Interim Report

Sherborne Investors (Guernsey) B Limited

Interim Report and Consolidated Financial Statements

For the period from 8 November 2012 to 30 June 2013

COMPANY SUMMARY

The Company

The Company is a Guernsey registered investment company and its shares are admitted to trading on the London Stock Exchange's Specialist Fund Market ("SFM") market. The Company was incorporated on 08 November 2012. The Company commenced dealings on AIM on 29 November 2012 and moved from AIM market to SFM on 7 May 2013.

Investment Policy

The Company's investment objective is to realise capital growth from investment in a target company identified by the Investment Manager with the aim of generating a significant capital return. The Company's investment policy is to invest in a company which is publicly quoted, most likely on a UK stock exchange, which it considers to be undervalued as a result of operational deficiencies and which it believes can be rectified by the Investment Manager's active involvement, thereby increasing the value of the investment. The Company will only invest in one target company at a time.

Investment Manager

The General Partner and the Investment Partnership have appointed Sherborne Investors Management (Guernsey) LLC to provide investment management services to the Investment Partnership.

CHAIRMAN'S STATEMENT

For the period from 8 November 2012 to 30 June 2013

To our Shareholders:

Our initial public offering of shares was completed on 29 November 2012, raising gross proceeds of £207 million. The net proceeds of the offering were placed in short-term bank deposits pending investment in a limited partnership interest in SIGB, LP. Shortly after the offering, the Board approved a turnaround investment in 3i Group plc ("3i") which was proposed by SIGB, LP's investment manager, Sherborne Investors Management (Guernsey) LLC.

On 7 May 2013, the Company transferred its listing from AIM to the Specialist Fund Market of the London Stock Exchange, which the Company deemed to be a more suitable listing venue given the Company's investment strategy.

During the period our Chairman, Mr. Ian Brindle, retired from the Board of the Company, at which time I became Chairman. During the first half of 2013, Mr Christopher Legge also joined the Board of the Company. I thank Ian for his many contributions culminating with the Company's successful offering. Chris brings additional skills to the Board, and Trevor and I look forward to working closely with him.

At 30 June 2013, our balance sheet reflects an investment in 49,450,366 ordinary shares of 3i at a cost of £129.8 million, net of dividends receivable and realized trading gains. This shareholding represented approximately 5% of 3i's outstanding shares and makes the Company the second largest holder of 3i. As at the date of this report, our holding in 3i is substantially unchanged.

At 30 June 2013, the net asset value attributable to shareholders of the Company was £235.7 million or 113.9 pence per share. The Company's net asset value was based on the closing price of 337.6 pence as at 28 June 2013 for the shares of 3i.

On 26 July 2013, 3i paid a dividend of 5.4 pence per share to shareholders on the register at 21 June 2013, of which the Company was one. The Company's Board, in turn, is declaring a dividend of 1.25 pence per share as at the date of this report which will be paid on 6 September 2013 to shareholders on the register at 16 August 2013.

We are grateful for your support of our initial public offering 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 2013

BOARD OF DIRECTORS

Talmai Morgan (Chairman)

Mr. Morgan has been a non-executive director of a number of investment companies since 2005. He is currently chairman of four publicly listed companies and a director of a further six such companies, including Sherborne Investors (Guernsey) A Limited. Previously, from July 2004 to May 2005, he was Chief Executive of Guernsey Finance, which is the official body for the promotion of the Guernsey finance industry. From January 1999 to June 2004, Mr. Morgan was Director of Fiduciary Services and Enforcement at the Guernsey Financial Services Commission where he was responsible for the design and implementation of Guernsey's law relating to the regulation of fiduciaries, administration businesses and company directors. He was also particularly involved in Working Groups of the Financial Action Task Force and the Offshore Group of Banking Supervisors. Prior to 1999, Mr. Morgan held positions at Barings and the Bank of Bermuda.

Trevor Ash (Audit Committee Chairman)

Mr. Ash has been a non-executive director of a number of investment entities since 1999, including Sherborne Investors (Guernsey) A Limited and funds managed by Rothschild, Insight, Cazenove, Merrill Lynch, ING, Thames River Capital and the Dexion Group. He is currently Chairman of J.P. Morgan Private Equity Limited. Prior to 1999, Mr. Ash spent 27 years with the Rothschild Group in various capacities, most recently as Managing Director of Rothschild Asset Management (CI) Limited and as a non-executive director of Rothschild Asset Management Limited in London.

Christopher Legge (Director appointed on 10 May 2013)

Mr. Legge is a Chartered Accountant having started his career at Pannell Kerr Forster (PKF), before moving to Ernst & Young in 1983, where he became a partner in 1986 and managing partner Guernsey in 1998, holding that position until 2003. He is currently Senior Independent Director of BH Macro Limited, non-executive director of Third Point Offshore Investors Limited, non-executive director of Ashmore Global Opportunities Limited and non-executive Director of Multi-Manager Investment Programmes PCC Limited.

On 10 April 2013, the Company announced Mr Brindle's retirement from the Board of the Company upon migration from AIM to the SFM. This took place on 7 May 2013.

DIRECTORS' REPORT

The Directors present their interim report on the affairs of the Company and its subsidiary (together, the "Group"), together with the financial statements and auditor's independent review report, for the period from 8 November 2012 to 30 June 2013.

Principal activities and investing policy

Sherborne Investors (Guernsey) B Limited (the ''Company") is a Guernsey domiciled company incorporated on 8 November 2012 with limited liability. The Company's shares were admitted to trading on AIM on 29 November 2012 and moved from AIM to SFM on 7 May 2013.

The Company is a limited partner in SIGB, LP (the "Investment Partnership"), a limited partnership registered in Guernsey on 6 November 2012, holding a 99.98% capital interest. The Company aims to provide investors with capital growth through its investment in the Investment Partnership to which it has committed £200 million, representing substantially all of the Company's net proceeds from its initial public offering. The Company will effect its investment policy indirectly through the Investment Partnership, which seeks to invest in a company (the ''Selected Target Company'') which is publicly quoted, most likely on a UK stock exchange, which it considers to be undervalued as a result of operational deficiencies and which it believes can be rectified by the Investment Manager's active involvement, thereby increasing the value of the investment (a "Turnaround"). The investment will thus not be passive. The Company's investment may be made on-market or off-market.

The Group intends that the holding in the Selected Target Company shall not reach such a level as to require the Group to make a bid for the entire Selected Target Company and, therefore, the Group will not have control over the Selected Target Company.

The Group's investment policy is to invest in one target company at a time. Therefore, the Group will not seek to reduce risk through diversification. 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, rather than seeking to join the Board of Directors or otherwise to engage with the company. In these circumstances, the Company intends to distribute any realised net profits received from the Investment Partnership to the Shareholders. In such event, an amount equal to the Company's capital contribution for the initial Selected Target Company (less any losses on the sale) may be recalled by the Investment Partnership and invested into a new target (a "New Target Company"). This process may be repeated until a Turnaround has been effected.

The investment in the Selected Target Company may be in shares but can also be in warrants, convertibles, derivatives and any other equity, debt or other securities. The holding period for the investment in the Selected Target Company is neither fixed nor predictable, but the Company expects that a typical holding period would be greater than one year.

During the period ended 30 June 2013, the Board of Directors of the Company approved a Selected Target Company, 3i Group Plc (''3i''). At 30 June 2013, the Investment Partnership held approximately 5% of the Selected Target Company's outstanding shares.

Dividend policy

The Company's dividend policy, subject to the discretion of the Directors who reserve the right to retain amounts for working capital, is to pay dividends to Shareholders following receipt of any distributions from the Investment Partnership. This will be dependent on the frequency with which the Selected Target Company pays dividends to its shareholders (of which the Investment Partnership will be one).

If dividends are received from the Selected Target Company, the Investment Partnership intends to distribute to its limited partners substantially all of the dividend proceeds after allowing for the Investment Partnership's expenses. The Company, in turn, intends promptly to distribute to Shareholders substantially all of the dividend proceeds after allowing for the Company's expenses.

Business review

A review of the Company's business during the period and an indication of likely future developments are contained in the Chairman's Statement.

Capital

Details of the Company's capital are provided in note 10 to the Consolidated Financial Statements. All shares carry equal voting rights.

Substantial interests

As of the date of this report the Company had received notification of the following material shareholdings:

Post balance sheet events

Details of events that have occurred after the date of the Consolidated Statement of Financial Position are provided in note 13 to the Consolidated Interim Financial Statements.

Dividend

The Company has not declared or paid a dividend during the period. However, the Company's Board is declaring a dividend of 1.25 pence per share as at the date of this report which will be paid on 6 September 2013 to shareholders on the register at 16 August 2013.

Independent Auditor

The Board of Directors elected to appoint Deloitte LLP as auditors to the Company at the inaugural meeting of the Company on 9 November 2012. Deloitte LLP have indicated their willingness to continue as auditors.

By order of the Board of Directors

CORPORATE GOVERNANCE

As an unregulated Guernsey incorporated company quoted on the SFM, the Company is not required to comply with the UK Corporate Governance Code or the GFSC Finance Sector Code of Corporate Governance. The Directors however place great importance on ensuring that high standards of corporate governance are maintained. Accordingly, the Directors will take appropriate measures to ensure that the Company operates with due consideration to any codes of corporate governance which the Board deems appropriate and may choose to operate in accordance with the UK Corporate Governance Code and/or the GFSC Finance Sector Code of Corporate Governance, having regard to the Company's size and nature of business. For the purposes of assessing compliance with the UK Corporate Governance Code, the Board considers the Directors are independent of the Investment Manager and free from any business or other relationship that could materially interfere with the exercise of their independent judgment. Certain of the Directors will, however, continue to serve on the board of Sherborne Investors (Guernsey) A Limited.

Board Composition

The Board consists of three non-executive members (details above).

Board Committees

The Board has established an Audit Committee composed of all the independent members of the Board. The chairman of the Audit Committee is reviewed on an annual basis by the Chairman and its membership and its terms of reference will be kept under review. It is intended that the chairmanship of the Audit Committee will be rotated annually among the Directors that are independent of the Investment Manager. The current Chairman of the Audit Committee is Trevor Ash.

The Audit Committee meets at least twice a year and is responsible for ensuring that the financial performance of the Company is properly reported on and monitored, including reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies.

The Audit Committee considers the scope and effectiveness of the Company's external auditor. The Company's auditor, Deloitte LLP may also provide additional non-audit services to the Company, that in the Audit Committee's opinion, will not compromise the independence of Deloitte LLP's audit team.

Board Responsibilities

The Board ensures that the Company's contracts of engagement with the Administrator and other service providers are operating satisfactorily so as to ensure the safe and accurate management and administration of the Company's affairs and business and that they are competitive and reasonable for Shareholders.

Management of the Investment Partnership is the responsibility of Sherborne Investors (Guernsey) GP, LLC, the General Partner, which has delegated investment decisions and day to day management of the Investment Partnership to the Investment Manager under the terms of an investment management agreement. Through its majority interest in the Investment Partnership, the Company and therefore the Board, has the ability to approve proposed investments and to remove the General Partner.

Going concern

After making enquiries and based on the substantial cash reserves as at 30 June 2013, the Directors are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future. The Board is therefore of the opinion that the going concern basis should be adopted in the preparation of the Consolidated Financial Statements.

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 interim financial report for the period from 8 November 2012 to 30 June 2013 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flow and related notes 1 to 15. 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 interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim 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 interim 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 interim financial report for the period ended 30 June 2013 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 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

For the period from 8 November 2012 to 30 June 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

As at 30 June 2013

The Consolidated Financial Statements were approved by the Board of Directors for issue on 6 August 2013.

Signed on behalf of the Board:

Talmai Morgan

Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

For the period from 8 November 2012 to 30 June 2013

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

For the period from 8 November 2012 to 30 June 2013

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the period from 8 November 2012 to 30 June 2013

1. Summary of 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 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 Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The consolidated report including the Interim Report and Consolidated Financial Statements have been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting''.

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

There have been no material changes in accounting policies during the period.

The information for the period ended 30 June 2013 does not constitute statutory accounts as defined in section 244 of The Companies (Guernsey) Law, 2008.

Going concern

The Consolidated Financial Statements have been prepared on the going concern basis. The Group currently holds significant cash balances. After making enquiries, and on the strength of its Consolidated Statement of Financial Position, the Directors are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future. The Board is therefore of the opinion that the going concern basis should be adopted in the preparation of the Consolidated Financial Statements.

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 14, "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 incentive calculation differs depending on how the investment in the Selected Target Company is ultimately characterized. Otherwise there are no significant estimates utilised for the preparation of the Group's Consolidated Financial Statements as at 30 June 2013 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 2013.

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:

IAS 27 Separate Financial Statements (as revised in 2011) 01-Jan-13

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011) 01-Jan-13

IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments) 01-Jan-14

IFRS 7 Financial Instruments: Disclosures - Enhanced Derecognition 01-Jan-13

Disclosure Requirements (Amendments)

IFRS 9 Financial Instruments - classification and measurement 01-Jan-15

IFRS 10 Consolidated financial statements 01-Jan-13

IFRS 11 Joint Arrangements 01-Jan-13

IFRS 12 Disclosure of interests in other entities 01-Jan-13

IFRS 13 Fair value measurement 01-Jan-13

Annual Improvements May 2012 01-Jan-13

The Directors continue to assess the impact of the adoption of these Accounting Standards and Interpretations will have on the operations of the Company in future periods.

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 99.98% 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. Business combinations

On 22 November 2012, the Company subscribed to commit £200 million (two hundred million pounds) to SIGB, LP (the "Investment Partnership"), a Guernsey limited partnership.

The objective of this business combination is for the Investment Partnership to realise capital growth from investment in a selected target company identified by the Investment Manager with the aim of generating a significant capital return for Shareholders.

The interest of non-controlling parties in the acquiree is initially 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 GBP 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.

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. Investments in votings shares 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 7, 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 investment held by the Group at the period end is classified as meeting the definition of 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. 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.

h. 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.

i. 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.

j. 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. 

k. 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.

l. Incentive allocation

The incentive allocation is accounted for on an accruals basis, the calculation is disclosed in Note 14. The allocation was calculated as £1,997,225at 30 June 2013 and is recognised in the Consolidated Statement of Changes in Equity.

2. Comprehensive income

The consolidated comprehensive income has been arrived at after charging:

A fee of £53,000 was paid during the period ended 30 June 2013 to the Auditor for services provided in relation to the Company being listed on AIM. These have been included in share issue costs (see note 10). A further £18,500 was paid in the same period for services provided by the Auditor in relation to the Company's migration from AIM to SFM.

 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 £600) 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 income attributable to the Non-Controlling Interest and on there being 207,000,000 shares in issue.

5. Financial assets at fair value through profit or loss

In December 2012, the Board approved a Turnaround investment in 3i Group plc ("3i") which was proposed by SIGB, LP's Investment Manager, Sherborne Investors Management (Guernsey) LLC. 3i is a leading international investor focused on mid-market private equity, infrastructure and debt management across Europe, Asia and the Americas. Its shares are listed on the London Stock Exchange.

As at 30 June 2013, the Group held 49,450,366 shares of 3i (approximately 5% of the outstanding shares). During the period, the Group sold 6,569,052 ordinary shares of 3i at a realised gain of £958,040 and terminated derivative contracts at a realised gain of £17,798,329 net of commission and other expenses. Pursuant to its existing delegated authority from the General Partner of SIGB, LP it may sell, short or otherwise dispose of all or a part of such shares held in 3i or purchase additional 3i shares at any time.

6. Prepaid Expenses

7. Income Receivable

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. Share capital and share premium

On 29 November 2012 the Company completed its initial public offering and its shares were admitted to trading on AIM. The share issue of 207 million shares at £1 each raised gross cash proceeds of £207,000,000. Costs associated with the issue were £3,166,657, which are deductible against the share premium reserve. This equates to a cost of £0.015per share.

11. Net asset value per share

12. Dividend

The Company did not declare a dividend in the period. However, the Company's Board is declaring a dividend of 1.25 pence per share as at the date of this report which will be paid on 6 September 2013 to shareholders on the register at 16 August 2013.

13. Events after the balance sheet date

Since 30 June 2013, the 3i share price has increased from 337.6 pence to 383.4 pence as at 31 July 2013. If this share price was used to value the 3i shares at 30 June 2013 it would have resulted in an increase in the closing fair value from £166,944,435to £189,592,703.

14. 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 £567,390 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%, increases to 20% of the distributions to all Partners in excess of 150% and increases 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 2013, the incentive allocation has been computed for financial reporting purposes as a Turnaround investment and amounts to £1,997,225. If the incentive allocation had been computed as a Stake Building Investment the incentive allocation would total £6,983,101 and Net Asset Value attributed to Shareholders would have been decreased from £235,699,686 to £230,713,810.

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 2013.

The General Partner, Sherborne Investors (Guernsey) GP, LLC, subscribed for 35 million shares in addition to the 172 million shares issued in the placing. Subsequent to the offering the Sherborne shares were transferred to affiliate entities.

15. 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 has yet to invest some of the funds raised from the listing of the Company, and as a result has a high level of cash and cash equivalents at the date of the Consolidated Statement of Financial Position. 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, 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 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 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. Given the Group's exposure to a single investment there is no way of mitigating this exposure. The Group is reliant on gaining sufficient interests in the Selected Target Company which will allow the Investment Manager to gain an element of control, including board representation. If there were to be a 10% movement in the quoted share price of the Selected Target Company at the date of the Consolidated Statement of Financial Position, this would have a positive or negative effect on the net asset value and total comprehensive income of £16,694,444.

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 2013, the total interest sensitivity gap for interest bearing items was £69,315,459.

As at 30 June 2013, interest rates reported by the Bank of England were 0.5% which would equate to income of £346,577 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 £173,289 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 2013, the Group is not subject to any external capital requirement.

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