Half Yearly Report

SHERBORNE INVESTORS (GUERNSEY) B LIMITED

Interim Report and Unaudited Consolidated Financial Statements

For the period from 1 January 2015 to 30 June 2015

COMPANY SUMMARY

CHAIRMAN'S STATEMENT

Dear Shareholder

I am delighted to present the Interim Report and Unaudited Consolidated Financial Statements of Sherborne Investors (Guernsey) B Limited ("the Company") for the period 1 January 2015 to 30 June 2015.

During the first half of 2015 the Company continued to pursue its investment strategy through its holding in Electra Private Equity plc ("Electra").

On 11 February 2015, Electra released to the market the results of a review which addressed management fee levels, borrowings, and shareholder distributions. Following the review, on 20 February 2015, Electra released to the market a TR-1 notification from Sherborne Investors Management (Guernsey) LLC (the "Investment Manager") which stated that as at 17 February 2015, SIGB, LP held 8,967,089 ordinary shares, or approximately 25.2% of Electra's outstanding shares.

On 25 February 2015, the Investment Manager informed the Company that on 20 February it sent a letter to Electra's Chairman proposing a resumption of discussions about board representation and participation in an expanded review of options to increase Electra's shareholder value. The board of directors of the Company were further informed that the Investment Manager had renewed its proposal, made in July 2014, to appoint Ian Brindle, Edward Bramson and a new independent director to the board of Electra and that Sherborne Investors has advised Electra that, if such discussions are not successful, it intends to requisition a general meeting of shareholders of Electra to propose these appointments.

The Company successfully completed a placing on 26 February 2015 which raised gross proceeds of £100 million for the purposes of repaying outstanding borrowings of SIGB, LP and increasing SIGB, LP's investment in Electra. A related Further Allotment Option, which permitted all shareholders to participate on a pre-emptive basis, raised approximately £0.6 million following the placing.

The Investment Manager has advised the Board that it continues to believe that Electra represents an attractive investment opportunity resulting from the Investment Manager's participation in an operating Turnaround. Accordingly, the Investment Manager has continued increasing the Company's interest in Electra and as at 30 June SIGB, LP held 28.21% of Electra through shares and the equivalent of 1.63% in securities convertible into shares. As at the date of this letter, SIGB, LP holds approximately 29.20% of Electra through shares and 1.74% in securities convertible into shares. The Investment Manager is permitted to convert convertible securities into shares at its discretion. However, in accordance with the Company's investment policy, the Investment Manager does not intend to effect a conversion in sufficient number such that it would be required to make a mandatory bid for the entire share capital of Electra. Pursuant to its existing authority, the Investment Manager may sell, short or otherwise dispose of all or a part of such shares held in Electra or purchase additional securities at any time.

The Group intends to continue to pursue its strategy as set out in its prospectus.

At 30 June 2015, the net asset value attributable to shareholders of the Company was £328.6 million or 104.47 pence per share (see note 12). The Company's net asset value was based on the closing price of 3,175 pence as at 30 June 2015 for the shares of Electra.

We are grateful for your continued support and will keep you informed of the status of our investments as they develop.

Yours sincerely,

Talmai Morgan

Chairman

Sherborne Investors (Guernsey) B Limited

6 August 2015

STATEMENT OF DIRECTORS' RESPONSIBILITIES

To the best of their knowledge, the Directors of Sherborne Investors (Guernsey) B Limited confirm that:

1. The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 "Interim Financial Reporting"; as adopted by the European Union: and

2. The Interim Financial Report comprising of the Chairman's Statement meets the requirements of an interim management report and includes a fair review of the information required by DTR 4.2.4R:

DTR 4.2.7R of the UK Disclosure and Transparency Rules, being an indication of important events during the first six months and their impact on the Unaudited Condensed Consolidated Financial Statements, and a description of principal risks and uncertainties for the remaining six months of the year, and

b. DTR 4.2.8R of the UK Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months and that have materially affected the financial position or performance of the Company during that period, and any material changes in the related party transaction disclosed in the last Annual Report and Consolidated Financial Statements.

Going Concern

Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern.

The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the on-going cash flows and the level of cash balances as of the reporting date as well as taking forecasts of future cash flows into consideration.

After making enquiries of the Investment Manager and the Administrator, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing these unaudited consolidated financial statements.

Risk

There have been no changes to the principal risks and uncertainties relating to the Company since the period ended 31 December 2014. The Directors will continue to assess the principal risks and uncertainties over the remaining five months of the year but expect them to remain unchanged.

By order of the Board

For Sherborne Investors (Guernsey) B Limited

Talmai Morgan

Chairman

6 August 2015

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF

SHERBORNE INVESTORS (GUERNSEY) B LIMITED

We have been engaged by Sherborne Investors (Guernsey) B Limited ("the Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flow and related notes 1 to 16. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the period ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants

Guernsey, Channel Islands

6 August 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

For the period from 1 January 2015 to 30 June 2015

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

As at 30 June 2015

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

Although not required by IAS 34 - 'Interim Financial Reporting', the comparative figures for the preceding year and the related notes have been included on a voluntary basis.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. General Information and significant accounting policies

Reporting entity

Sherborne Investors (Guernsey) B Limited (the ''Company") is a closed-ended investment company with limited liability formed under The Companies (Guernsey) Law, 2008. The Company was incorporated and registered in Guernsey on 8 November 2012. The Company commenced dealings on the London Stock Exchange's AIM market on 29 November 2012 and moved from AIM to the Specialist Fund Market ("SFM") on 7 May 2013. The Company's registered office is 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey GY1 2HL. The "Group" is defined as the Company and its subsidiary, SIGB, LP.

Basis of preparation

The Unaudited Condensed Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and in accordance with International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), together with applicable legal and regulatory requirements of Guernsey law. The directors of the Company have taken the exemption in Section 244 of The Companies (Guernsey) Law, 2008 (as amended) and have therefore elected to only prepare Consolidated Financial Statements for the period.

These Consolidated Financial Statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments and derivatives.

Going concern

Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern.

The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the on-going cash flows and the level of cash balances as of the reporting date as well as taking forecasts of future cash flows into consideration.

After making enquiries of the Investment Manager and the Administrator, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing these unaudited consolidated financial statements.

The Directors will continue to assess the principal risks and uncertainties relating to the Company for the remaining six months of the year but expect these to remain unchanged.

Critical accounting judgments and key sources of estimation uncertainty

The preparation of the Group's Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies at the date of the Group's Consolidated Financial Statements and revenue and expenses during the reported period. Actual results could differ from those estimated.

As more fully described in Note 15, "Related Party Transactions", the Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to Partners of the Investment Partnership exceed a certain level. The basis of the incentive calculation differs depending on how the investment in the Selected Target Company is ultimately characterized (i.e as a Turnaround or Stake Building Investment). Otherwise there are no significant estimates utilised for the preparation of the Group's Consolidated Financial Statements as at 30 June 2015 due to the nature of the activities that have occurred in this period, together with the sole investment held by the Group being quoted on the London Stock Exchange. Fair value of financial assets held through profit or loss is therefore based on the quoted closing bid price at 30 June 2015.

1. Summary of significant accounting policies

Adoption of new and revised standards

(i) Amendments early adopted by the Company:

There were no standards, amendments and interpretations adopted early by the Company.

(ii) Standards, amendments and interpretations that are in issue but not yet effective:

Unless stated otherwise, the Directors do not consider the adoption of new and revised Accounting Standards and Interpretations to have a material impact.

a. Basis of consolidation

The Consolidated Financial Statements incorporate the financial statements of the Company and an entity controlled by the Company (its subsidiary). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

Non-controlling interests in the net assets of the consolidated subsidiary are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling entities' share of changes in equity since the date of the combination. Losses applicable to the non-controlling entities in excess of their interest in the subsidiary's equity are allocated against their interests to the extent that this would create a negative balance.

Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used into line with those used by the Group.

All intra-group transactions, balances and expenses are eliminated on consolidation.

The Company owns approximately 95.54% of the capital interest in SIGB, LP. Whilst the general partner of SIGB, LP, Sherborne Investors (Guernsey) GP, LLC, a company registered in Delaware, USA, is responsible for directing the day to day operations of SIGB, LP, the Company, through its majority interest in SIGB, LP, has the ability to approve the proposed investment of SIGB, LP and to remove the general partner. Hence, the Company has consolidated SIGB, LP in its financial statements.

b. Non-controlling interest

The interest of non-controlling parties in the subsidiary is measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

c. Functional currency

Items included in the Consolidated Financial Statements of the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The Consolidated Financial Statements are presented in GBP(£), which is the Group's functional and presentational currency. Transactions in currencies other than £ are translated at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the Consolidated Statement of Financial position are retranslated into sterling at the rate of exchange ruling at that date. Exchange differences are reported in the Consolidated Statement of Comprehensive Income.

d. Financial assets at fair value through profit or loss

Investments, including equity and loan investments in associates, are designated as fair value through profit or loss in accordance with International Accounting Standard 39 ("IAS 39") ''Financial Instruments: Recognition and Measurement'', as the Company is an investment company whose business is investing in financial assets with a view to profiting from their total return in the form of interest and changes in fair value. Despite the large holding, under International Accounting Standard 28 ("IAS 28") "Investments in Associates", the fund can hold the investment in Electra shares at fair value through profit or loss rather than as an associate as SIGB, LP is a close-ended fund. The convertible bonds, due to being a hybrid contract, have been presented wholly at fair value through profit or loss.

Investments in voting shares, convertible bonds and derivative contracts are initially recognised at cost. The investments in voting shares and derivative contracts are subsequently re-measured at fair value, as determined by the Directors. Unrealised gains or losses arising from the revaluation of investments in voting shares and derivative contracts are taken directly to the Consolidated Statement of Comprehensive Income.

Fair Value is determined as follows:

Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level I - An unadjusted quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. As required by IFRS 13, the Group will not adjust the quoted price for these investments, even in situations where it holds a large position and a sale could reasonably impact the quoted price.

Level II - Inputs are other than unadjusted quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

Level III - Inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.

The investments held by the Group at the period end are classified as meeting the definition of Level I (2014: Level I).

e. Revenue recognition

Dividend income is recognised when the Group's right to receive payment has been established. Tax suffered on dividend income for which no relief is available is treated as an expense.

Interest receivable from short-term deposits and investment income are recognised on an accruals basis. Where receipt of investment income is not likely until the maturity or realisation of an investment then the investment income is accounted for as an increase in the fair value of the investment.

f. Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the Consolidated Statement of Comprehensive Income.

g. Finance costs

Finance costs include interest on bank loan and amortised transaction costs. Finance cost is recognised using the effective interest method.

h. Prepaid expenses and trade receivables

Trade and other receivables are initially recognised at fair value. A provision for impairment of trade receivables is established when there is objective evidence the Group will not be able to collect all amounts due according to the original terms of the receivables.

i. Cash and cash equivalents

Cash and cash equivalents comprises cash in hand, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the Consolidated Statement of Cash Flows.

j. Trade and other payables

Trade and other payables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method.

k. Financial instruments

Financial instruments and financial liabilities are recognised in the Group's Consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

l. Segmental reporting

As the Group invests in one investee company, there is no segregation between industry, currency or geographical location. No further disclosures have been made in conjunction with IFRS 8 Operating Segments as it is deemed not to be applicable.

m. Incentive allocation

The incentive allocation is accounted for on an accruals basis and the calculation is disclosed in Note 15. It was calculated as £3,077,449 of which £89,500 relates to the affillitate of the General Partner (£890,032 at 30 June 2014). The incentive is payable to Non-Controlling Interest and therefore recognised in the Consolidated Statement of Changes in Equity rather than recognised as an expense in the Consolidated Statement of Comprehensive Income.

2. Comprehensive income

The consolidated comprehensive income has been arrived at after charging:

In addition to the audit related remuneration above, £45,000 non-audit related fees were paid to the Auditor in the current period in relation to the placing.

3. Tax on ordinary activities

The Company has been granted exemption from income tax in Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable to pay an annual fee (currently £1,200) under the provisions of the Ordinance. As such it will not be liable to income tax in Guernsey other than on Guernsey source income (excluding deposit interest on funds deposited with a Guernsey bank). No withholding tax is applicable to distributions to Shareholders by the Company.

The Investment Partnership will not itself be subject to taxation in Guernsey. No withholding tax is applicable to distributions to partners of the Investment Partnership.

Income which is wholly derived from the business operations conducted on behalf of the Investment Partnership with, and investments made in, persons or companies who are not resident in Guernsey will not be regarded as Guernsey source income. Such income will not therefore be liable to Guernsey tax in the hands of non-Guernsey resident limited partners.

Dividend income is shown gross of any withholding tax.

4. Gain per share

The calculation of basic and diluted gain per share is based on the return on ordinary activities less total comprehensive income attributable to the Non-Controlling Interest and on there being 281,018,650 shares in issue.

5. Financial assets at fair value through profit or loss

The Board of Directors approved an investment in Electra Private Equity plc ("Electra") which was proposed by SIGB, LP's Investment Manager, Sherborne Investors Management (Guernsey) LLC in December 2013. Electra is a London Stock Exchange listed investment trust focused on private equity investments.

In 2014, a residual gain of £18,392,793 was realised during the year relating to the sale of the investment in 3i. There was also gains from derivative activity in relation to holdings in Electra which were £2,611,257 net of expenses bringing the total realised gain on investments and derivative contracts to £21,004,048.

As at 30 June 2015, the Company held 10,112,320 shares of Electra and 12,059 units of 5% Subordinated Convertible Bonds, convertible into 595,506 shares of Electra at a conversion price of £20.25 per share. While the bonds may be converted at the Investment Manager's discretion, in accordance with the Company's investment policy, the Investment Manager does not intend to effect a conversion in sufficient number such that it would be required to make a mandatory bid for the entire share capital of Electra. No interest was paid to the sellers when the bonds were purchased and therefore no purchased interest has been deducted.

The convertible bond is listed on the London Stock Exchange. The Company received interest of £301,475 on the bonds on 29 June 2015.

The conversion rights may be exercised in two ways. The first is at the option of the bondholder at any point up until 7 days prior to maturity of the bonds on 29 December 2017. The second is at the option of Electra, which can occur either at any time redemptions of 85% or more in the principal amount of the bonds originally issued have occurred, or if the Parity Value at any time on or after 29 December 2015 exceeds 130% or more in the principal amount of the bonds on 20 of the last 30 consecutive dealing days. Parity Value is defined in the convertible bond prospectus as the number of ordinary shares on conversion multiplied by the volume-weighted average price per ordinary share.

6. Prepaid Expenses

7. Dividend receivable

On 21 May 2015 Electra declared a dividend of 38 pence per share which was paid on 24 July 2015 to shareholders of record at 5 June 2015.

8. Cash and cash equivalents

Cash and cash equivalents comprises cash held by the Group and short term deposits held with various banking institutions. The carrying amount of these assets approximates their fair value.

9. Trade and other payables

10. Bank Loan - Current

On 8 July 2014, SIGB, LP entered into a £50 million, unsecured term loan facility with HSBC Bank Plc. Borrowings under the facility may be used to purchase shares, debt or derivative securities of Electra. As at 31 December 2014, £40 million of this facility had been drawn. The amount of interest paid during 2014 was £103,069.

On 5 March 2015, the borrowings were repaid in their entirety. On 19 March 2015, £20 million of a new £50 million, unsecured term loan facility with HSBC Bank Plc was drawn with £10 million being repaid on 1 May 2015. The finance costs amounted to approximately £1.62 million (2014: £188,154), consisting of £989,136 amortisation of transaction costs, £582,233 loan interest and £48,696 breakage fees to 30 June 2015.

At the date of this report £10 million of this facility is payable, with the interest, by 21 September 2015. The rate of interest per annum on the loan is LIBOR rates plus 4%. The weighted average effective interest rate for the year was 4.68% per annum.

The new Facility Agreement has the following main covenants which are the same as the old terminated agreement:

i. Any dividend received from Electra shall be applied in prepayment of the Loan and accrued interest up to the amount of the dividend.

ii. Any disposal proceeds from the sale of Electra shares, debt instruments or relevant derivatives shall be applied in the prepayment of the Loan and accrued interest up to the amount of the disposal proceeds.

iii. Any partnership capital injections in SIGB, LP shall be applied in the prepayment of the Loan and accrued interest up to the amount of the capital injections.

iv. SIGB, LP is also required to maintain a Loan to Value (LTV) ratio below 50%. An LTV ratio of 50% or higher would entitle the bank to require full or partial prepayment to restore the required LTV ratio. The LTV ratio is the percentage of the Loan, any accrued interest and fees to the value of SIGB, LP's investment in Electra.

11. Share capital and share premium

On 25 February 2015, it was approved by the board to issue up to 111,091,871 new shares at the Issue Price of 93.5 pence per share.

On 24 March 2015, a further allotment of 595,388 new shares were issued at a price of 93.5 pence per share.

12. Net asset value per share attributable to the Company

13. Dividends

On 21 May 2015 Electra declared a dividend of 38 pence per share payable on 24 July 2015 to shareholders of record on 5 June 2015 (2014: £nil).

14. Events after the balance sheet date

Since 30 June 2015 the share price of Electra has increased from 3,175 pence to 3,285 pence as at 31 July 2015. If this share price was used to value the Electra shares at 30 June 2015, it would have resulted in an increase in the closing fair value from £339,998,790 to £351,778,276.

SIGB, LP received approximately £3.8 million on 24 July 2015 from Electra's dividend declared on 21 May 2015. HSBC Bank waived the requirement of using the dividend payment to reduce the outstanding borrowings at the period end.

15. Related party transactions

The Investment Partnership and its General Partner, Sherborne Investors (Guernsey) GP, LLC, have engaged Sherborne Investors Management (Guernsey) LLC to serve as Investment Manager who is responsible for identifying the Selected Target Company, subject to approval by the Board of Directors of the Company, as well as day to day management activities of the Investment Partnership. The Investment Manager is entitled to receive from the Investment Partnership a monthly management fee equal to one-twelfth of 1% of the net asset value of the Investment Partnership, less cash and cash equivalents and certain other adjustments. At the period end, management fees of £1,450,577 had been paid by the Partnership. No balance was outstanding at the period end.

The sole member of Sherborne Investors (Guernsey) GP, LLC is Sherborne Investors LP (the non-controlling interest), which also serves as the Special Limited Partner of the Investment Partnership. The Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to Partners of the Investment Partnership, of which one is the Company, exceed a certain level of capital contributions to the Investment Partnership, excluding amounts contributed attributable to management fees.

For Turnaround investments, the incentive allocation is computed at 10% of the distributions to all Partners in excess of 110%, increasing to 20% of the distributions to all Partners in excess of 150% and increasing to 25% of the distributions to all Partners in excess of 200% of capital contributions, excluding amounts contributed attributable to management fees.

If after acquiring a shareholding, the share price of the Selected Target Company rises to a level at which further investment and the effort of a Turnaround is, in the Investment Manager's opinion, no longer justified or otherwise no longer presents a viable Turnaround opportunity, the Investment Partnership intends to sell (and distribute the proceeds to the Company) or distribute in kind the holding to the limited partners (in each case after deductions for any costs and expenses and for the Investment Partnership's Minimum Capital Requirements and subject to applicable law and regulation), rather than seeking to join the Board of Directors or otherwise engage with Selected Target company ( a "Stake Building Investment").

For Stake Building Investments, the incentive allocation is computed at 20% of net returns on the investment of the Investment Partnership, such amount to be payable after each partner in the Investment Partnership has had distributed to it an amount equal to its aggregate capital contribution to the Investment Partnership in respect to the Stake Building Investment (excluding any capital contributions attributable to Management Fees). The Special Limited Partner may waive or defer all or any part of any incentive allocation otherwise due.

At 30 June 2015, the incentive allocation has been computed based on a Stake Building Investment and amounts to £3,077,449 less £89,500 which relates to the affiliate of the General Partner (2014: £890,032). If the incentive allocation had been computed on a Turnaround investment basis, the amount would have been £1,618,908 (2014: £1,235,678) resulting in a NAV which would have been increased by £7,657,978 or 2.43 pence per share.

Each of the directors (other than the Chairman) receives a fee payable by the Company currently at a rate of £30,000 per annum. The Chairman of the Audit Committee receives £5,000 per annum in addition to such fee. The Chairman receives a fee payable by the Company currently at the rate of £45,000 per annum.

Individually and collectively, the Directors of the Company hold no shares of the Company as at 30 June 2015.

Sherborne Investors GP, LLC has granted to the Company a non-exclusive licence to use the name "Sherborne Investors" in the UK and the Channel Islands in the corporate name of the Company and in connection with the conduct of the Company's business affairs. The Company may not sub-licence or assign its rights under the Trademark Licence Agreement. Sherborne Investors GP, LLC receives a fee of £20,000 per annum for the use of the licensed name.

On 20 May 2015, an affiliate of the General Partner to the Investment Partnership subscribed for £15 million of SIGB, LP thereby acquiring a 4.43% interest. The interest was acquired at the net asset value of SIGB, LP on 20 May 2015. Management and incentive fees have been accrued based on the capital interest of the new limited partner since the date of its admission.

16. Financial risk factors

The Group's investment objective is to realise capital growth from investment in the Selected Target Company, identified by the Investment Manager with the aim of generating significant capital return for Shareholders. Consistent with that objective, the Group's financial instruments mainly comprise of an investment in a Selected Target Company. In addition, the Group holds cash and cash equivalents as well as having trade and other receivables and trade and other payables that arise directly from its operations.

Liquidity risk

The Group's cash and cash equivalents are placed in demand deposits and short-term money market instruments with a range of financial institutions.The following table details the liquidity analysis for financial liabilities at the date of the Consolidated Statement of Financial Position:

Credit risk

The Company is exposed to credit risk in respect of its cash and cash equivalents and derivative contracts, arising from possible default of the relevant counterparty, with a maximum exposure equal to the carrying value of those assets. The credit risk on liquid funds is mitigated through the Group depositing cash and cash equivalents across several banks. The credit risk associated with derivative contracts is monitored by reviewing the credit rating for counterparty.

The Group is exposed to credit risk in respect of its trade receivables and other receivable balances with a maximum exposure equal to the carrying value of those assets

Market price risk

Market price risk arises as a result of the Group's exposure to the future values of the share price of the Selected Target Company. It represents the potential loss that the Group may suffer through investing in the Selected Target Company.

As at 30 June 2015 a +/-20% change in the price of Electra Ordinary Shares would positively or negatively affect the Group's net assets, income and consolidated comprehensive income for the period, by £70,660,490.

Interest rate risk

The Group is subject to risks associated with changes in interest rates in respect of interest earned on its cash and cash equivalents. The Group seeks to mitigate this risk by monitoring the placement of cash balances on an ongoing basis in order to maximize the interest rates obtained. This risk is also mitigated through the Group depositing cash and cash equivalents across several banks.

As at 30 June 2015, the total interest sensitivity gap for interest bearing items was £20,674,110 (2014: £21,012,894).

As at 30 June 2015, interest rates reported by the Bank of England were 0.5% which would equate to income of £103,371 (2014: £105,064) per annum if interest bearing assets remained constant. If interest rates were to fluctuate by 0.25%, this would have a positive or negative effect of £51,686 (2014: £52,532) on the Group's annual income.

Capital risk management

The capital structure of the Company consists of proceeds raised from the issue of Ordinary Shares. As at 30 June 2015, the Group is not subject to any external capital requirement.

The Board of Directors believe that at the date of the Condensed Consolidated Statement of Financial Position there were no material risks associated with the management of the Company's capital.