Half-year Report

HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2016

A copy of the Company's Half Yearly Financial Report for the six months ended 30^th June 2016 will shortly be available to view and download from www.rightsandissues.co.uk.  Neither the contents of this website nor the contents of any website accessible from hyperlinks on this website (or any other website) is incorporated into or forms part of this announcement.

Printed copies of the Report will be sent to shareholders shortly. Additional copies may be obtained from the Corporate Secretary – Maitland Administration services Limited, Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW.

INTERIM DIVIDEND

An interim dividend of 10.0p per share has been approved by the Board and is payable on 30th September 2016 to shareholders on the register as at 2nd September 2016 (ex-dividend 1st September 2016).

The following text is copied from the Half Yearly Financial Report.

CHAIRMAN’S STATEMENT

The decision of the United Kingdom to leave the European Union on 23rd June 2016 will have fundamental economic consequences which as yet are difficult to predict. In the short term, there has been a period of extreme market volatility.

This is not apparent in the performance of the FTSE All-Share Index which shows a rise of 2.1% for the first six months. However, since the vote to leave there has been a significant divergence in performance with the leading company prices rising while the rest of the UK market has fallen.

The net asset value has risen by 2.4% to 1582.3p at the end of the period.

The capital restructuring was successfully completed in June and the interim dividend is 10p per share in accordance with the previous indication.

The economy is now faced with a period of uncertainty and market volatility is likely to continue.

Dr D. M. BRAMWELL

Chairman

21st July 2016

Risks and uncertainties

Cautionary statement

This Half Yearly Report contains forward-looking statements that involve risk and uncertainty. These have been made by the Directors in good faith based on the information available to them at the time of their approval of this Report. Due to the inherent uncertainties, including stock market risk factor, actual results may differ materially from those expressed or implied by these forward-looking statements.

There are a number of potential risks and uncertainties which could have a material impact on the Company’s performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Company’s results continue to be exposed to market price risk. Further information on the principal long-term risks and uncertainties of the Company is included in the latest Annual Report.

INCOME STATEMENT
for the six months ended 30th June 2016

			Six months ended 30th June 2016			Six months ended 30th June 2015			Year ended 31st December 2015
	Notes	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	2	1,561	–	1,561	1,679	–	1,679	3,271	–	3,271
Other operating income	2	3	–	3	1	–	1	6	–	6
Total income		1,564	–	1,564	1,680	–	1,680	3,277	–	3,277
Gains on fair value through profit or loss assets		–	452	452	–	23,470	23,470	–	25,875	25,875
(Losses)/gains on subsidiary holding		–	(45)	(45)	–	–	–	–	212	212
		1,564	407	1,971	1,680	23,470	25,150	3,277	26,087	29,364
Expenses
Investment management fee		–	–	–	–	–	–	–	–	–
Other expenses		296	–	296	359	–	359	682	–	682
		296	–	296	359	–	359	682	–	682
Profit before tax		1,268	407	1,675	1,321	23,470	24,791	2,595	26,087	28,682
Tax–			–	–	–	–	–	29	–	29
Profit for the period		1,268	407	1,675	1,321	23,470	24,791	2,624	26,087	28,711
Earnings per share
Return per Income
Share		14.1p	4.5p	18.6p	24.2p	238.5p	262.7p	47.3p	265.1p	312.4p
Return per Capital
Share		n/a	n/a	n/a	44.2p	1073.3p	1117.5p	89.0p	1193.0p	1282.0p

The total column of this statement represents the Income Statement, prepared in accordance with International Financial Reporting Standards. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement are those of the single entity and derive from continuing operations.

An interim dividend of 10.0p (2015: 10.5p) per share and amounting to £902,000 (2015: £258,300) is payable on 30th September 2016 to shareholders on the register as at 2nd September 2016 (ex-dividend 1st September 2016).

The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 – 436 of the Companies Act 2006. The information for the six months to 30th June 2016 and 30th June 2015 has not been audited.

The information for the year ended 31st December 2015 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2) or (4) of the Companies Act 2006.

The auditors have reviewed the financial information for the six months ended 30th June 2016 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information and their report is on page 12.

BALANCE SHEET
as at 30th June 2016

Non-current assets	30th June 2016 £'000	30th June 2015 £'000	31st December 2015 £'000
Investments at fair value through profit or loss	125,347	130,795	123,256
	125,347	130,795	123,256
Current assets
Other receivables	742	735	412
Current tax receivable	29	39	29
Amounts due from Group undertakings	140	831	140
Cash and cash equivalents	16,509	8,076	18,909
	17,420	9,681	19,490
Total assets	142,767	140,476	142,746
Current liabilities
Other payables	41	752	77
	41	752	77
Total assets less current liabilities	142,726	139,724	142,669
Net assets	142,726	139,724	142,669
Equity
Called up share capital	2,255	1,025	1,025
Share premium	–	225	225
Retained reserves:
Capital reserve	62,665	55,901	63,709
Revaluation reserve	75,290	80,074	74,883
Revenue reserve*	2,516	2,499	2,827
Total equity	142,726	139,724	142,669
* Previously called the Dividend equalisation reserve.
Net asset value per share
Income shares	1,582.3p	1,505.6p	1,544.8p
Capital shares	n/a	6,261.4p	6,382.2p

STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June 2016

	Share capital £'000	Share premium Account £'000	Capital Reserve £'000	Revaluation Reserve £'000	Dividend Equalization Reserve £'000	Total £'000
For the six months ended June 2015
Balance at 31st December 2014	1,025	225	51,973	60,532	2,539	116,294
Profit for the period	–	–	3,928	19,542	1,321	24,791
Total recognised income and expense	1,025	225	55,901	80,074	3,860	141,085
Dividends (Note 3)	–	–	–	–	(1,361)	(1,361)
Balance at 30th June 2015	1,025	225	55,901	80,074	2,499	139,724
For the year ended December 2015
Balance at 31st December 2014	1,025	225	51,973	60,532	2,539	116,294
Profit for the period	–	–	11,736	14,351	2,624	28,711
Total recognised income and expense	1,025	225	63,709	74,883	5,163	145,005
Dividends (Note 3)	–	–	–	–	(2,336)	(2,336)
Balance at 31 December 2015	1,025	225	63,709	74,883	2,827	142,669
For the six months ended June 2016
Balance at 31st December 2015	1,025	225	63,709	74,883	2,827	142,669
Profit for the period	–	–	–	407	1,268	1,675
Total recognised income and expense	1,025	225	63,709	75,290	4,095	144,344
Bonus issue of income shares	1,230	(225)	(1,005)	–	–	–
Cost of bonus issue	–	–	(39)	–	–	(39)
Dividends (Note 3)	–	–	–	–	(1,579)	(1,579)
Balance at 30th June 2016	2,255	–	62,665	75,290	2,516	142,726

* Previously called the Dividend equalisation reserve.

CASH FLOW STATEMENTS
for the six months ended 30th June 2016

Cashflows from operating activities	30 June 2016 £'000	30 June 2015 £'000	31 December 2015 £'000
Profit before tax	1,675	24,791	28,682
Adjustments for:
Gains on investments	(452)	(23,470)	(25,875)
Losses/(gains) on revaluation of subsidiary	45	–	(212)
Purchases of investments	(1,684)	(1,733)	(1,733)
Proceeds on disposal of investments	–	6,147	16,283
Operating cash flows before movements in working capital	(416)	5,735	17,145
(Increase)/decrease in receivables	(330)	(428)	586
(Decrease)/increase in payables	(36)	11	40
Net cash from operating activities before income taxes	(782)	5,318	17,771
Income taxes received	–	–	39
Net cash (used in) from operating activities	(782)	5,318	17,810
Cashflows from financing activities
Expenses from capital restructure	(39)	–	–
Disposal of subsidiary	–	–	20
Dividends paid	(1,579)	(657)	(2,336)
Net cash used in financing activities	(1,618)	(657)	(2,316)
Net (decrease)/increase in cash and cash equivalents	(2,400)	4,661	15,494
Cash and cash equivalents at beginning of year	18,909	3,415	3,415
Cash and cash equivalents at end of period	16,509	8,076	18,909

NOTES TO THE HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2016

1. Accounting Standards

The condensed interim financial report has been prepared in accordance with International Financial Reporting Standards (IFRSs), including IAS 34 “Interim financial reporting” as adopted by the European Union. The same accounting policies and methods of computation are followed in the interim financial report as those used in the Company’s latest published annual financial statements.

2. Income

	30 June	30 June	31 December
	2016	2015	2015
	£'000	£'000	£'000
Total income comprises:
Dividends	1,561	1,679	3,271
Interest	3	1	2
Other income	–	–	4
Total income	1,564	1,680	3,277

3. Dividends

Amounts recognised as distributions to equity holders in the year: Income (Paid) Interim dividend for the year ended 31 December 2015	30 June 2016 £'000	30 June 2015 £'000	31 December 2015 £'000
of 10.5p per share	–	–	258
Final dividend for the year ended 31 December 2015 of 25.5p per share (year ended 31 December 2014: 25.5p)	627	627	627
Special dividend for the year ended 31 December 2016 of 22.5p per share (year ended 31 December 2015: nil p)	553	–	–
Capital (Paid)
Supp cap dividend for the year ended 31 December 2015 of 86.6585p per share	–	704	1,421
Final dividend for the year ended 31 December 2015 of 1.8p per share (year ended 31 December 2014: 1.8p)	30	30	30
Special dividend for the year ended 31 December 2016 of 22.5p per share (year ended 31 December 2015: nil p)	369	–	–
	1,579	1,361	2,336

	30 June 2016 £'000
Income Proposed interim dividend of 10.0p per share	902
	902

This proposed interim dividend was approved by the Board on 21st July 2016 and has not been included as a liability at 30th June 2016.

4.      Valuation of financial instruments

IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note 1 Investments, as set out in the Company’s Annual Report and Financial Statements for the year ended 31st December 2015.

The fair value hierarchy has the following levels:

Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.

Level 2 – Having inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (ie as prices) or indirectly (ie derived from prices).

Level 3 – Having inputs for the asset or liability that are not based on observable data.

30 June 2016	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
UK Equity Listed	92,239	–	–	92,239
AIM trades stocks	32,530	–	–	32,530
Investment in subsidiary	–	–	578	578
Net fair value	124,769	–	578	125,347
30 June 2015	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Financial assets at fair value through profit or loss
UK Equity Listed	97,870	–	–	97,870
AIM trades stocks	32,494	–	–	32,494
Investment in subsidiary	–	–	431	431
Net fair value	130,364	–	431	130,795
31 December 2015	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Financial assets at fair value through profit or loss
UK Equity Listed	92,853	–	–	92,853
AIM trades stocks	29,780	–	–	29,780
Investment in subsidiary	–	–	623	623
Net fair value	122,633	–	623	123,256

There were no transfers between Level 1 and Level 2 during the period.

A reconciliation of fair value measurements in Level 3 is set out in the following table.

	30 June 2016 £'000	30 June 2015 £'000	31 December 2015 £'000
Opening Balance	623	431	431
Purchases	–	–	–
Sales	–	–	(20)
Total gains or losses included in gains on investments in the Income Statement:
– on assets sold	–	–	–
– on assets held at period end	(45)	–	212
Closing Balance	578	431	623

The Level 3 investments relate to the Company's subsidiary, Discretionary Unit Fund Managers Limited which has been valued based of the most recent estimated NAV.

5.       Related Party Transactions

Under IFRS, the Directors have been identified as related parties. Their fees and interests for the year ended 31st December 2015 have been disclosed in the Director’s Annual Remuneration Report within the 2015 Annual Report and Financial Statements.

During the period the Company had the following transactions with Discretionary Unit Fund Managers Limited, its subsidiary undertaking:

	30 June 2016 £'000	30 June 2015 £'000	31 December 2015 £'000
Dividends received	–	113	121
	–	113	121
Amounts owed by subsidiary undertaking	140	475	140

6.       Going Concern

The Company's assets comprise mainly realisable equity securities and cash and the value of its assets is greater than its liabilities. Additionally, after reviewing the Company's budget including the current financial resources and projected expenses for the next twelve months and its medium-term plans, the Directors believe that the Company's resources are adequate for continuing in business for the foreseeable future. Accordingly it is appropriate to continue to prepare accounts on a going concern basis.

DIRECTORS’ STATEMENT OF RESPONSIBILITY FOR THE HALF YEARLY FINANCIAL REPORT

The Directors are responsible for preparing the Half Yearly financial report in accordance with applicable law and regulations.

The Directors confirm that to the best of their knowledge:

-     the condensed set of financial statements has been prepared in accordance with IAS 34 “Interim financial reporting”; and

-     the Half Yearly management report includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

This report was approved on 21st July 2016.

Dr D. M. BRAMWELL

Chairman

TOP TEN HOLDINGS

Investment	Holding	Value £
Scapa	8,000,000	20,680,000
RPC	1,800,000	14,076,000
Hill & Smith	1,434,230	12,714,449
VP	1,800,000	11,340,000
Treatt	5,775,000	9,240,000
Colefax	2,050,000	9,225,000
Macfarlane	16,325,851	8,897,589
British Polythene Industries	764,325	7,092,936
Spirax-Sarco Engineering	120,714	4,514,704
Menzies (John)	650,000	3,545,750

The actual holdings as at 30th June 2016 are, in each case, of ordinary shares and of the nominal value for which listing has been granted.

INDEPENDENT REVIEW REPORT TO RIGHTS AND ISSUES INVESTMENT TRUST PLC

INTRODUCTION

We have been engaged by the Company to review the financial statements in the Half Yearly Financial Report for the six months ended 30th June 2016 which comprises the Income Statement, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and the related explanatory notes 1 to 6. We have read the other information contained in the Half Yearly Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

The report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 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 them 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 group are prepared in accordance with IFRSs as adopted by the European Union. The financial statements included in this Half Yearly Financial Report have 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 information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than in 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 financial statements in the Half Yearly Financial Report for the six months ended 30th June 2016 are 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.

COLIN WAIN
For and on behalf of Begbies
Chartered Accountants
9 Bonhill Street
London EC2A 4DJ

21st July 2016

END