Annual Report 2006 - Tamar European Industrial Fund

Report of the Directors Report of the Directors
The Management Engagement Committee, chaired
by Mr Weaver, comprises the full Board, except for Mr
Kennedy, and reviews the performance of the Investment
Manager and the continuing ability of Directors to act
independently of any substantial shareholder, and their
associates. The Management Engagement Committee
will hold its first meeting during 2007.
The table below sets out the number of Board and
Committee meetings held during the period from the
Company’s launch to 31 December 2006 and the number
of meetings attended by each Director.
Board of Directors Meetings held / attended
CGH Weaver 3 / 3
JJ Gamble 3 / 3
HF Green 3 / 3
JAB Kennedy 3 / 3
CP Spencer 3 / 3
Individual Directors may, at the expense of the Company,
seek independent professional advice on any matter
that concerns them in the furtherance of their duties. The
Company maintains appropriate Directors’ and Officers’
liability insurance. After making enquiries, and bearing in
mind the nature of the Company’s business and assets,
the Directors consider that the Company has adequate
resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt
the going concern basis in preparing the accounts.
Principal Risks and Uncertainties
The Company invests in real estate in Europe and
Scandinavia. It is therefore exposed to variations in
market conditions for such assets and to responses
to market conditions, to local and national economic
conditions, changes to the currency and interest rate
profiles, tax rates and other future events. In addition
the Company will also face risks from breach of laws or
regulations, poor selection of assets, failure of systems or
procedures in any of the countries in which the Company
operates, actions leading to central management and
control of the assets being regarded as taxable in the UK.
The Investment Manager through its active management
and review processes will seek to minimise these risks
wherever possible, and the Board through its review of
the Manager’s work will seek to identify any additional
exposures.
The Board uses a number of key performance indicators
to assist in measuring the performance of the Company.
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These are:
• the running yield on the portfolio;
• the cost of the Company’s debt;
• the performance of the share price and its relativity to
NAV per share excluding deferred tax; and
• the dividend yield.
Internal Controls
The Board is responsible for the Company’s system
of internal control and for reviewing its effectiveness,
consistent with the guidance by the Turnbull Committee.
The process is based principally on the Investment
Manager’s approach to internal control.
The Board will review at its regular series of meetings a
report from the Investment Manager on the procedures it
has undertaken to ensure compliance with the investment
guidelines of the Company and the management of the
portfolio of assets within the Company. At each Board
meeting the Board monitors the investment performance
of the Company in comparison to its stated objective. The
Board also reviews the Company’s activities since the last
Board meeting to ensure that the Investment Manager
adheres to the agreed investment policy and approved
investment guidelines and, if necessary, approves
changes to such policy and guidelines. In addition, at
each Board meeting, the Board receives reports from
the Secretary in respect of compliance matters and
duties performed on behalf of the Company. By their
nature these procedures can provide reasonable, but not
absolute, assurance against material misstatement or
loss.
The Board has reviewed the need for an internal audit
function. The Board has decided that the systems and
procedures employed by the Investment Manager and
the Secretary and the work carried out by the Company’s
external auditors, provide sufficient assurance that a
sound system of internal control, which safeguards
the Company’s assets, is maintained. An internal audit
function specific to the Company is therefore considered
unnecessary.
Relations with Shareholders
The Company welcomes the views of shareholders
and places great importance on communication with
its shareholders. The Board receives regular reports on
the views of shareholders and the Chairman and other
Directors are available to meet shareholders if required.
Any requests for meetings should be made to the
Administrator.
Directors’ Authority to Buy Back Shares
The Company did not purchase any shares for
cancellation during the period.
The Directors will seek renewal of the current authority
of the Company to make market purchases of up to
14.99 per cent of the issued Ordinary Share Capital
and Special Resolution 1, as set out in the notice of the
Annual General Meeting, seeks renewal of such authority
until the earlier of the Annual General Meeting in 2008
and 15 August 2008. Any buy back of Ordinary Shares
will be made subject to Guernsey law and within any
guidelines established from time to time by the Board
(which will take into account the income and cash flow
requirements of the Company). The making and timing
of any buy backs will be at the absolute discretion of
the Board. Purchases of Ordinary Shares will only be
made through the market for cash at prices below the
prevailing net asset value of the Ordinary Shares (as last
calculated) where the Directors believe such purchases
will enhance shareholder value. The purchases will only
be made in accordance with the rules of the UK Listing
Authority which provide that the price to be paid must
not be more than the higher of (i) five per cent above the
average market value of the Shares for the five business
days prior to the day the purchase is made and (ii) the
“Buy-back” Regulation price, being the higher of the last
independent trade and the highest current independent
bid.
It is intended that buy backs will only be made if to do
so will represent an attractive investment opportunity for
ongoing shareholders not participating in any such buy
backs. Accordingly, purchases of Shares will only be
made through the market for cash at prices below the
prevailing Net Asset Value per Share of the remaining
Shares.
Auditors
KPMG Channel Islands Limited have expressed
their willingness to continue in office as auditors and
a resolution proposing their re-appointment will be
submitted at the Annual General Meeting.
Approved by the Board on 27 February 2007.
Jonathan Gamble Helen Green
Director Director
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