Half-yearly Report

HALF YEARLY FINANCIAL REPORT for the six months ended 30th June 2015

CHAIRMAN’S STATEMENT

June saw a substantial setback in equity markets and previous gains were almost entirely lost. The FTSE All-Share Index therefore only achieved a rise of 1.1% in the first half of 2015.

In contrast, the Trust made solid progress with a 20.7% rise in the net asset value of the capital shares to 6261.1p. The Trust was helped by a much better performance amongst smaller companies in the six months.

The interim dividend is being maintained at 10.5p per income share.

There is currently considerable uncertainty over the high profile difficulties of the Euro zone and this situation will have some impact on the European economy during the next few months. The second half is therefore likely to be more problematic, though this should be mitigated by continued strong corporate results.

Dr D. M. Bramwell
Chairman
23rd July 2015

You can view or download copies of the Half Yearly and the Annual reports from our website at http://www.rightsandissues.co.uk/.

The Half Yearly Report will be posted to shareholders and copies are available at the registered office of the Company.

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, 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.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30th June 2015

	Six months ended 30th June 2015
	Revenue £	Capital £	Total £
Investment income	1,571,219	–	1,571,219
Other operating income	184,912	–	184,912
Total income	1,756,131	–	1,756,131
Gains/(losses) on fair value through profit or loss assets	45,371	23,470,140	23,515,511
	1,801,502	23,470,140	25,271,642
Expenses
Investment management fee	–	–	–
Other expenses	480,297	–	480,297
	480,297	–	480,297
Profit before tax	1,321,205	23,470,140	24,791,345
Tax	–	–	–
Profit for the period	1,321,205	23,470,140	24,791,345
Earnings per share
Return per income share (p)	24.2p	238.5p	262.7p
Return per capital share (p)	44.2p	1073.3p	1117.5p

Consolidated Statement of Comprehensive Income (continued)

Six months ended 30th June 2014			Year ended 31st December 2014
Revenue £	Capital £	Total £	Revenue £	Capital £	Total £
1,492,429	–	1,492,429	3,020,835	–	3,020,835
198,490	–	198,490	384,927	–	384,927
1,690,919	–	1,690,919	3,405,762	–	3,405,762
20,429	3,931,346	3,951,775	(6,317)	(7,543,772)	(7,550,089)
1,711,348	3,931,346	5,642,694	3,399,445	(7,543,772)	(4,144,327)
–	–	–	–	–	–
360,418	–	360,418	680,050	–	680,050
360,418	–	360,418	680,050	–	680,050
1,350,930	3,931,346	5,282,276	2,719,395	(7,543,772)	(4,824,377)
–	–	–	–	–	–
1,350,930	3,931,346	5,282,276	2,719,395	(7,543,772)	(4,824,377)
23.3p	39.9p	63.2p	49.3p	(78.7p)	(29.4p)
44.3p	179.8p	224.1p	88.9p	(342.0p)	(253.1p)

The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS. 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 derive from continuing operations. All income is attributable to the equity holders of the parent Company and there are no minority interests.

The interim dividend of 10.5p net (2014: 10.5p net) per Income share and amounting to £258,300 (2014: £258,300) is payable on 30th September 2015 to shareholders on the register as at 28th August 2015 (ex-dividend 27th August 2015). The sum accruing by way of dividend to the Capital shareholders will, in view of the small sum involved, be included in the final dividend.

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 2015 and 30th June 2014 has not been audited.

The information for the year ended 31st December 2014 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 2015 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information and their report is on page 11.

CONSOLIDATED BALANCE SHEET

as at 30th June 2015

Non-current assets	30th June 2015 £	30th June 2014 £	31st December 2014 £
Goodwill	65,191	65,191	65,191
Investments – Fair value through profit or loss	130,364,032	122,314,380	111,307,531
	130,429,223	122,379,571	111,372,722
Current Assets
Trading investments	333,986	509,248	394,017
Trade and other receivables	776,116	819,059	470,403
Cash and cash equivalents	8,854,415	4,509,908	4,059,299
	9,964,517	5,838,215	4,923,719
Total Assets	140,393,740	128,217,786	116,296,441
Current Liabilities
Trade and other payables	790,577	971,036	123,044
Current tax payable	–	–	–
	790,577	971,036	123,044
Total assets less current liabilities	139,603,163	127,246,750	116,173,397
Net Assets	139,603,163	127,246,750	116,173,397
Equity
Called up share capital	1,025,000	1,025,000	1,025,000
Share premium account	225,326	225,326	225,326
Retained reserves:
Capital reserve	55,901,268	51,973,014	51,973,014
Revaluation reserve	80,074,002	72,007,234	60,532,116
Dividend equalisation reserve	2,377,567	2,016,176	2,417,941
Total equity	139,603,163	127,246,750	116,173,397
Net asset value per share
Income shares	1500.8p	1366.7p	1263.6p
Capital shares	6261.1p	5708.8p	5188.4p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30th June 2015

	Share capital £	Share premium account £	Capital reserve £	Revaluation Reserve £	Dividend equalization reserve £	Total £
For the six months ended June 2014
Balance at 31st December 2013	1,225,000	225,326	51,796,430	68,252,472	2,206,746	123,705,974
Profit for the period	–	–	176,584	3,754,762	1,350,930	5,282,276
Total recognised income and expense	1,225,000	225,326	51,973,014	72,007,234	3,557,676	128,988,250
Dividends	–	–	–	–	(1,491,500)	(1,491,500)
Redemption of Preference shares	(200,000)	–	–	–	(50,000)	(250,000)
Balance at 30th June 2014	1,025,000	225,326	51,973,014	72,007,234	2,016,176	127,246,750
	Share capital £	Share premium account £	Capital reserve £	Revaluation Reserve £	Dividend equalization reserve £	Total £
For the six months ended June 2015
Balance at 31st December 2014	1,025,000	225,326	51,973,014	60,532,116	2,417,941	116,173,397
Profit for the period	–	–	3,928,254	19,541,886	1,321,205	24,791,345
Total recognised income and expense	1,025,000	225,326	55,901,268	80,074,002	3,739,146	140,964,742
Dividends	–	–	–	–	(1,361,579)	(1,361,579)
Redemption of Preference shares	–	–	–	–	–	–
Balance at 30th June 2015	1,025,000	225,326	55,901,268	80,074,002	2,377,567	139,603,163

CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 30th June 2015

	2015 £	2014 £
Cashflows from operating activities
Profit before tax	24,791,345	5,282,276
Adjustments for:
(Gains)/losses on investments	(23,470,140)	(3,931,346)
Purchase of investments	(1,733,422)	(1,793,489)
Proceeds of investments	6,147,061	1,195,304
Movement in trading investments	60,031	263,580
Operating cash flows before movements in working capital	5,794,875	1,016,325
Decrease/(increase) in receivables	(305,713)	(201,857)
Increase/(decrease) in payables	(37,226)	164,128
Net cash from operating activities before income taxes	5,451,936	978,596
Income taxes paid	–	–
Net cash from operating activities	5,451,936	978,596
Cash flows from financing activities
Preference shares redeemed	–	(250,000)
Dividends paid	(656,820)	(783,100)
Net cash (used in)/from financing activities	(656,820)	(1,033,100)
Net increase/(decrease) in cash and cash equivalents	4,795,116	(54,504)
Cash and cash equivalents at beginning of year	4,059,299	4,564,412
Cash and cash equivalents at end of period	8,854,415	4,509,908

NOTES TO THE HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2015

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. Dividends	Company 2015 £	Company 2014 £
Amounts recognised as distributions to equity holders in the period:
Income (Paid)
Final dividend for the year ended 31st December 2014 of 25.50p (2013: 20.50p) per share	627,300	504,300
Special dividend for the year ended 31st December 2014 of Nil (2013: 10.00p) per share	–	246,000
Capital (Paid)
Final dividend for the year ended 31st December 2014 of 1.80p (2013: 1.50p) per share	29,520	24,600
Special dividend for the year ended 31st December 2014 of Nil (2013: 0.50p) per share	–	8,200
Capital Supplementary (Accrued)^
Payable 4th January 2016 of 86.6585p (2015: 86.3902p) per share	704,759	708,400
Dividends on non-equity shares:
Cumulative preference 5.5% (Accrued)	–	–
	1,361,579	1,491,500

^ The accrual calculation basis has changed to actual days in the period, previously actual months. Using this method the 2014 accrual would be £702,577.

Income

Proposed interim dividend for the year ended

31st December 2015 of 10.5p (2014: 10.5p) per share                 258,300    258,300

This was approved by the Board on 23rd July 2015 and has not been included as a liability at 30th June 2015.

3. Income	Group 2015 £	Group 2014 £
Total income comprises:
Dividends	1,570,641	1,491,781
Interest	578	648
Other income	184,912	198,490
	1,756,131	1,690,919

4. Related Party Transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

The Company’s subsidiary, Discretionary Unit Fund Managers Limited, manages the Discretionary Unit Fund and acts as principal in respect of all transactions of units in that Fund. In respect of this its fee for the six months amounted to £184,912 (2014: £198,490) and the amount owed by the Fund at the period end was £30,346 (2014: £27,488).

5. Going concern

The Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements. The assets of the Company consist mainly of securities that are readily realisable and, accordingly, the Company has adequate financial resources to continue in operational existence for the foreseeable future.

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 23rd July 2015.

Dr D. M. Bramwell Chairman

TOP TEN HOLDINGS

Holding	Investment	Value £
10,425,000	Scapa Group	20,719,688
2,166,666	RPC Group	14,451,662
1,800,000	VP	14,040,000
1,434,230	Hill & Smith Holdings	9,666,710
5,775,000	Treatt	9,297,750
2,050,000	Colefax Group	9,122,500
2,700,000	Brammer	8,336,250
8,480,000	Renold	6,890,000
16,325,851	Macfarlane Group	6,856,857
764,325	British Polythene Industries	5,140,086

INDEPENDENT REVIEW REPORT TO

RIGHTS AND ISSUES INVESTMENT TRUST PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly financial report for the six months ended 30th June 2015 which comprises the condensed consolidated income statement, balance sheet, statement of changes in equity, cash flow statement and the related explanatory notes 1 to 5. 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 condensed set of financial statements included in this Half Yearly 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 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 condensed set of financial statements in the Half Yearly financial report for the six months ended 30th 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.

Colin Wain
For and on behalf of Begbies  9 Bonhill Street
Chartered Accountants   London EC2A 4DJ

23rd July 2015