights issue, representing97%ofnetcapitalraised,withthreedevelopmentprojectsduetostartin the first half of 2010. As previously mentioned we soldHammerson(+57.8%)forCairnEnergy.

OUTSOURCING and SERVICES (8.4% NAV)

Goals Soccer Centres(Mktcap£80.1m;3.4%Co;1.3%NAV;+18.0%),thepremieroperatoroffive-a-sidesoccercentresintheUKannouncedfullyearresultsshowinglike-for-likesales were flat in 2009, reflecting snow disruption, whilelike-for-likesalesroseby1%forthegroup’scorefootballproductwhichgenerates75%ofsales.Therearecurrently34centresacrosstheUK,with23centresaddedsinceIPO,

withanaverageleaselengthof62years.Themanagementhavecutcentralcostsby£0.5mpafrom2010andbelievethe2010FootballWorldCupcouldprovideastimulusfortradeandtheboardremainsconfidentthataminimumofsixnewcentreswillbeaddedduring2010.Thereisastrongpipelineofover40sitesatheadsof termsstageor later,and a Los Angeles site is under construction and will be

29


openbymidyear.Hargreaves Services(Mktcap£174.8m;3.8%Co;3.1%NAV;+57.3%)isasupportservicesspecialistfortheenergyindustry,providinga“onestopshop”forthedistributionofcoalandcarbon-relatedmaterialsthroughitsintegratedsupplychainandownershipofstrategicassets,withcustomers in theUKand increasinglyacrossEurope.Thecompanyhasannouncedthe launchof theRocpowerrenewable electricity operation. The first plant will incurinvestmentof£3.5mwhilethesubsequentfiveplantswillcost£2.8meach.Onefullyrunningplantcouldcontribute£1.4mofoperatingprofitandtheenginesaredesignedtorun on a variety of different feedstocks. Interims showedcontinuedstrengthinitsEnergy&Commoditiesspecialitycoals business where the key determinant of divisionalprofitabilityisvolumeandmix.Thevolumeofcommoditiesblendedorprocessedhasincreased,particularlyinspecialitycoalmarketsintheUKandEurope.TheProductionDivisionminescoalatMaltbyandmanufacturescokeatMonkton.HargreaveshasannouncedthatithasapproachedUKCoal,theUK’sleadingbuttroubledcoalminer,aboutmergingtheirdeepminesinajointventurethatsharescapitalinvestmentandrisk,allowingbothcompaniesto focusontheirotherinterests.Morson Group(Mktcap£43.5m;3.9%Co;0.8%NAV; +60.5%), the UK’s leading provider of technicalengineering personnel and project design solutions,supplyingover9000highlyskilledwhitecollarpersonneltoaerospaceanddefence,nuclearandpower,railandothertechnical industries, announced that the unprecedentedeconomicenvironmenthasaffecteditsclientbaseincludingbothgovernmentbackedcontractsand thewider fundingoflargeinfrastructurecontracts.Newclientsandcontractscontinuetobewonandthegroupisgainingmarketshare,while it has a model built on long-term relationships andframeworkagreements.

All Leisure(Mktcap£44.8m;3.6%Co;0.8%NAV;+13.8%)differentiatesitselfbybeingdestination-ledandbyofferingsmaller, more intimate ships, while its cruise customersare mature (55yrs+), the largest and fastest growingdemographic within the leisure industry. The company

enjoys high levels of repeat business and strong revenuevisibilityduetoearlysalesandbenefitsfromthestrengthofitsestablishedbrandsincludingSwanHellenic,VoyagesofDiscovery,DiscoverEgyptandHebrideanIslandCruises.InMayitmakesthefinalpaymentontheDiscovery,leavingittheownerofthreeships,theothertwobeingtherecentlyacquired Hebridean Princess and the Alexander vonHumboldt. The company also leases the Minerva. RogerAllard, the foundingchairmanowns59%of thecompany.EAGA (Mktcap£361.0m;1.6%NAV;+0.6%) isa“Green”support services and business process outsourcingcompany. It is also the UK’s largest residential energyefficiencyprovider.Thecompanyoffersservices,productsand solutions that address the social, environmental andenergy efficiency objectives of Government. It has strongrelationshipswithLocalAuthoritiesandCentralGovernmentaswellasthesixmainenergycompanies(ScottishPowerinparticular)onwhomthefinancialburdenofdeliverywillbe centred. The potential solar PV opportunity has beensupportedbytherecentconfirmationofFeed-in-TariffswithheadsoftermsagreementswitheightLocalAuthoritiesandadvanced discussions with a further 14 Local Authorities.After 19 years running the Warm Front scheme for theGovernment, EAGA has the infrastructure to delivercomplex, large-scale, nationwide contacts and EAGA aimstoleveragethisinfrastructureandexpertise.Straight(Mktcap £11.3m; 9.4% Co; 0.5% NAV; +131.2%), is the UK’sleadingsupplierofspecialistkerbsiderecyclingcontainers,as well as a key supplier of a broad range of waste andrecyclingcontainersolutions.Thefinalquarterof2009sawthecompanytakeordersatunprecedentedlevels,leavingitinastrongpositionfor2010.Around4%ofrevenuesweregeneratedfromoverseascustomersin2009,andthisfigureis expected to increase substantially in 2010. Superglass(Mktcap£15.6m;4.1%Co;0.3%NAV;+83.8%),theUK’sleading independent manufacturer of glass mineral fibreinsulation products, announced that trading has been inlinewithexpectationsandthecompanycontinuestoreducedebtlevelsandishighlyfocusedoncashgeneration.

NON-DISCRETIONARY (5.9% NAV)

Ark Therapeutics (Mkt cap £23.0m; 3.1% Co; 0.3% NAV;–71.1%) received notice from the European MedicinesAgencythatanegativeopinionhasbeenadoptedforArk’sMarketing Authorisation Application for Cerepro, Ark’snovel gene-based therapy for operable malignant glioma(brain cancer). The main underlying objection from theregulator, which has not been resolved in this open labeltrial,concernsspecificallywhetherornotpatientstreated

withCerepromightforsomereasonhavebeenleftlongerby surgeons prior to re-intervention than those who didnotreceiveCerepro.Theprimaryendpoint isdeathorre-intervention,sotimetore-interventionisthemainefficacymeasureintheprimaryendpoint.FollowingapresentationtotheEMEA’sScientificAdvisoryGrouponOncologyaspartofthere-examinationprocedure,theAdvisoryGroupdidnotconsiderthatthecurrentstudyprovidessufficientlyreliable

30


evidence of clinical benefit and the recommendation wasmadethatArkneededtoconductafurtherclinicaltrialbeforethe product could be approved. Ark has withdrawn theircurrentMarketingAuthorisationApplication.Immupharma(Mkt cap £68.1m; 0.5% NAV; –2.3%) is a specialist drugdiscoveryanddevelopmentgroupworkingwiththeCentreNational de la Recherche Scientifique, France’s leadingscientific research institution. Its lead candidate for thetreatmentofLupus,LupuzorTM,achronic,life-threateningauto-immune disease, was licensed to Cephalon Inc, in atransactionworthuptoU$500minmilestonepaymentsinaddition to significant royalties. U$45m in cash has beenreceivedtodate,U$15minQ42008andU$30mpostyear-endinQ12009.ItisuptoCephalontogaintheconvictiontostartexpensivephasethreestudies.Premier Foods(Mktcap£761.1m;0.6%NAV;–10.1%)hasannouncedastrongimprovement inHovisprofitability,withbrandedsalesup6.4%reflectinggoodmarket-sharegainsforitskeybrands,but the benefit was offset by lower retailer brand salesandsignificantlyhigherpromotionalcostsinanextremelycompetitive market place. The company has providedgreatertransparencyaboutitsprofitsmakeupandlaidoutacrediblemodelfordeliveringearningsgrowthviamodesttop line and margin progression, along with significantdeleveraging.SaleshavebeensegmentedbetweenDrive,CoreandDefendbrands,plusretailerbrands,eachwithits

owndistinctstrategy.Premierhasalsoidentifiedsignificantcostreductionopportunitiesinprocurement,manufacturingandadministration thatshouldbolstermargins.Reducingworking capital and delivering in excess of £100m pa ofnet cash flow remain a priority for management. Scottish & Southern Energy’s (Mkt cap £10.2bn; 2.1% NAV;+5.2%) half-year results were in line with expectations,with profit increases achieved in Generation and Supply,Energy Networks and other business areas. Scottish &Southern Energy is 18 months into a five-year £6.7bncapex programme to March 2013, to drive future growthas capacity comes on stream. The interim dividend wasup6%,andbeyond2010SSEexpectstomaintainitstrackrecordofannualabove-inflationincreasesinthedividend.Thecompanyhasannouncedthat itremainsoncoursetodeliveramoderateincreaseinadjustedprofitbeforetaxfor2009/10asawhole,while itsbalancesheet remainsoneof the strongest in the global utility sector. Centrica (Mktcap £15.1bn; 2.4% NAV; +36.0%). Post the acquisitionof Venture Production and a 20% stake in British Energy,vertical integration has improved to over 60%, makingearnings less volatile and of a higher quality. As a result,it is possible Centrica may revise its dividend policy.Centrica’s results showed a strong performance from UKdownstream,namelyBritishGas,whichisnowbeingrunasasinglebusiness.

OTHER (4.7 % NAV)

Sentimenthasturnedagainstthenon-lifeinsurancesector,reflecting disappointment over the direction of insurancerates and the outlook for diminishing investment returns.The re-insurance industry’s capital base recovered morequickly in 2009 than most expected and this has putpressure on pricing for many lines in 2010. In the UK theassumption of a 5% “risk free” return was reasonable inthedecade1998-2008,because thiswas theaverage1-3year government bond redemption yield, which is now amuch lower figure. A recent meeting of non-life insurersgave a consistent, upbeat message on the underwritingoutlook, with 2010 average premium rates expected tobedownonlyslightlyfrom2009,suggestingthatmarginsremainattractiveoverallandthatratesofteningin2010isunlikelytonecessitateameaningfulcontractioninpremiumincome. BRIT Insurance Holdings’ (Mkt cap £590.6m;2.6%NAV;+13.0%)latestresultsexceededaveragemarketexpectations, driven by better than expected investmentreturns, along with a maintained “capital return” of 60pon the basis of a one-for-four share consolidation anda combined ratio of 94%, leaving the shares trading at

a 30% discount to prospective net tangible assets andyielding8%.BRITisnotabadbusinessbutneither is itagreat underwriting operation nor does it have an excitingROE record.Acatalyst is required to focusattentiononapotentialuplifttoearnings/ROEinorderforthesharestore-rate.ThegroupexpectsitsestablishedUKregionalnetworkto provide a credible alternative to the large incumbents(e.g.RSA,Aviva,AIG,Zurich), inahardeningmarket.BRITneedsto focuson improving itsunderwritingprofitability,sinceitskeyareaofunderperformancerelativetoitspeershas been its loss ratio. Lloyds Banking Group (Mkt cap£42.0bn;1.4%NAV;+47.0%)reported95.3%rightstake-up which enabled it to avoid the Government’s assetprotectionscheme,whilefearsregardingthebreaking-upofthegroupwereoverblown.Recentheadlinefigureslookedbetterthanconsensus,despiteimpairmentsaboveforecastduetoheavyprovisioninginIreland.Costsfellby5%,whilethecost to incomeratio improved from57.3% in2008 to48.4%in2009.Thetargetannualrun-ratecostssynergieshavebeenincreasedfrom£1.5bnto£2.0bnbytheendof2011. LBG has a 25% share of the UK mortgage market

31


anda£55bncommercialproperty loanbook,so it isverysensitive to UK economic growth and to property prices.Wesuspectregulatoryuncertaintyhasbeenoverpricedbyinvestorsandthat investorswillbesurprisedhowquicklyprovisioning will normalise, even if the economy is onlygrowing modestly. More recently, LBG announced thatimpairmentprovisionsarecurrentlytrendingatlowerlevelsthananticipatedandthegroupbelievesitwillbeprofitableonacombinedbasis in2010.ThekeyaspectofGalliford

Try’s(Mktcap£261.5m;0.7%NAV;+10.9%)latesttradingstatementisthatthegroupissecuringlandatcommerciallyattractive rateswhichunderpins thestrategicambition todoublethesizeofthehousingoperationoverthenextfewyears.By2012,Gallifordanticipatesthat80%ofitsprivatehousing output will be from land purchased at currentpricesandtheyarecurrentlyseeingverylittlecompetition.IncludingAffordableHousing,thegrouphasachieved75%ofitsprojectedsalesforJune2010.

OUTLOOK

Althoughthethreatofacorporatedebtcrisishasrecededmassively, as companies have slashed costs and focusedon generating cash against a background of a generallyimproving global economy, the Sovereign debt crisis isstillwithusinrelationtoGreeceandthethreatremainsinthe other highly indebted European countries like Spain,Portugal and possibly even Italy. Leverage has shiftedfromtheprivatesectortothepublicsectorasgovernmentsworldwidehaveincurredenormousbudgetdeficitsintheirquest to appease the majority. Indebted countries candefaultbynotpayingbackwhattheyowe,orbyresortingto inflation and one could argue that in some respectgovernmentbondsarepotentiallythenewsubprime,withGreece spiralling out of control against the backgroundof surging Greek government bond yields. Prospects forthe eurozone as a whole are looking worse in 2010 thanthosefortheUK.Growthwillneedtowaitforthedebtor/developed nations to repair their balance sheets andrecover their appetites, hopefully with the help of high-savingscountriesexpandingtheirdomesticdemand.

The UK’s real medium-term problem is not rising prices,but failing growth. The fiscal deficit of nearly 13% ofoutputmustbereinedin,andtheState,whoseexpansionhelped topreventaslide intodepression,will inevitablydecline as a source of demand. Public spending makesup52%ofUKgrossdomesticproduct,comparedwiththeState’sshareof40%whenLabourcametopowerin1997andpublicsectoremploymentisexpectedtofallsharplyas average spending cuts are introduced by whicheverwinningpoliticalparty.In2008,theUKhouseholdsector’soutstanding debts were equal to 181% of disposableincome,butnowUKconsumersaremorenervousabouttheir jobs and are saving keenly. Consumers are aboutto feel the first effects of earlier budget proposals toraise taxation by various means and a further squeezeis inevitable after the election. Tough labour marketconditions are likely to constrain wage growth, limiting

the scope for a sustained revival in consumer spending.Creditconditionsareexpectedto remaintight,andevenifbanksweretomakecreditmorereadilyavailable, it isdifficulttogaugewhatthetakeupmightbe,ashouseholddeleveraging has become a widespread theme as thehighdebtlevelsofthepastaregraduallyaddressed.Thecorporatesectorhasundertakenhugecutbacksincapitalspending,inventoriesandemploymentinitsdashforcash,leavingcashflow-to-GDPat itshighest level in40years.Encouragingly there is plenty of scope for re-hiring,rebuilding inventories and increasing capital spending ifthe current level of demand proves to be resilient. Suchan outcome would reduce unemployment and underpinconsumer confidence, thereby bolstering end demand.Interestingly the current surge in M&A activity suggestscompanies are not deploying their cash resources oncapitalexpenditureandbuildingworkingcapital,butarebuying market share, while simultaneously taking outmorecosts,creatingmoreefficienciesandsqueezingoutmore cash from the combined businesses, with knockon effects on unemployment and consumer confidence.Businessinvestmentremainsfarbelowwhatitoughttobein a cyclical recovery and boosting investment spendingis crucial to catalysing a sustainable recovery becauseit creates jobs. Recent surveys are pointing to strongergrowth in the services sector, while the Organisation forEconomic Co-operation and Development suggests thatthe UK economy will avoid a double-dip recession. Evenso, there is likely to be a growing divergence later thisyear between the drastic tightening of UK fiscal policy,which will affect companies that rely on British demandand Government spending, and the overall FTSE, anincreasinglyglobalindex.

Hansa Capital Partners LLP InvestmentManagerApril2010

32

PortfolIo InformatIonAsat31March2010

InvestmentFair value

£000Percentage of

Net AssetsOceanWilsonHoldingsLimited 84,643 39.4

BGGroupPlc 7,984 3.7

BHPBillitonPlc 7,571 3.5

HargreavesServicesPlc 6,570 3.1

BPPlc 6,234 2.9

HSBCHoldingsPlc 5,915 2.7

BRITInsuranceHoldingsPlc 5,577 2.6

HeraldInvestmentTrustPlc 5,171 2.4

GlaxoSmithKlinePlc 5,062 2.4

CentricaPlc 5,051 2.3

Top 10 Investments 139,778 65.0

HansteenHoldingsPlc 4,800 2.2

CairnEnergyPlc 4,754 2.2

NCCGroupPlc 4,650 2.2

EniS.p.A. 4,619 2.1

Scottish&SouthernEnergyPlc 4,404 2.1

GreatPortlandEstatesPlc 4,344 2.0

SSLInternationalPlc 3,862 1.8

EagaPlc 3,497 1.6

CapeIndustriesPlc 3,327 1.5

LloydsTSBGroupPlc 2,929 1.4


AndorTechnologyPlc 2,918 1.4

MelroseResourcesPlc 2,886 1.3

ExperianPlc 2,819 1.3

GoalsSoccerCentresPlc 2,696 1.3

RoyalDutchShellPlc 2,608 1.2

WolseleyPlc 2,292 1.1

DeltaPlc 1,903 0.9

DV4Ltd# 1,706 0.8

MorsonGroupPlc 1,680 0.8

AllLeisurePlc 1,618 0.8


Other Investments (31) 12,219 5.6

Total Investments 216,309 100.6

Netcurrentliabilities (1,295) (0.6)

Net Assets 215,014 100.00

Listed 176,192 81.45

AIMandOFEX 36,919 17.07

Unquoted 3,198 1.48

216,309 100.00

#Unquoted

DIreCtors’ remuneratIon rePort

33

The Company has four non-executive Directors. TheBoardasawholefulfilsthefunctionoftheRemunerationCommittee. The Board has appointed the CompanySecretary to provide relevant information when theDirectorsconsiderthelevelofDirectors’fees.

The Board carried out a review of the level of Directors’fees during the financial year and concluded thatthe emoluments paid to the Directors should remainunchanged.

The Board’s policy is that the remuneration of non-executive Directors should not include a performancerelatedelementandthatDirectorsdonotreceivebonuses,shareoptions,pensionsor long-termincentiveschemes;however itshould reflect theexperienceof theBoardasawhole,beappropriatefortheworkcarriedoutandtheresponsibilitiesundertaken.Itisintendedthatthispolicywillcontinue.

The fees for the non-executive Directors are within thelimits of £150,000 in total, set out in the Company’sArticlesofAssociation.

REMUNERATION COMMITTEE

POLICY ON DIRECTORS’ FEES

TheDirectorsmeetasaBoardonaquarterlybasisandatothertimesasnecessaryandthetablebelowsetsoutthenumberofmeetingsandtheattendanceofthembyeachDirector.

Strategic BoardAudit

Committee

Numberofmeetingsheld 1 5 2

Numberofmeetingsattended:

MrHammond-Chambers 1 5 2

LordBorwick 1 5 2

MrSalomon 1 5 2

ProfessorWood 1 5 2

DIRECTORS’ ATTENDANCE

It is the Board’s policy that all the Directors have aservice contract. None of the service contracts are for afixed term. The terms of their appointment provide thataDirectorshallretireandbesubjecttore-electionatthefirstAGMaftertheirappointmentandatleasteverythreeyearsby rotation thereafter.TheBoardhasdecidedthateach Director will retire annually at the AGM and seekre-election as appropriate. The terms also provide thateitherpartymaygivethreemonths’noticeandincertaincircumstancesaDirectormayberemovedwithoutnoticeandthatcompensationwillnotbedueonleavingoffice.

DIRECTORS’ SERVICE CONTRACTS

TheBoardhaspreparedthisreportinrelationtoallDirectorswhohaveservedduringtheyearandinaccordancewiththerequirementsofs.420to422oftheCompaniesAct2006.AnordinaryresolutionfortheapprovalofthisreportwillbeputtothemembersattheforthcomingAGM.

ThelawrequiresyourCompany’sAuditortoauditcertainofthedisclosuresprovided.ThedisclosuresontheDirectors’emolumentsfortheyearhavebeenauditedandtheAuditor’sopinionisincludedinitsreportonpage35.

34

DIreCtors’ remuneratIon rePort (continued)

ThegraphbelowshowsthefiveyearcumulativetotalreturntoshareholdersagainsttheFTSEAll-ShareIndextotalreturnandtheCompany’sPerformanceBenchmark.

Hansa Trust total return NAV

March 05 March 06 March 07 March 08 March 09 March 10

FTSE All-Share Index total return Benchmark

80

100

120

140

160

180

200

TheDirectorswhoservedintheyearreceivedthefollowingemolumentsintheformoffees:2010 2009£000 £000

MrHammond-Chambers(ChairmanoftheBoard) 30 30

LordBorwick 20 20

MrSalomon* 18 18

ProfessorWood 20 20

88 88

*InadditionMrSalomonreceivedfeesduringtheyearfromtwocompaniesinwhichtheCompanyhadaninvestment.ThesewereOceanWilsonsHoldingsLimitedandDV3Limited.

TheDirectors’RemunerationReportwasapprovedbytheBoardofDirectorson14June2010andsignedonitsbehalfbyMrHammond-Chambers.

YOUR COMPANY’S PERFORMANCE

BENCHMARK COMPARISON

APPROVAL

35

WehaveauditedthefinancialstatementsofHansaTrustPLCfortheyearended31March2010whichcomprisethegroupincomestatement,thegroupandparentcompanystatementsofchangesinequity,thegroupandparentcompanybalancesheet, the group and parent cashflow statement, and therelated notes. The financial reporting framework that hasbeen applied in their preparation is applicable law andInternational Financial Reporting Standards (IFRSs) asadoptedbytheEuropeanUnionand,asregardstheparentcompanyfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompaniesAct2006.

This report is made solely to the company’s members,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.Ourauditworkhasbeenundertakenso that we might state to the company’s membersthose matters we are required to state to them in anauditor’s report and for no other purpose. To the fullestextent permitted by law, we do not accept or assumeresponsibilitytoanyoneotherthanthecompanyandthecompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors’Responsibilities set out on page 22 the directors areresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.Our responsibility is to audit the financial statementsin accordance with applicable law and InternationalStandardsonAuditing(UKandIreland).Thosestandardsrequireus tocomplywith theAuditingPracticesBoard’s(APB’s)EthicalStandardsforAuditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financialstatements is provided on the APB’s website atwww.frc.org.uk/apb/scope/UKP.

Opinion on financial statements

Inouropinion:

• the financial statements give a true and fair view ofthestateofthegroup’sandoftheparentcompany’saffairsasat31March2010andofthegroup’sprofitfortheyearthenended;

• thefinancialstatementshavebeenproperlypreparedinaccordancewithIFRSasadoptedbytheEuropeanUnion;

• the parent company financial statements have beenproperlypreparedinaccordancewithIFRSasadopted

bytheEuropeanUnionandasappliedinaccordancewiththeprovisionoftheCompaniesAct2006;and

• the financial statements have been prepared inaccordancewiththerequirementsof theCompaniesAct 2006 and, as regards the group financialstatements,Article4oftheIASRegulation.

Opinion on other matters prescribed by the Companies Act 2006

Inouropinion:

• thepartoftheDirectors’RemunerationReporttobeaudited has been properly prepared in accordancewiththeCompaniesAct2006;and

• theinformationgivenintheDirectors’Reportforthefinancial year for which the financial statements arepreparedisconsistentwiththefinancialstatements.

Matters on which we are required to report by exception

Wehavenothingtoreportinrespectofthefollowing:

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• adequate accounting records have not been kept bytheparentcompany,orreturnsadequateforouraudithave not been received from branches not visited byus;or

• theparentcompanyfinancialstatementsandthepartoftheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccountingrecordsandreturns;

• certain disclosures of directors’ remunerationspecifiedbylawarenotmade;or

• we have not received all the information andexplanationswerequireforouraudit.

UndertheListingRules,wearerequiredtoreview:

• thedirectors’statement,setoutonpage16inrelationtogoingconcern;and

• the part of the Corporate Governance Statementrelating to the company’s compliance with the nineprovisionsoftheJune2008CombinedCodespecifiedforourreview.

Marcus SwalesSeniorStatutoryAuditorforandonbehalfofGrantThorntonUKLLPStatutoryAuditor,CharteredAccountantsLondon28June2010

InDePenDent auDItor’s rePort to themembers of hansa trust PlC

36

GrouP InCome statementfortheyearended31March2010

Revenue Capital Total Revenue Capital Total 2010 2010 2010 2009 2009 2009 Notes £000 £000 £000 £000 £000 £000 Gains/(losses)oninvestments 11 – 66,232 66,232 – (72,631) (72,631)(Loss)/gainonderivatives – (744) (744) – 1,891 1,891Exchangegainsoncurrencybalances – – – – 1 1Investmentincome 2 8,370 – 8,370 6,479 – 6,479 8,370 65,488 73,858 6,479 (70,739) (64,260)InvestmentManagementfee 3 (1,264) – (1,264) (1,276) – (1,276)Writebackofprioryears’VAT 97 – 97 – – –Otherexpenses 4 (618) – (618) (616) – (616) (1,785) – (1,785) (1,892) – (1,892) Profit/(loss) before finance costs and taxation 6,585 65,488 72,073 4,587 (70,739) (66,152)Financecosts 5 (1) – (1) (113) – (113) Profit/(loss) before taxation 6,584 65,488 72,072 4,474 (70,739) (66,265)Taxation 6 (4) – (4) (87) – (87) Profit/(loss) for the year 6,580 65,488 72,068 4,387 (70,739) (66,352) ReturnperOrdinaryand‘A’ non-votingOrdinaryshare 8 27.4p 272.9p 300.3p 18.3p (294.8p) (276.5p)

TheCompanydoesnothaveanyincomeorexpensethatisnotincludedintheprofitfortheyear.Accordinglythe“Profitfor theyear” isalso the“Totalcomprehensive incomefor theyear”,asdefined in IAS1 (revised)andnoseparateStatementofComprehensiveIncomehasbeenpresented.

The total column of this statement represents the Group’s Income Statement, prepared in accordance with IFRS.ThesupplementaryrevenueandcapitalreturncolumnsarebothpreparedunderguidancepublishedbytheAssociationofInvestmentCompanies.

Allrevenueandcapitalitemsintheabovestatementderivefromcontinuingoperations.

Theaccompanyingnotesareanintegralpartofthisstatement.

37

statement of ChanGes In equIty – GrouPfortheyearended31March2010

Capital Capital Share redemption Retained Share redemption Retained capital reserve earnings Total capital reserve earnings Total 2010 2010 2010 2010 2009 2009 2009 2009 Note £000 £000 £000 £000 £000 £000 £000 £000

Netassetsat1April 1,200 300 150,906 152,406 1,200 300 220,378 221,878 Profit/(loss)fortheyear – – 72,068 72,068 – – (66,352) (66,352)Dividends 7 – – (9,460) (9,460) – – (3,120) (3,120) Net assets at 31 March 1,200 300 213,514 215,014 1,200 300 150,906 152,406

statement of ChanGes In equIty – ComPany fortheyearended31March2010

Capital Capital Share redemption Retained Share redemption Retained capital reserve earnings Total capital reserve earnings Total 2010 2010 2010 2010 2009 2009 2009 2009 Note £000 £000 £000 £000 £000 £000 £000 £000

Netassetsat1April 1,200 300 150,906 152,406 1,200 300 220,378 221,878 Profit/(loss)fortheyear – – 72,068 72,068 – – (66,352) (66,352)Dividends 7 – – (9,460) (9,460) – – (3,120) (3,120) Net assets at 31 March 1,200 300 213,514 215,014 1,200 300 150,906 152,406


38


Group Group Company Company 2010 2009 2010 2009 Notes £000 £000 £000 £000

Non-current investmentsInvestmentinsubsidiary 10 – – 634 635Investmentsatfairvaluethrough profitorloss 11 216,309 139,027 216,309 139,027 216,309 139,027 216,943 139,662

Current assetsTradeandotherreceivables 13 631 1,150 631 1,150Cashandcashequivalents 14 1,824 12,452 1,824 12,452 2,455 13,602 2,455 13,602

Current liabilitiesTradeandotherpayables 15 (3,750) (223) (4,384) (858) Net current (liabilities)/assets (1,295) 13,379 (1,929) 12,744 Net assets 215,014 152,406 215,014 152,406

Capital and reservesCalledupsharecapital 16 1,200 1,200 1,200 1,200Capitalredemptionreserve 17 300 300 300 300Retainedearnings 18 213,514 150,906 213,514 150,906 Total equity shareholders’ funds 215,014 152,406 215,014 152,406 Net asset value per Ordinary and ‘A’ non-voting Ordinary share 19 895.9p 635.0p 895.9p 635.0p

TheFinancialStatementsonpages36to54wereapprovedbytheBoardofDirectorson14June2010andweresignedonitsbehalfby:

Alex Hammond–Chambers Chairman

balanCe sheet of the GrouP anD ComPanyasat31March2010

39

Cash flow statementfortheyearended31March2010

Group Group Company Company 2010 2009 2010 2009 Notes £000 £000 £000 £000

Cash flows from operating activities

Gain/(loss)beforefinancecostsandtaxation 72,073 (66,152) 72,073 (66,152)Adjustmentsfor: Realisedlosses/(gains)oninvestments 11 1,704 (13,181) 1,704 (13,181) Unrealised(gains)/lossesoninvestments 11 (67,936) 85,812 (67,935) 85,814 Effectofforeignexchangeratechanges – (1) – (1) Interestpaid – – – – Decreaseincurrentassetinvestments – – – – Decreaseintradeandotherreceivables 13 519 1,248 519 1,248 Increase/(decrease)intradeandother

payables 15 27 (114) 26 (116) Taxespaid (4) (87) (4) (87) Purchaseofnon-currentinvestments (16,075) (6,974) (16,075) (6,974) Saleofnon-currentinvestments 5,025 30,682 5,025 30,682

Net cash (outflow)/inflow from operating activities (4,667) 31,233 (4,667) 31,233

Cash flows from financing activities

Interestpaidonbankloans (1) (113) (1) (113) Dividendspaid (9,460) (3,120) (9,460) (3,120) Drawdown/(repayment)ofloans 3,500 (15,800) 3,500 (15,800)

Net cash outflow from financing activities (5,961) (19,033) (5,961) (19,033)

(Decrease)/increase in cash and cash equivalents (10,628) 12,200 (10,628) 12,200Cashandcashequivalentat1April 12,452 251 12,452 251Effectofforeignexchangeratechanges – 1 – 1

Cash and cash equivalents at 31 March 14 1,824 12,452 1,824 12,452


notes to the fInanCIal statements

40

1. ACCOUNTING POLICIES

ThefinancialstatementsoftheGroupandCompanyhavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(“IFRS”).Thesecomprisestandardsand interpretations approved by the InternationalAccounting Standards Board (“IASB”), together withinterpretationsoftheInternationalAccountingStandardsandStandingInterpretationsCommitteeapprovedbytheInternational Accounting Standards Committee (“IASC”)that remain in effect, to the extent that IFRS have beenadopted by the European Union. New and changedstandards in place, but not yet effective, have beenreviewedandtheBoarddonotconsidertheywillhaveamaterialeffectonthefinancialstatements.

These financial statements are presented in poundssterling because that is the currency of the primaryeconomic environment in which the Group operates.AspermittedbySection408oftheCompaniesAct2006,an income statement for the Company has not beenpresentedinthefinancialstatements.

The Company adopted the extended disclosurerequirements within IFRS7 for accounting periodsbeginning on or after 1 January 2009. The extendeddisclosurerequirementsintroducedafairvaluehierarchyandthisisdisclosedinnote22.

(a) Basis of preparation

Thefinancialstatementshavebeenpreparedonanhistoricalcost basis, except for the valuation of investments andderivativesat fairvalue.Theprincipalaccountingpoliciesadoptedaresetoutbelow.Wherepresentationalguidance,set out in the Statement of Recommended Practice(“SORP”)forinvestmenttrustsissuedbytheAssociationofInvestmentCompanies(“AIC”)inJanuary2009isconsistentwiththerequirementsofIFRS,theDirectorshavesoughttopreparethefinancialstatementsonabasiscompliantwiththerecommendationsoftheSORP.

(b) Basis of Consolidation

The Financial Statements comprise the accounts of theCompany and its subsidiary undertaking made up to31 March 2010. In the Company’s Financial Statementsthe investment in its subsidiary undertaking is stated atfairvalue.AllaccountingpoliciesareappliedconsistentlythroughouttheGroup.

(c) Presentation of income statement

In order to better reflect the activities of an investmenttrust company and in accordance with guidance issued

by the AIC, supplementary information which analysesthe income statement between items of a revenueand capital nature has been presented alongside theIncome Statement. In accordance with the Company’sstatus as a UK investment company under section 833of the Companies Act 2006, net capital returns maynot be distributed by way of dividend. Additionally, thenet revenue is the measure the Directors believe to beappropriateinassessingtheCompany’scompliancewithcertainrequirementssetoutins.1158CTA2010.

(d) Non-current investments

As the Company’s business is investing in financialassets, with a view to profiting from their total return inthe form of income received and increases in fair value,investmentsaredesignatedasfairvaluethroughprofitorloss on initial recognition in accordance with IAS 39. TheCompanymanagesandevaluatestheperformanceoftheseinvestments on a fair value basis in accordance with itsinvestmentstrategyandinformationabouttheinvestmentsisprovidedonthisbasistotheBoardofDirectors.

Investmentsarerecognisedandde-recognisedonthetradedate.Forlistedinvestmentsfairvalueisdeemedtobebidmarket prices or closing prices for SETS stocks sourcedfromtheLondonStockExchange.SETSistheLondonStockExchange electronic trading service covering most of themarketincludingallFTSE100constituentsandmostliquidFTSE250constituentsalongwithsomeothersecurities.

Unquoted investments are stated at fair value throughprofit or loss as determined by using various valuationtechniques, in accordance with the InternationalPrivate Equity and Venture Capital (“IPEVC”) ValuationGuidelines.Theseincludeusingrecentarmslengthmarkettransactions between knowledgeable and willing partieswhereavailable.

Gains and losses arising from changes in fair value areincludedinnetprofitorlossfortheperiodasacapitalitemintheincomestatementandareultimatelyrecognisedintheCapitalReserves.

(e) Derivative Financial Instruments

Over thecounterderivativeoptionsaremeasuredat fairvalueasvaluedbytheissuingbrokeratbid-marketprice.

(f) Cash and cash equivalents

Cashandcashequivalentscomprisecashatbank,short-termdepositsandcashfundswithanoriginalmaturityofthree months or less and are subject to an insignificantriskofchangesincapitalvalue.

41

notes to the fInanCIal statements (continued)

(g) Investment Income

Dividends receivable on equity shares are recognisedon the ex-dividend date. Where no ex-dividend date isquoted, dividends are recognised when the Company’srighttoreceivepaymentisestablished.UKdividendsarestatednetofrelatedtaxcredits,whileoverseasdividendsandREITincomeisstatedgross.

Underwriting commission is recognised in the revenuecolumn of the Income Statement insofar as it relates tosharesnotrequiredtobetakenup.Whereaproportionofthesharesunderwrittenarerequiredtobetakenup,thesameproportionofthecommissionreceivedisrecognisedin the capital column of the Income Statement, with thebalancetakentotherevenuecolumn.

(h) Expenses

All expenses are accounted for on an accruals basis.ExpensesarechargedthroughtherevenuecolumnoftheIncomeStatementexceptasfollows:

(i) expenses which are incidental to the acquisition ordisposalofaninvestmentarechargedtothecapitalcolumnoftheIncomeStatement;and

(ii) expensesarechargedtothecapitalreserves,viathecapital column of the Income Statement, where aconnectionwiththemaintenanceorenhancementofthevalueoftheinvestmentscanbedemonstrated.

(i) Taxation

The tax expense represents the sum of the tax currentlypayableanddeferredtax.

The tax currently payable is based on taxable profit forthe year. Taxable profit differs from profit before tax asreported in the Income Statement because it excludesitemsofincomeorexpensesthataretaxableordeductibleinotheryearsanditfurtherexcludesitemsthatarenevertaxableordeductible.TheGroup’sliabilityforcurrenttaxis calculated using tax rates that have been enacted orsubstantiallyenactedbythebalancesheetdate.

In line with the recommendations of the SORP, theallocationmethodusedtocalculatetaxreliefonexpensespresented against capital returns in the supplementaryinformation in the Income Statement is the “marginalbasis”. Under this basis, if taxable income is capable ofbeingoffsetentirelybyexpensespresentedintherevenuereturncolumnoftheIncomeStatement,thennotaxreliefistransferredtothecapitalreturncolumn.

Deferred taxation is the tax expected to be payable orrecoverableondifferencesbetweenthecarryingamounts

of assets and liabilities in the Financial Statements andthe corresponding tax bases used in the computation oftaxableprofitandisaccountedforusingthebalancesheetliability method. Deferred tax liabilities are recognisedfor all taxable temporary differences and deferred taxassets are recognised to the extent it is probable thattaxableprofitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.

Investmenttrustswhichhaveapprovalunders.1158CTA2010arenotliablefortaxationoncapitalgains.

Thecarryingamountofdeferredtaxassetsisreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferred tax is calculated at the tax rates expected toapply in the period when the liability is settled or theassetisrealised.DeferredtaxischargedorcreditedintheIncomeStatement,exceptwhenitrelatestoitemschargedorcrediteddirectly toequity, inwhichcase thedeferredtaxisalsodealtwithinequity.

(j) Foreign Currencies

Transactions denominated in foreign currencies arerecordedinthelocalcurrency,attheactualexchangeratesas at the date of the transaction. Assets and liabilitiesdenominated in foreign currencies at the year end arereportedattherateofexchangeprevailingattheyearend.Anygainorlossarisingfromachangeinexchangerates,subsequenttothedateofthetransaction,isincludedasanexchangegainorlossinthecapitalorrevenuecolumnoftheIncomeStatement,dependingonwhetherthegainorlossisofacapitalorrevenuenaturerespectively.

(k) Reserves

Capitalreserves–OtherThe followingarecreditedorcharged to this reserveviathecapitalcolumnoftheIncomeStatement:

– gainsandlossesonthedisposalofinvestments;

– exchangedifferencesofacapitalnature;and

– expenseschargedtothecapitalcolumnoftheIncomeStatement in accordance with the above accountingpolicies.

Capitalreserves–InvestmentHoldingGains

The followingarecreditedorcharged to this reserveviathecapitalcolumnoftheIncomeStatement:

– increases and decreases in the valuation ofinvestmentsheldattheyearend.

42


2. INCOME Revenue Revenue 2010 2009 £000 £000

Income from quoted investmentsDividends 3,446 3,474Overseasdividends 4,869 2,454

8,315 5,928

Other operating income InterestreceivableonAAAratedmoneymarketfunds 24 487Otherinterestreceivable 31 64

55 551

Total income 8,370 6,479

Total income comprises: Dividends 8,315 5,928Interest 55 551

8,370 6,479

3. INVESTMENT MANAGEMENT FEE Revenue Revenue 2010 2009 £000 £000

Periodicfees 1,264 1,276

1,264 1,276

DetailsoftheManagementAgreementaredisclosedintheReportoftheDirectorsonpages15and16.

RevenueReservesThe followingarecreditedorcharged to this reserveviatherevenuecolumnoftheIncomeStatement:

– net revenue recognised in the revenue column of theIncomeStatement.

43


4. OTHER EXPENSES Revenue Revenue 2010 2009 £000 £000

Secretarialservices 116 117Directors’remuneration 88 88Auditor’sremunerationfortheauditoftheGroupandCompany 26 26Auditor’sremunerationforthereviewoftheHalfYearlyReport 3 3Administrationfees 109 117ProductionanddistributionofAnnualandHalfYearlyReport 21 16Registrar’sfees 33 30Bankfeesandcharges 125 125Marketing 3 –Savingsscheme – (7)Other 94 101

618 616

TheGroupfinancialstatementsarerequiredtocomplywithregulation5(1)(b)oftheCompanies(DisclosureofAuditorRemunerationandLiabilityLimitationAgreements)Regulation2008.

5. FINANCE COSTS Revenue Revenue 2010 2009 £000 £000

Interestpayable 1 113

1 113

6. TAXATION

(a) Taxation Charge on Ordinary Activities Revenue Revenue 2010 2009 £000 £000

UKcorporationtax@28% – –Irrecoverableforeigntax 4 87

4 87

44


(b) Factors affecting tax charge for period

ApprovedinvestmenttrustsareexemptfromtaxoncapitalgainsmadebytheTrust.

ThetaxchargefortheperiodislowerthanthestandardrateofcorporationtaxintheUKof28%(2009:28%).Thedifferencesareexplainedbelow:

2010 2009 £000 £000

Totalgain/(loss)beforetaxation 72,072 (66,265)

Gain/(loss)multipliedbystandardrateofcorporationtax 20,180 (18,554)Effectsof:

Non-taxableUKcapital(gains)/losses (18,336) 19,807Non-taxableUKstockdividends (9) –Non-taxableUKinvestmentincome (1,732) (973)Excessadministrationexpensesused (68) (278)Incometaxableindifferentyears (35) –Irrecoverableforeigntax 4 87Disallowedexpenses – (2)

Currenttaxcharge 4 87

(c) Provision for deferred taxation

Thereisnorequirementtomakeaprovisionfordeferredtaxationinthecurrentorprioraccountingperiod.

(d) Factors that may affect future tax charges

The Company has not recognised a deferred tax asset of £1,786,000 (2009: £1,252,000), arising as a resultof having unutilised management expenses and loan relationship deficits. In addition, there are unrecogniseddeferredtaxassetsof£37,000(2009:£36,000)relatingtothesubsidiary’sunutilisedtaxlosses.Theexpenseswillonlybeutilised,totheextentthatthereissufficientfuturetaxableincome,orifthetaxtreatmentofthecapitalgainsmadebytheCompanyortheCompany’sinvestmentprofilechanges.Thesubsidiaryhastaxlosseswhichwillonlyberecoverabletotheextentthattherearesufficientfuturetaxableprofits.

7. DIVIDENDS PAID Revenue Revenue 2010 2009 £000 £000

Amountsrecognisedasdistributionstoequityholdersintheyear:Finaldividendfor2009:14.5p(2008:9.5p) 3,480 2,280Interimdividendsfor2010:25.0p(2009:3.5p) 6,000 840Unclaimeddividendsrefunded (20) –

9,460 3,120

45


Wesetoutbelowthetotaldividendspaidandproposedinrespectofthefinancialyear,whichisthebasisonwhichtherequirementsofs.1158CTA2010areconsidered.TheCompany’srevenueavailablefordistributionbywayofdividendfortheyearis£6,581,000(2009:£4,389,000).

Revenue Revenue 2010 2009 £000 £000

Interimdividendsfor2010:25.0p(2009:3.5p) 6,000 840Proposedfinaldividendfor2010:Nil(2009:14.5p) – 3,480

6,000 4,320

TheBoardarenotproposingafinaldividend.

8. RETURN ON ORDINARY SHARES (EQUITY)

Revenue Capital Total Revenue Capital Total 2010 2010 2010 2009 2009 2009

Returnspershare 27.4p 272.9p 300.3p 18.3p (294.8p) (276.5p)

ReturnsRevenuereturnpershareisbasedontherevenueattributabletoequityshareholdersof£6,580,000(2009:£4,387,000).

Capitalreturnpershareisbasedonthecapitalgainattributabletoequityshareholdersof£65,488,000(2009loss:£70,739,000).

Totalreturnpershareisbasedonthecombinationofrevenueandcapitalreturnsattributabletoequityshareholders,amountingtoanetgainof£72,068,000(2009loss:£66,352,000).

Both revenue and capital return are based on: 8,000,000 Ordinary shares (2009: 8,000,000) and 16,000,000 ‘A’non-votingOrdinaryshares(2009:16,000,000),inissuethroughouttheyear.

9. PROFIT OF THE COMPANY ATTRIBUTABLE TO SHAREHOLDERSThegainfortheyearaftertaxationdealtwithintheaccountsoftheCompanyis£72,068,000(2009loss:£66,352,000).

10. INVESTMENT IN SUBSIDIARYTheCompanyowns100%oftheOrdinarysharecapitalandvotingrightsofConsolidatedInvestmentFundsLimited,aninvestmentdealingcompany,registeredandoperatinginEngland.

46


11. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS Group and Groupand Company Company AIM& 2010 2009 Listed OFEX Unquoted Total Total £000 £000 £000 £000 £000

Costat1April2009 100,765 56,650 2,374 159,789 170,316Investmentholdinggains/(losses)at1April2009 13,247 (33,791) (218) (20,762) 65,050

Valuationat1April2009 114,012 22,859 2,156 139,027 235,366Movementsintheyear: Purchasesatcost 10,424 4,761 890 16,075 6,974Sales–proceeds (4,422) (603) – (5,025) (30,682)–(Losses)/gainsonsales (1,637) (67) – (1,704) 13,181Movementininvestmentholdinggains/(losses) 57,815 9,969 152 67,936 (85,812)

Valuation as at 31 March 2010 176,192 36,919 3,198 216,309 139,027

Costat31March2010 105,130 60,741 3,085 168,956 159,789Investmentholdinggains/(losses)at31March2010 71,062 (23,822) 113 47,353 (20,762)

176,192 36,919 3,198 216,309 139,027

Transaction costsDuring the year expenses were incurred in acquiring and disposing of investments classified as fair value throughprofitorloss.ThesehavebeenexpensedthroughcapitalandareincludedwithingainsoninvestmentsintheIncomeStatement.Thetotalcostswereasfollows:-

Group and Company 2010 2009 £000 £000

Purchases 59 29Sales 13 –

72 29

47


12. SIGNIFICANT HOLDINGS

TheCompany’sholdingsof10%ormoreofanyclassofsharesininvestmentcompaniesand20%ormoreofanyclassofsharesinnon-investmentcompaniesaredetailedbelow:

Exc.MinorityInterest Latest Profit Countryof %of available Total after incorporation Classof class audited capitaland taxforNon-investmentcompany orregistration capital held accounts reserves theyear US$000 US$000

OceanWilsonsHoldingsLimited Bermuda Ordinary 26.4 31.12.09 493,024 70,200

TheaboveisincludedaspartoftheinvestmentportfolioinaccordancewithIAS28–InvestmentinAssociates.

TheCompanyhasmaterialholdingsinthefollowingcompanieswhichrepresentmorethan3%ofanyclassofequitysharecapital:

Company Classofcapital %ofclassheld

StraightPlc Ordinary 9.36PolastarPlc Ordinary 8.17AltitudeGroupPlc Ordinary 6.54RoboticTechnologySystemsPlc Ordinary 6.06AndorTechnologyPlc Ordinary 5.51WorkGroupPlc Ordinary 4.89BVGroupPlc Ordinary 4.72LeadcomIntegratedSolutionsPlc Ordinary 4.55AcertecPlc Ordinary 4.38SuperglassHoldingsPlc Ordinary 4.05MorsonGroupPlc Ordinary 3.86HelesiPlc Ordinary 3.79HargreavesServicesPlc Ordinary 3.76NCCGroupPlc Ordinary 3.71AllLeisurePlc Ordinary 3.61MediaSquarePlc Ordinary 3.59GoalsSoccerCentresPlc Ordinary 3.37EngelEastEuropeNV Ordinary 3.13Cap-XXLtd Ordinary 3.09ArkTherapeuticsGroupPlc Ordinary 3.07

13. OTHER RECEIVABLES Group Group Company Company 2010 2009 2010 2009 £000 £000 £000 £000

Derivativesatfairvalueheldfortrading 16 869 16 869Prepaymentsandaccruedincome 581 253 581 253Recoverabledomestictax 34 28 34 28

631 1,150 631 1,150

48


14. CASH AND CASH EQUIVALENTS Group Group Company Company 2010 2009 2010 2009 £000 £000 £000 £000

Cashfunds 1,856 12,434 1,856 12,434Cashatbank (32) 18 (32) 18

1,824 12,452 1,824 12,452

15. CURRENT LIABILITIES Group Group Company Company 2010 2009 2010 2009 £000 £000 £000 £000

Bankloansandoverdrafts 3,500 – 3,500 –Duetosubsidiaryundertaking – – 638 639Othercreditorsandaccruals 250 223 246 219

3,750 223 4,384 858

DetailsofthebankloancanbefoundinNote21.

16. SHARE CAPITAL Company Company 2010 2009 £000 £000

Issuedandfullypaid 8,000,000Ordinarysharesof5p 400 40016,000,000‘A’non-votingOrdinarysharesof5p 800 800

1,200 1,200

The‘A’non-votingOrdinarysharesdonotentitletheholderstoreceivenoticesortovote,eitherinpersonorbyproxy,atanygeneralmeetingoftheCompany,butinallotherrespectsrankparipassuwiththeOrdinarysharesoftheCompany.

17. CAPITAL REDEMPTION RESERVE Group and Company 2010 2009 £000 £000

Balancesat31March2010and31March2009 300 300

49


18. RETAINED EARNINGS

Capital Reserves CapitalReserves Investment Investment Gains/ Gains/ Revenue Other (Losses) Revenue Other (Losses) 2010 2010 2010 2009 2009 2009Group £000 £000 £000 £000 £000 £000

Openingbalanceat1April 5,956 165,712 (20,762) 4,689 150,639 65,050Profit/(loss)fortheyear 6,580 (2,627) 68,115 4,387 15,073 (85,812)Dividendpaid (9,460) – – (3,120) – –

Closingbalanceat31March 3,076 163,085 47,353 5,956 165,712 (20,762)

Capital Reserves CapitalReserves Investment Investment Gains/ Gains/ Revenue Other (Losses) Revenue Other (Losses) 2010 2010 2010 2009 2009 2009Group £000 £000 £000 £000 £000 £000

Openingbalanceat1April 5,324 165,712 (20,130) 4,055 150,639 65,684Profit/(loss)fortheyear 6,581 (2,627) 68,114 4,389 15,073 (85,814)Dividendpaid (9,460) – – (3,120) – –

Closingbalanceat31March 2,445 163,085 47,984 5,324 165,712 (20,130) Note:OnlyRevenuereservesaredistributable,bywayofdividends.

19. NET ASSET VALUE 2010 2009

NetassetvalueperOrdinaryand‘A’non-votingOrdinaryshare 895.9p 635.0p

ThenetassetvalueperOrdinaryand‘A’non-votingOrdinaryshareisbasedonthenetassetsattributabletoequityshareholders of £215,014,000 (2009: £152,406,000) and on 8,000,000 Ordinary shares (2009: 8,000,000) and16,000,000‘A’non-votingOrdinaryshares(2009:16,000,000),inissueat31March2009.

20. COMMITMENTS AND CONTINGENCIES

TheCompanyhasenteredintoacommitmentagreementwithDV3Limited,anunquotedpropertyinvestmentcompany.Thecommitmentwasfor£807,438foraperiodofthreeyearsfrom30March2008.Theamountoutstandingat31March2010was£327,438(2009:£327,438).

The Company has entered into a further commitment agreement with DV4 Limited, also an unquoted propertyinvestmentcompany.Thecommitmentwasfor£10mforaperiodof fiveyears from7March2008andtheamountoutstandingat31March2010was£7,379,111(2009:£8,268,873).

InrelationtotherecoveryofVATfollowingHMRC’sacceptanceoftheEuropeanCourtofJusticeJudgement,theCompanyhasreceivedafurther£97,000duringtheyearfromitsformerinvestmentmanagers.TheBoarddoesnotnowexpecttorecoveranyfurtheramountsfromitsformerinvestmentmanagers.However,iftheresultofanactionbeingbroughtagainstHMRCbyothersissuccessful,furtheramountsmaybecomeduefromHMRC.

50


21. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS

Background

TheCompany’sfinancialinstrumentscomprisesecurities,cashbalances,debtorsandcreditorsarisingdirectlyfromitsoperations.AllfinancialassetsandliabilitiesareeithercarriedintheBalanceSheetattheirfairvalue,ortheBalanceSheetamountisareasonableapproximationoffairvalue.TherisksthattheGroupasawholeisexposedto,arethesameasthosefortheCompanyandarecoveredbelow.

Risk Objectives and Policies

TheobjectiveoftheCompanyistoachievegrowthofshareholdervaluecommensuratewiththeriskstaken,bearinginmindthattheprotectionoflong-termshareholdervalueisparamount.ThepolicyoftheBoardistoprovideaframeworkwithinwhichtheInvestmentManagercanoperateanddelivertheobjectivesoftheCompany.Inpursuingitsinvestmentobjective,theCompanyisexposedtoavarietyofrisksthatcouldresult ineitherareductionintheCompany’snetassetsand/orareductionoftheprofitsavailablefordividends.

Theserisks includethose identifiedbytheaccountingstandard IFRS7,beingmarketrisk(comprisingcurrencyrisk,interestrateriskandotherpricerisk),liquidityriskandcreditriskandtheDirectors’approachtothemanagementofthemaresetoutbelow.TheBoard,inconjunctionwiththeInvestmentManagerandCompanySecretary,overseetheCompany’sriskmanagement.

The objectives, policies and processes for managing the risks and the methods used to measure them are set outbelow;thesehavenotchangedfromthepreviousaccountingperiod.

Risks Associated with Financial Instruments:

Foreign currency risk

Foreigncurrencyrisksariseintwodistinctareaswhichaffectthevaluationoftheinvestmentportfolio.1)whereaninvestmentisdenominatedandpaidforinacurrencyotherthansterling;and2)whereaninvestmenthassubstantialnon-sterling cash flows. The Company does not normally hedge against foreign currency movements affecting thevalueoftheinvestmentportfolio,buttakesaccountofthisriskwhenmakinginvestmentdecisions.TheInvestmentManagermonitors theeffectof foreigncurrency fluctuations through thepricingof the investmentsby thevariousmarkets.ThelevelofinvestmentsdenominatedinforeigncurrenciesheldbytheCompanyat31March2010is2.3%oftheportfolio(2009:2.8%)andthereforetheportfoliovaluationisnotmateriallysensitivetodirectforeigncurrencyfluctuations.

Direct No direct Direct Nodirect foreign foreign foreign foreign currency currency Total currency currency Total risk risk risk risk 2010 2010 2010 2009 2009 2009 £000 £000 £000 £000 £000 £000

Investments 4,861 211,448 216,309 4,256 134,771 139,027Otherreceivablesexcludingprepayments – 617 617 – 1,129 1,129Cashfunds – 1,856 1,856 – 12,434 12,434Cashatbank – (32) (32) – 18 18Currentliabilities – (250) (250) – (223) (223)Bankloan – (3,500) (3,500) – – –

4,861 210,139 215,000 4,256 148,129 152,385

51


Interest rate risk

InterestratemovementsmayaffectthelevelofincomereceivableoncashdepositsandtheinterestpayableontheCompany’svariablerateborrowings.

TheCompanyhasbankingfacilitiesamountingto£30m(2009:£30m)whichareavailablefortheInvestmentManagertouse inpurchasing investments, thecostsofwhicharebaserateplusamargin.TheCompanydoesnotnormallyhedgeagainstinterestratemovementsaffectingthevalueoftheinvestmentportfolio,buttakesaccountofthisriskwhenaninvestmentismadeutilisingthefacility.ThelevelofbankingfacilitiesusedismonitoredbyboththeBoardandtheInvestmentManageronaregularbasis.TheimpactonthereturnsandnetassetsoftheCompanyforevery1%changein interestratesbasedontheamountdrawndownattheyearendunderthefacilitywouldbe£35,000(2009:Nil).Thelevelofbankingfacilitiesutilisedat31March2010was£3.5m(2009:£Nil).

Interestratechangeswillalwaysimpactequityprices.Thelevelanddirectionofchangeinequitypricesissubjecttoprevailinglocalandworldeconomicconditionsaswellasmarketsentiment,allofwhichareverydifficulttopredictwithanycertainty.TheCompanyhasfloatingratefinancialassetsconsistingofbankbalancesandcashfundsthathavereceivedaverageratesofinterestduringtheyearof0.0%onbankbalancesand0.2%oncashfunds.

Cash flow No Cashflow No interest interest interest interest raterisk raterisk Total raterisk raterisk Total 2010 2010 2010 2009 2009 2009 £000 £000 £000 £000 £000 £000

Investments – 216,309 216,309 – 139,027 139,027Otherreceivablesexcludingprepayments – 617 617 – 1,129 1,129Cashfunds 1,856 – 1,856 12,434 – 12,434Cashatbank (32) – (32) 18 – 18Currentliabilities – (250) (250) – (223) (223)Bankloan (3,500) – (3,500) – – –

(1,676) 216,676 215,000 12,452 139,933 152,385

Other price risk

Bythenatureofitsactivities,theCompany’sinvestmentsareexposedtomarketpricefluctuations.Netassetvaluesare calculated and reported daily to the London Stock Exchange. The Investment Manager and the Board monitorthe portfolio valuation on a regular basis and consideration is given to hedging the portfolio against large marketmovements.

TheCompany’sinvestmentinOceanWilsonsislargebothinabsoluteterms,£84.6m(2009:£48.6m)andasaproportionoftheportfolio,39.1%(2009:35.0%).Shareholdersshouldbeawarethatifanythingofasevereanduntowardnatureweretohappentothiscompany,itcouldresultinasignificantreductionintheNAVandshareprice.However,itisaninvestmenttheBoardpayscloseattentiontoanditshouldbepointedoutthattherisksassociatedwithitareverydifferentfromthoseoftheothercompaniesrepresentedintheportfolio.TheBoarditselfhasrecentlyundertakenathoroughreviewofitsbusinessandprospectsanddeterminedthatitsfutureholdsalotofpromise.AsaconsequencetheBoardbelievestheriskinvolvedintheinvestmentisworthwhile.

Theperformanceof theportfolioasawhole isnotdesignedtocorrelatewiththatofanymarket index.ShouldtheportfoliooftheCompany,asdetailedonpage32,riseorfallinvalueby10%fromtheyearendvaluation,theeffectontheGroupprofitandequitywouldbeanequalriseorfallof£21.6m(2009:£13.9m).TheCompanygearing,whichiscurrentlyat1.76%(2009:0.15%),wouldincreaseto1.96%(2009:0.16%)shouldtheCompany’sportfoliofallinvalueby10%.TheimpactoftheCompany’sderivativestrategies,whicharedetailedbelow,wouldnotmateriallyaffectthevalueoftheportfoliofollowinga10%fallinitsvalue.

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Derivatives

TheInvestmentManagermayonlyusederivativeinstrumentsinordertomitigatethemarketrisktotheportfolio.AttheyearendtherewasaPutSpreadFTSE100IndexOptionopenasdetailedbelow,whichprovidesalimiteddegreeofprotectionfromafallinthevalueoftheFTSE100Indexofbetween10%and20%fromtheirindividualreferencelevelsorbetweentheUpperandLowerStrikePricesbelow.

Market Value Upper Lower as at Index Notional Value Strike Price Strike Price 31 March 2010 Expiry Date

FTSE100 £5,318,000 4,800 4,300 £16,000 18June2010

Credit Risk

TheCompanyonlytransactswithregulatedinstitutionsonnormalmarketterms,whicharetradedateplusonetothreedays.ThelevelsofamountsoutstandingfrombrokersareregularlyreviewedbytheInvestmentManager.Thedurationofcreditriskassociatedwiththeinvestmenttransactionsistheperiodbetweenthedatethetransactiontookplace,thetradedate,thedatethestockandcasharetransferredandthesettlementdate.Thelevelofriskduringtheperiodisthedifferencebetweenthevalueoftheoriginaltransactionanditsreplacementwithanewtransaction.Theamountsdueto/(from)brokersat31March2010areshowninNote13.

TheCompany’smaximumexposuretocreditriskonOTCoptionsandcashfundsis£1,872,000(2009:£13,321,000).Amountsreceivable inrelationtooptionsopenattheyearendamountedto£16,000(2009:£869,383).Therelatedcreditriskismanagedbypurchasingtheoptionsfromaregulatedinstitution.SurpluscashisplacedinAAA-ratedcashfunds.

Liquidity Risk

TheliquidityrisktotheCompanyisthatitisunabletomeetitsobligationsastheyfalldue,duetoalackofavailablecashandaninabilitytodisposeofinvestmentsinatimelymanner.AsubstantialproportionoftheCompany’sportfolioisheldinliquidquotedinvestments;howeverthereisalargeholdinginOceanWilsonsHoldingsLtdof39.1%(2009:35.0%),andotherholdingsinAIMandunquotedinvestmentsof18.5%(2009:16.4%).

TheInvestmentManagertakesintoconsiderationtheliquidityofeachinvestmentwhenpurchasingandselling,inordertomaximisethereturnstoshareholdersbyplacingsuitabletransactionlevelsintothemarket.Specialconsiderationisgiventoinvestmentsthatrepresentmorethan5%oftheinvesteecompany.Adetailedlistofthetop30investmentsheldat31March2010isshownonpage32,togetherwithasummarytabledetailingthemarketsonwhichtheinvestmentsarequoted.Thiscanbeusedbroadlytoascertainthelevelsofliquiditywithintheportfolio,althoughliquiditywillvarywitheachinvestment.

TheCompany’sfinancialliabilitiesat31March2010consistofashort-termbankloanamountingto£3.5m(2009:Nil)thatbearsinterestbasedontheprevailingLIBORrateplusanagreedmargin.ThisloanispartofatotalrevolvingcreditfacilitywithINGBankNVof£30m(2009:£30m).Thefacilityisacommittedfacilityrepayableonorbefore11February2011andsubjecttoacovenantrequirementofaminimumadjustednetassetvalueof£80m.TheCompanyhasundrawnloansfromthisfacilityof£26.5m(2009:£30.0m).TheCompanyholdsthisfacilityforuseatshortnoticeforitsinvestmentactivities.Iffullydrawntheloanwouldform13.9%(2009:21.6%)ofthecurrentvalueoftheinvestmentportfolio.

Capital Management

TheCompanyconsidersitscapitaltobeitsissuedsharecapitalandreserves.TheBoardregularlymonitorsitssharediscountpolicyandthelevelofdiscountsandwhilstithastheoptiontore-purchaseshares,itconsidersthatthebestmeansofattainingagoodratingforthesharesistoconcentrateongoodshareholderreturns.

However,theBoardbelievestheabilityoftheCompanytore-purchaseitsown‘A’non-votingOrdinarysharesinthemarketmaypotentiallyenableittobenefitallequityshareholdersoftheCompany.There-purchaseof‘A’non-votingOrdinarysharesatadiscount to theunderlyingnetassetvaluewouldenhancethenetassetvaluepershareof the

53


remaining equity shares and it might also enable the Company to address more effectively any imbalance betweensupplyanddemandfortheCompany’s‘A’non-votingOrdinaryshares.

22. FAIR VALUE HIERARCHY

TheCompanyadoptedtheamendmentstoIFRS7‘Financial Instruments:Disclosures’effectivefrom1January2009.Theseamendmentsrequireanentitytoclassifyfairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurements.Thefairvaluehierarchyshallhavethefollowinglevels:

– Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

– Level2:inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetsorliability,eitherdirectly(ieasprices)orindirectly(iederivedfromprices);and

– Level3:inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

Thefinancialassetsandliabilitiesmeasuredatfairvalueinthestatementoffinancialpositionaregroupedintothefairvaluehierarchyat31March2010asfollows:

Level 1 Level 2 Level 3 Total £000 £000 £000 £000

Financial assets at fair value through profit or lossQuotedequities 213,111 – – 213,111Unquotedequities – – 3,832 3,832Derivatives – 22 – 22

Total 213,111 22 3,832 216,965

Financial liabilities at fair value through profit or loss

Derivatives – (6) – (6)

Netfairvalue 213,111 16 3,832 216,959

AllamountsincludedabovearevaluedinaccordancewiththeaccountingpoliciesinNote1.

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Therehavebeennotransfersduringtheyearbetweenlevels1and2.AreconciliationoffairvaluemeasurementsinLevel3issetoutinthefollowingtable.

Equity investments Total £000 £000

OpeningBalance 2,791 2,791Purchases 890 890Sales – –Totalgainsorlossesincludedingainsoninvestmentsintheincomestatement: –onassetssold – ––onassetsheldatyearend 151 151

Closing Balance 3,832 3,832

23. RELATED PARTIES

DetailsoftherelationshipbetweentheCompanyandHansaCapitalPartnersLLP,includingamountspaidduringtheyearandowingat31March2010aredisclosedintheReportoftheDirectorspages15and16andinNote3above.

24. CONTROLLING PARTIES

At 31 March 2010 Nicholas B. Dill, Jr and Codan Trust Company Limited held 51.2% of the issued Ordinary shares.AdditionalinformationisdisclosedintheReportoftheDirectors,“SubstantialShareholders”onpage15.

notICe of the annual General meetInG

55

Notice is hereby given that the Annual General MeetingofHansaTrustPLCwillbeheldatTheWashingtonHotel,5 Curzon Street, London W1J 5HE on 3 August 2010 at11:30am,forthefollowingpurposes:

Ordinary Business

1 To receive and consider the audited FinancialStatements and the Report of the Directors for theyearended31March2010.

2 To re-appoint the Auditor and to authorise theDirectors to determine the remuneration of theAuditor.

3 Tore-electMrHammond-Chambers(abiographyandboard endorsement can be found on page 10), whoretires,aDirectoroftheCompany.

4 To re-elect Lord Borwick (a biography and boardendorsementcanbefoundonpage10),whoretires,aDirectoroftheCompany.

5 To re-elect Mr Salomon (a biography and boardendorsementcanbefoundonpage10),whoretires,aDirectoroftheCompany.

6 To re-elect Professor Wood (a biography and boardendorsementcanbefoundonpage10),whoretires,aDirectoroftheCompany.

7 To approve the Directors’ Remuneration Report andauthorisetheBoardtodeterminetheremunerationoftheDirectors.

Special Business

To consider, and if thought fit, pass the followingresolutionswhichwillbeproposedasspecialresolutions:

Authority to re-purchase up to 14.99% of the ‘A’ non-voting Ordinary shares

8 THAT the Company be unconditionally authorisedto make market purchases of up to an aggregate of2,398,400‘A’non-votingOrdinarysharesof5poftheCompanyataprice(exclusiveofexpenses)whichis:

(a) notlessthan5ppershare;and

(b) not more than 5% above the average of themiddle-market quotations (as derived from theDailyOfficialListoftheLondonStockExchange)for ‘A’non-votingOrdinarysharesof5peach inthe five business days immediately precedinganysuchpurchase;AND

THATtheauthorityconferredbythisresolutionshallexpireon the date of the next AGM (except in relation to thepurchaseofshares,thecontractforwhichwasconcludedbeforesuchdateandwhichmightbeexecutedwhollyorpartlyaftersuchdate).

ByorderoftheBoardHansa Capital Partners LLP Secretary 50CurzonStreet24June2010 LondonW1J7UW

Oxford Street

Upper Brook Street Grosvenor

New Bond Street Con

duit Stre

et

Regent Street

Park Lane

Square

Square Grosvenor Street

Curzon Street

Piccadilly

Piccadilly

St James’s StreetQ

ueen’s Walk

Berkeley StreetTheWashington

Curzon Street

MAYFAIR

GreenPark

Hyde ParkCorner

BondStreet

OxfordCircus

56

NOTES

1 Ordinary shareholders, proxies and authorisedrepresentatives of corporations which are Ordinaryshareholders,areentitled toattend themeeting.Tobeentitledtoattendandvoteatthemeeting(andforthepurposeofthedeterminationbytheCompanyofthenumberofvotes theymaycast),membersmustbe entered on the Company’s register of membersby 6:00pm on 1 August 2010 (‘the specified time’).Changestotheregisterofmembersaftertherelevantdeadline shall be disregarded in determining therightsofanypersontoattendandvoteatthemeeting.

2 If themeeting isadjourned toa timenotmore than48 hours after the specified time applicable to theoriginal meeting, that time will also apply for thepurposeofdetermining theentitlementofmemberstoattendandvote(andforthepurposeofdeterminingthenumberofvotestheymaycast)attheadjournedmeeting. If however the meeting is adjourned for alongerperiodthen,tobesoentitled,membersmustbeenteredontheCompany’sregisterofmembersatthe timewhich is48hoursbefore the time fixed fortheadjournedmeetingor,iftheCompanygivesnoticeof the adjourned meeting, at the time specified inthatnotice.

3 A member present in person or by proxy shall haveonevoteonashowofhands.OnavotebypolleveryMemberpresentinpersonorbyproxyshallhaveonevoteforeveryOrdinaryshareofwhichhe/sheistheholder.

4 Amemberentitledtoattendandvoteatthismeetingis entitled to appoint one or more proxies to attendand,uponapoll,tovoteinsteadofhim/herprovidedthat each proxy is appointed to exercise the rightsattached to a different share or shares held bythat member. A proxy need not also be a member.To appoint more than one proxy, the Proxy Formshould be photocopied and completed for eachproxy holder. The proxy holder’s name should bewrittenontheProxyFormtogetherwiththenumberofsharesinrelationtowhichtheproxyisauthorisedto act. All proxy forms should be enclosed in thesameenvelope.

5 Inthecaseofjointholders,wheremorethanoneofthejointholderspurportstoappointaproxy,onlytheappointmentsubmittedbythemostseniorholderwillbeaccepted.Seniority isdeterminedbytheorder inwhich the names of the joint holders appear in the

register of members in respect of the joint holding(thefirst-namedbeingthemostsenior).

6 To be valid any proxy form or other instrumentappointingaproxymustbereceivedbypost,(duringnormal business hours only) by hand at CapitaRegistrars, PXS, 34 Beckenham Road, Beckenham,KentBR34TUoraproxycanbelodgedelectronicallyatwww.capitashareportal.com,ineachcasenolaterthan11:30amon1August2010.

7 The return of a completed proxy form, other suchinstrument or any CREST Proxy Instruction (asdescribedbelow)willnotpreventashareholderfromattending theAnnualGeneralMeetingandvoting inpersonifhe/shewishestodoso.

8 Anycorporationwhichisamembercanappointoneormorecorporaterepresentativeswhomayexerciseonitsbehalfallofitspowersasamemberprovidedthattheydonotdosoinrelationtothesameshares.

9 Asat29June2010(beingthelastbusinessdaypriorto the publication of this Notice) the Company’sissued share capital consists of 8,000,000 Ordinaryshares, carrying one vote each. Therefore, the totalvotingrightsintheCompanyasat3August2010are8,000,000.

10 CRESTmemberswhowishtoappointaproxyorproxiesthrough the CREST electronic proxy appointmentservicemaydosobyusingtheproceduresdescribedin the CREST Manual. CREST Personal Members orother CREST sponsored members, and those CRESTmemberswhohaveappointedaserviceprovider(s),shouldrefertotheirCRESTsponsororvotingserviceprovider(s),whowillbeabletotaketheappropriateactionontheirbehalf.

11 InorderforaproxyappointmentorinstructionmadeusingtheCRESTservicetobevalid, theappropriateCREST message (a “CREST Proxy Instruction”)must be properly authenticated in accordance withEuroclear UK & Ireland Limited’s specifications,and must contain the information required for suchinstruction, as described in the CREST Manual(available via www.euroclear.com/CREST). Themessage, regardless of whether it constitutes theappointment of a proxy or is an amendment to theinstruction given to a previously appointed proxymust,inordertobevalid,betransmittedsoastobereceivedbytheissuer’sagentIDRA10by11:30amon

notICe of the annual General meetInG(continued)

57

1August2010.Forthispurpose, thetimeofreceiptwill be taken to be the time (as determined by thetime stamp applied to the message by the CRESTApplication Host) from which the issuer’s agent isabletoretrievethemessagebyenquirytoCRESTinthemannerprescribedbyCREST.Afterthistimeanychangeof instructions toproxiesappointedthroughCREST should be communicated to the appointeethroughothermeans.

12 CREST members and, where applicable, their CRESTsponsors, or voting service providers should notethat Euroclear UK & Ireland Limited does not makeavailable special procedures in CREST for anyparticular message. Normal system timings andlimitationswill,therefore,applyinrelationtotheinputofCRESTProxyInstructions.ItistheresponsibilityoftheCRESTmemberconcernedtotake(or,iftheCRESTmember isaCRESTpersonalmember,orsponsoredmember,orhasappointedavotingserviceprovider,to procure that his CREST sponsor or voting serviceprovider(s)take(s))suchactionasshallbenecessaryto ensure that a message is transmitted by meansof the CREST system by any particular time. In thisconnection, CREST members and, where applicable,theirCRESTsponsorsorvotingsystemprovidersarereferred,inparticular,tothosesectionsoftheCRESTManualconcerningpracticallimitationsoftheCRESTsystemandtimings.

13 The Company may treat as invalid a CREST ProxyInstructioninthecircumstancessetoutinRegulation35(5)(a) of the Uncertificated Securities Regulations2001.

14 Any member attending the meeting has the rightto ask questions. The Company must cause to beansweredanysuchquestionrelatingtothebusinessbeingdealtwithat themeetingbutnosuchanswermaybegiven if: (a) todosowould interfereundulywith the preparation for the meeting or involve thedisclosureofconfidentialinformation;(b)theanswerhasalreadybeengivenonawebsiteintheformofananswer to a question; or (c) it is undesirable in theinterests of the Company or the good order of themeetingthatthequestionbeanswered.

15 Acopyofthisnotice,andotherinformationrequiredbysection311Aof theCompaniesAct2006,canbefoundatwww.hansatrust.com

16 The following documents will be available forinspection at the registered office of the Companyduringusualbusinesshoursonanyweekday(exceptSaturdays and public holidays) until the date of theAGMandat theplaceof theAGMforaperiodof15minutespriortoandduringthemeeting:

a) acopyoftheCurrentArticlesofAssociation;and

b) acopyofallDirectors’ServiceContracts.

notICe of the annual General meetInG(continued)

Investor InformatIon

58

TheCompanycurrentlymanagesitsaffairssoastobeaqualifyinginvestmenttrustforISApurposes.Asaresult,undercurrentUKlegislation,theOrdinaryand‘A’non-votingOrdinarysharesqualifyforinvestmentinthestocksandsharescomponentofanon-CATStandardISAuptothefullannualsubscriptionlimit.ItisthepresentintentionthattheCompanywillconductitsaffairssoastocontinuetoqualifyforISAproducts.

CAPITAL STRUCTURE

TheCompanyhas8,000,000Ordinarysharesof5peachand16,000,000‘A’non-votingOrdinarysharesof5peachin issue. The Ordinary shareholders are entitled to onevoteperOrdinaryshareheld.The‘A’non-votingOrdinarysharesdonotentitletheholderstovoteorreceivenoticeofmeetings,butinallotherrespectstheyhavethesamerightsastheCompany’sOrdinaryshares.

CONTACT DETAILS

HansaTrustPLC50CurzonStreet,LondonW1J7UWTel:02076475750Fax:02076475770Website:www.hansatrust.comEmail:[email protected]

TheCompany’swebsiteincludesthefollowing:

–MonthlyFactSheets–StockExchangeAnnouncements–QuarterlyInterim–DetailsoftheBoardStatements–AnnualandHalfYearly–SharePriceDataReports

PleasecontacttheInvestmentManager,asbelow, ifyouhaveanyqueriesconcerningtheCompany’sinvestmentsorperformance.

HansaCapitalPartnersLLP50CurzonStreetLondonW1J7UWTelephone02076475750Email:[email protected]

PleasecontacttheRegistrars,asbelow,ifyouhaveaqueryaboutacertificatedholdingintheCompany’sshares.

CapitaRegistrarsNorthernHouseWoodsomeParkFenayBridgeHuddersfieldWestYorkshireHD80LATelephone:08701623131Email:[email protected]

SHARE PRICE LISTINGS

The price of your shares can be found on our websiteandintheFinancialTimesundertheheadingInvestmentCompanies.

In addition, share price information can be found underthefollowing:

ISINNo CodeOrdinaryshares GB0007879728‘A’non-votingOrdinaryshares GB0007879835SedolnoOrdinaryshares 787972‘A’non-votingOrdinaryshares 787983ReutersOrdinaryshares HAN.L‘A’non-votingOrdinaryshares HANA.LBloombergOrdinaryshares HANLN‘A’non-votingOrdinaryshares HANALNSEAQOrdinaryshares HAN‘A’non-votingOrdinaryshares HANA

USEFUL INTERNET ADDRESSES

AssociationofInvestmentCompanies www.theaic.co.uk

LondonStockExchange www.londonstockexchange.com

TrustNet www.trustnet.com

Interactive www.iii.co.uk

FINANCIAL CALENDAR

Companyyearend 31MarchPreliminaryfullyearresultsannounced 17JuneAnnualReportsenttoshareholders 30JuneAnnualGeneralMeetingheld 3AugustFinaldividendpayment NotapplicableAnnouncementofhalfyearlyresults NovemberHalfYearlyReportsenttoshareholders DecemberHalfYearlydividendpayment DecemberInterimManagementStatements January&July

ComPany InformatIon

59

SECRETARY AND REGISTERED OFFICE HansaCapitalPartnersLLP50CurzonStreetLondonW1J7UW

INVESTMENT MANAGERHansaCapitalPartnersLLP50CurzonStreetLondonW1J7UW

AUDITORSGrantThorntonUKLLP30FinsburySquareLondonEC2P2YU

SOLICITORSEvershedsOneWoodStreetLondonEC2V7WS

REGISTRARCapitaRegistrarsNorthernHouseWoodsomeParkFenayBridgeHuddersfieldWestYorkshireHD80LA

CUSTODIANTheBankofNewYorkMellonOneCanadaSquareLondonE145AL

STOCKBROKERWinterfloodInvestmentTrustsTheAtriumBuildingCannonBridge25DowgateHillLondonEC4R2GA

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THIS PAGE IS INTENTIONALLY LEFT BLANK

Hansa Trust PLC50 Curzon Street, London W1J 7UW

Tel: 020 7647 5750 Fax: 020 7647 5770Website: www.hansatrust.com

Email: [email protected]

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