Annual Financial Report

RNS Number : 8916I

Martin Currie Global Portfolio Tst

30 March 2015

 



Martin Currie Global Portfolio Trust plc (the "Company")

Annual Financial Results

Year to 31 January 2015

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 January 2015 or 2014 but is derived from those accounts.  Statutory accounts for 2014 have been delivered to the Registrar of Companies and those for 2015 will be delivered following the Company's annual general meeting. 

The auditor has reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

A copy of the annual report and accounts has also been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do

The annual general meeting of the Company will be held at the offices of Martin Currie, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2ES on 11 June 2015 at 12.30pm.  Full notice of the meeting can be found within the annual report and accounts.

The unedited full text of those parts of the annual report and accounts for the year ended 31 January 2015, which require to be published are set out on the following pages.

Financial Summary

Total returns*

	For the year ended 31 January 2015	For the year ended 31 January 2014
Net asset value per share**	16.1%	8.1%
Benchmark	17.3%	10.5%
Share price	17.4%	9.8%

Income

	For the year ended 31 January 2015	For the year ended January 2014
Revenue per share***	3.92p	3.76p
Dividend per share	4.10p	4.00p

Ongoing Charges****

	For the year ended January 2015	For the year ended January 2014
Ongoing charges	0.73%	0.75%
Performance Fee	-	-
Ongoing charges plus performance fee	0.73%	0.75%

*        The combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid.

**       The net asset value is exclusive of income with dividends reinvested.

***      For details of calculation, refer to note 2.

****     Ongoing charges (as a percentage of shareholders' funds) are calculated using average net assets over the year. The ongoing charges figure has been calculated with the AIC's recommended methodology.

Chairman's Statement

Welcome to your annual report, covering the 12 months to 31 January 2015. It is a highly competitive environment with over 20 companies competing in our peer group, and I am pleased to report that your Company has enjoyed top quartile share price performance against the peer group over the year.

This year Tom Walker marks his 15th anniversary as your manager. During this long tenure the Company has enjoyed a sustained period of good investment performance, and I look forward to this continuing.

I believe that there are four core elements that help to set your Company apart: an actively managed global portfolio of the world's leading large-cap companies; a consistently high dividend yield relative to the peer group; liquidity for shareholders to buy and sell without the risk of a material discount; and a focus on minimising costs.

Performance

Strong performance in most of the world's major stockmarkets has provided good returns this year. The Company's share price rose by 14.7% which exceeded the FTSE World benchmark return of 14.4% helped by the share price at the end of the year being at a small premium to the net asset value (NAV). If the effect of dividends is included, the share price total return for the Company was in line with the index at 17.4% and 17.3% respectively. The underlying return on the Company's NAV per share of 16.1% was however, behind the benchmark. A performance fee is therefore not payable this year.

Income and dividends

During the year, interim dividends of 2.7p were paid in July, October and January and the Board has declared a fourth interim dividend of 1.4p which will be paid on 24 April 2015 to shareholders on the register at 10 April 2015. This will bring total dividend payments for the period to 4.1p per share, representing an increase of 2.5% on the previous year and maintains the Company's position as having a relatively high dividend yield in the Association of Investment Companies' (AIC) global sector.

Liquidity

The 'zero discount' policy represents a significant advantage, both for existing shareholders and in attracting new investors. It ensures that the Company's shares can always be sold at close to NAV in normal market conditions. Since its introduction, the discount has been virtually eliminated and shares have occasionally traded at a premium during the year. Share buybacks are an essential part of this strategy but I am pleased to report that the majority of shares bought back were reissued during the year. The Board is committed to the policy and the benefits it offers.

Ongoing charges

The Board set a target for ongoing charges for the year to be less than 0.75% which has been achieved and this steady trend of improving value for shareholders is expected to continue. The Company has delivered savings in the directors' fees and other administration costs offset by a modest additional investment in improving our shareholder communications.

Manager

2015 marks Tom Walker's 15th anniversary as manager (almost the entire life of the Company). Backed by his team of investment professionals, Tom's stockpicking skills have served the Company well through an eventful period of change, challenge and opportunity. 

Since 2000, a number of events caused market turbulence including the end of the technology bubble, the attacks of 9/11 that closed US stockmarkets for a week, corporate fraud as exemplified by Enron and Bernie Madoff, the sub-prime mortgage crisis that triggered a global credit crunch in 2008 and rocked markets around the world, ultimately leading to ongoing bank bail-outs, and experimental programmes of quantitative easing. On the flip side of the coin, we have enjoyed the amazing growth of China and India into world financial powers, new frontier markets opening up to investment and some positive periods of sustained returns for stockmarkets.

Those who have held their shares for the last 15 years have seen a total return of 195% compared with about 120% in the market and around 40% which would have been earned from interest on bank deposits.

Global investment offers great long-term opportunities but also short-term risks, and having such an experienced manager as Tom in place is a distinctive strength of the Company.

Investment Management Update

Legg Mason

During the year Legg Mason (LM) completed the purchase of Martin Currie. Martin Currie is now an independently managed investment affiliate of LM and becomes the flagship international equity business within the LM Group.

Alternative Investment Fund Managers Directive (AIFMD)

This European Union directive introduced additional regulatory oversight of the investment fund industry last year aimed at improving investor protection for funds managed and/or marketed in the European Union. On 16 July 2014, the Company obtained approval to register as a small UK alternative investment fund manager (AIFM) under the AIFMD. The Board believes this structure is the most appropriate and lowest-cost option of implementing this regulation for the Company.

Outlook

The economic outlook for the year ahead will be shaped by the broadly positive impact of the lower crude oil prices as well as the ongoing efforts of central banks to avoid deflation and stimulate their economies. The continued strength of the US economy is a particularly important element in this outlook as are the prospects for growth in Asia. There will also undoubtedly be challenges, perhaps in Europe or the Middle East, and the Board believes that the strategy of actively selecting the best growth stocks from among the world's larger companies provides a sound basis for continuing the positive long-term performance of your investment in the Company.

New tax year

As the new tax year begins in April, I would like to remind you that the Company's shares qualify for tax efficient wrapper products like individual savings account (ISA) and self-invested personal pension (SIPP) products, as well as many other investment wrappers that can be used, including those designed for children.

Updates and resources

The Company's website at www.martincurrieglobal.com is a comprehensive source of information and includes regular manager updates and outlook videos, monthly performance factsheets and independent research reports.

I thank you for your continued support. Please contact me if you have any questions regarding your Company.

Neil Gaskell

Chairman

30 March 2015

Manager's review

Market review

Returns from global equities over the last year have been excellent and this is especially the case for UK-based investors, for whom the benefit has been enhanced by the dollar's strength against sterling. Our benchmark index, the FTSE World, delivered a total return of 17.3%, which, in the context of near-zero interest rates and considerable political and economic uncertainty, strikes me as very healthy. While many companies have enjoyed good earnings growth over the last year, stockmarket returns have generally outpaced earnings as investors have sought more attractive opportunities than the paltry interest rates on offer on bank deposits.

By region, the USA provided the best returns of the major markets, up 24.6%; emerging market equities also performed well, up 15.3%, after a difficult few years. European market returns were the poorest, up 7.3%, though of course, there was a very large spread here: Greece fell 60%!

Returns from equities have diverged widely depending on region and sector

However, in the second half of the financial year, it was the collapse in the oil price that was the most significant influence on markets around the world: Brent crude fell 53% to US$53 per barrel. Hardly surprisingly, companies in the oil and gas sector saw significant share price declines as a result and that sector was the worst performing, falling 15% in the six months. Countries that rely heavily on oil exports, such as Russia, Norway and Brazil also suffered market declines and currency weakness. Consumers have enjoyed some benefit from lower energy costs and that may bolster consumption. In anticipation of that, consumer services was the strongest performing sector in the last six months.

The US economy has continued to make modest progress but Japan and the eurozone have failed to break out of their slump. As a result, we have seen further measures of quantitative easing in Japan and Europe while the US Federal Reserve has been able to cease that policy, though not to increase interest rates yet. China's economy has also slowed and there too, authorities have made attempts to bolster growth through monetary stimulus. Unquestionably, the strong performance of equity markets has been fuelled, not by growth, but by the sheer weight of money in circulation.

Investment performance and portfolio activity

The Company's NAV return of 16.1% lagged that of the benchmark over the 12-month period by just over 1%. I reported outperformance at the half year stage so it was the environment in the second half of the year that counted against performance, including the collapse in the oil price (which I did not foresee). Most of our worst-performing stocks were in the energy and resources sectors. Concerns focused on the impact on dividend payments and balance-sheet debt since the lower oil price has an immediate detrimental impact on corporate cash flows. A number of companies have addressed this with asset sales and cuts to projected capital expenditure. In my view, ignoring the very short term, these announced cuts in expenditure and activity are creating the conditions for the next boom in energy prices in a few years time as demand picks up and supply becomes inadequate. As such, many stocks in the sector are offering decent upside longer term.

Looking at performance in the year as a whole, as well as our energy investments, our two Japanese financial stocks, Orix and Mitsubishi UFJ did poorly, despite reasonable operational results. A healthier Japanese market environment should allow these stocks an improved rating. At the other end of the scale, our holding in L Brands (known better in the High Street as Victoria's Secret and Bath & Bodyworks) was our top contributor, growing strongly in its home market of the US and increasingly internationally. Apple was our next best contributor - the iPhone 6 is its latest success story. Perhaps unsurprisingly, given the outperformance of that country, nine of our top 10 contributors were US-based, so it is worth highlighting the one that was not. UK-based life insurance and financial services multinational Prudential operates in Asia, America and the UK and has enjoyed good growth in all three regions.

I made a number of additions to the portfolio during the year. These investment decisions are driven by stock specifics but many of the additions are significantly exposed to the US economy: for example retailer TJX, cable company Comcast and UK-quoted equipment rental company Ashtead. In Japan, Komatsu, a construction equipment manufacturer, was added as we believe its earnings have troughed in this cycle, though the recovery may be drawn out. Our disposals during the year included McDonald's, where growth is being challenged by strong competition; speciality chemicals and sustainable technologies firm Johnson Matthey's valuation appeared stretched after strong performance; and Japanese trading group Mitsui & Company was sold to make way for Komatsu.

In summary, the shape of the portfolio has not changed significantly over the year. Performance and transactions have reduced our exposure to resources, including oil and gas, and we have higher weightings in the industrial and consumer services sectors. More importantly, we continue to focus the portfolio, investing in around 60 companies that we believe can combine to generate long-term outperformance.

Outlook

The world is faced with some real political crises. Among them:

·      How to resolve the Ukraine crisis and reintegrate Russia while Russia maintains its sovereignty over Crimea.

·      How to allow Greece to remain in the eurozone while maintaining any credibility in the union.

·      How to end religious terrorism.

While this list is not comprehensive, it is at least well known and much discussed. As such, there is probably scope for both negative and positive surprise as these situations develop. Not helped by these issues, however, the global economic outlook continues to deteriorate. Deflation has reappeared in our vocabulary as a present threat and the best efforts of central banks to stimulate broad economic recovery have thus far failed. Even in the US, the economy is not yet out of the woods, which is important because the rest of the world is increasingly reliant on that US recovery.

All that said, I concluded in last year's annual report that 'the valuation of US equities… has risen considerably but could rise higher, history would suggest' (I use the US as a proxy for global equities because they have performed best of late and therefore look most expensive on simple measures). Those valuations have indeed risen higher and could continue to do so. Markets are vulnerable to shocks, be they economic or political. However, our experience in these times of zero or low interest rates is that a wall of money greets any market setback.

That sounds complacent but, clearly, it is hard to make value-added comment on the 'big picture' political outlook. As such, I will concentrate on the 'small picture', seeking out companies whose products or services continue to find appeal in uncertain times and whose share price appears underrated.

Tom Walker

30 March 2015

 

Portfolio Summary

Portfolio distribution   

By region	31 January 2015 Company	31 January 2015 FTSE World index	31 January 2014 Company	31 January 2014 FTSE World index
North America	52.2%	56.4%	52.2%	53.8%
Developed Europe ex UK	15.3%	16.0%	15.3%	17.1%
United Kingdom	12.9%	7.6%	12.6%	8.6%
Developed Asia Pacific ex Japan	9.3%	6.5%	9.5%	6.7%
Japan	6.2%	8.5%	6.7%	8.8%
Global Emerging Markets	2.5%	4.8%	2.0%	4.8%
Middle East	1.6%	0.2%	1.7%	0.2%
	100.0%	100.0%	100.0%	100.0%

By Sector	31 January 2015 Company	31 January 2015 FTSE World index	31 January 2014 Company	31 January 2014 FTSE World index
Financials	21.7%	21.3%	22.3%	21.8%
Industrials	17.6%	12.4%	14.0%	12.8%
Consumer services	15.8%	11.2%	12.8%	10.7%
Healthcare	9.4%	11.4%	10.4%	10.1%
Oil and gas	9.1%	10.8%	10.3%	8.5%
Technology	7.2%	7.2%	9.9%	10.0%
Basic materials	6.4%	13.6%	8.1%	5.9%
Consumer goods	5.7%	5.1%	6.4%	13.2%
Telecommunications	4.7%	3.5%	3.8%	3.7%
Utilities	2.4%	3.5%	2.0%	3.3%
	100.0%	100.0%	100.0%	100.0%

By asset class (including cash and borrowings)	31 January 2015	31 January 2014
Equities	98.5%	99.7%
Cash	1.5%	0.3%
	100.0%	100.0%

Largest 10 Holdings	31 January 2015 Market value £000	31 January 2015 % of total portfolio	31 January 2014 Market value £000	31 January 2014 % of total portfolio
JP Morgan Chase	6,883	3.8	6,279	3.8
Prudential	6,576	3.6	4,886	3.0
L Brands	6,451	3.5	2,554	1.6
Roche	6,411	3.5	4,236	2.6
Apple	6,003	3.3	4,484	2.7
United Technologies	5,666	3.1	5,042	3.1
Lockheed Martin	5,330	2.9	3,828	2.3
Verizon Communications	4,861	2.7	-	-
Schneider Electric	4,557	2.5	3,246	2.0
eBay	4,460	2.5	4,013	2.4

	Sector	Country	Market value £	% of total portfolio
North America			94,920,115	52.2
JP Morgan Chase	Financials		6,883,393	3.8
L Brands	Consumer services		6,451,152	3.5
Apple	Technology		6,003,014	3.3
United Technologies	Industrials		5,665,917	3.1
Lockheed Martin	Industrials		5,330,396	2.9
Verizon Communications	Telecommunications		4,861,496	2.7
eBay	Consumer services		4,460,481	2.5
Sempra Energy	Utilities		4,404,068	2.4
LyondellBasell Industries	Basic materials		4,203,857	2.3
CVS Health	Consumer services		3,679,984	2.0
American International Group	Financials		3,592,280	2.0
Phillip Morris International	Consumer goods		3,392,105	1.9
TJX Companies	Consumer services		3,355,198	1.8
AbbVie	Healthcare		3,289,100	1.8
Pfizer	Healthcare		3,224,048	1.8
Microsoft	Technology		2,910,499	1.6
Comcast	Consumer services		2,812,856	1.5
Twenty-First Century Fox	Consumer services		2,709,872	1.5
Pentair	Industrials		2,657,292	1.5
Bank of Montreal	Financials		2,519,241	1.4
Cooper Companies	Healthcare		2,320,212	1.3
PNC Financial	Financials		2,195,518	1.2
Chevron	Oil and gas		2,194,976	1.2
Cognizant Technology Solutions	Technology		2,151,648	1.2
Anthem	Healthcare		1,860,415	1.0
Praxair	Basic materials		1,791,097	1.0

	Sector	Country	Market value £	% of total portfolio
Developed Europe ex UK			27,849,324	15.3
Roche	Healthcare	Switzerland	6,410,812	3.5
Schneider Electric	Industrials	France	4,556,906	2.5
Safran	Industrials	France	3,429,169	1.9
ProSiebenSat.1 Media	Consumer services	Germany	2,862,735	1.6
Total	Oil and gas	France	2,560,754	1.4
Anheuser-Busch Inbev	Consumer goods	Belgium	2,443,885	1.3
SCOR	Financials	France	1,972,596	1.1
DNB	Financials	Norway	1,678,825	0.9
ENI	Oil and gas	Italy	1,053,503	0.6
Seadrill	Oil and gas	Norway	880,139	0.5

	Sector	Country	Market value £	% of total portfolio
United Kingdom			23,444,133	12.9
Prudential	Financials		6,575,936	3.6
HSBC Holdings	Financials		3,860,341	2.1
BG Group	Oil and gas		3,654,879	2.0
Ashtead Group	Industrials		3,004,360	1.7
Rio Tinto	Basic materials		2,281,646	1.3
BHP Billiton	Basic materials		2,057,285	1.1
Royal Dutch Shell	Oil and gas		1,229,028	0.7
Candover Investments	Private equity		780,658	0.4

	Sector	Country	Market value £	% of total portfolio
Developed Asia Pacific ex Japan			16,906,057	9.3
M1	Telecommunications	Singapore	3,592,743	2.0
Jardine Matheson Holdings	Industrials	Singapore	3,224,538	1.8
Woolworths	Consumer services	Australia	2,225,764	1.2
China Construction Bank	Financials	Hong Kong	2,215,102	1.2
China Merchants Holdings	Industrials	Hong Kong	2,154,866	1.2
United Overseas Bank	Financials	Singapore	2,007,497	1.1
CNOOC	Oil and gas	Hong Kong	1,485,547	0.8

	Sector	Country	Market value £	% of total portfolio
Japan			11,235,215	6.2
Toyota	Consumer goods		3,708,897	2.0
Mitsubishi UFJ Financial Group	Financials		3,444,798	1.9
Orix	Financials		2,284,203	1.3
Komatsu	Industrials		1,797,317	1.0

	Sector	Country	Market value £	% of total portfolio
Global Emerging Markets			4,551,145	2.5
Taiwan Semiconductor Manufacturing Company	Technology	Taiwan	2,492,126	1.4
PT Astra International	Consumer goods	Indonesia	2,059,019	1.1

	Sector	Country	Market value £	% of total portfolio
Middle East			2,892,407	1.6
Check Point Software Technologies	Technology	Israel	2,892,407	1.6

Total portfolio holdings

181,798,396

100.0

Principal risks and uncertainties

Risk and mitigation

The Company's business model is longstanding and resilient to most of the short term uncertainties that it faces, which the Board believes are effectively mitigated by its internal controls and its oversight of the investment manager, as described in the table below.  Its principal risks and uncertainties are therefore largely longer term and driven by the inherent uncertainties of investing in global equity markets. The Board believes that it is able to respond to these longer term risks and uncertainties with effective mitigation so that both the potential impact and the likelihood of these seriously affecting shareholders' interests are materially reduced.

Risks are regularly monitored at board meetings and the Board's planned mitigation measures are described in the table below. As part of its annual strategy meeting, the Board carried out a robust assessment of the principal risks facing the Company. The Board has identified the following principal risks to the Company:

Loss of s1158-1159 status - Loss of S1158-9 tax status would have serious consequences for the attractiveness of the Company's shares. The Board considers that, given the regular oversight of this risk the likelihood of this risk occurring is minimal.

Long term investment underperformance- The Board monitors the implementation and results of the investment process with the manager, who attends all board meetings and reviews data that show statistical measures of the Company's risk profile. Were long-term investment underperformance to emerge despite the mitigation measures taken by the investment manager, the Board would be able to take appropriate action to manage this risk.

Decline in the overall size of the Company - The Board recognises that the 'zero discount' policy allows shareholders to sell their stock in any volume at close to NAV. Although this improved liquidity encourages investment in the Company, it could also increase the risk of a significant decline in the size of the Company. The Company has a clear marketing strategy which is set by the Board and delivered by a well-resourced marketing function within the investment manager. The Board also regularly monitors key indicators for any change in the Company's reputational risk profile.

Failure to manager shareholder relations- The Board recognises the importance of managing shareholder relations. The Board regularly monitors the list of major shareholders and the shareholder profile.  The directors meet, from time to time, with major shareholders and the investment manager maintains regular contact with the Company's institutional shareholders. The Company aims to provide all shareholders with a full understanding of the Company's activities and performance by way of the annual and half-yearly reports. The Company's website, which is independent of the investment manager's website, provides all shareholders with relevant information about the Company including its daily net asset value and monthly updates. In addition to this all shareholders have the opportunity, and are encouraged, to attend the Company's annual general meeting ('AGM') and to give their views to the Company using the email address noted on the back page of the annual report.

Discount management policy - The Board adopted a 'zero discount' policy in July 2013 which is operated by the investment manager and the broker, using parameters clearly set out by the Board. There could be a serious impact on the reputation of the Company if the parameters were not followed, but the Board believes that this will not happen in normal market conditions.

The investment manager ceases to effectively manage investment trusts or its reputation fails - The Board reviews the performance and continued appointment of the investment manager on a regular basis, via the management engagement committee.  The Board is independent of the investment manager and, if the continued appointment of Martin Currie was not in the best interest of shareholders, a new investment manager would be appointed.

Index liquidity test - The liquidity of the Company is monitored by the Board at every board meeting. The Board considers the likelihood of failing the index liquidity test to be very low but were it to happen the resulting loss of index investors would reduce the Company's assets.

Following the ongoing assessment of the principal risks facing the Company, and its current position, the Board is confident that Company will be able to continue in operation and meet its liabilities as they fall due. The Board believes that the processes of internal control that the Company has adopted and oversight by the investment manager continue to be effective.

Directors' Responsibilities

Statement of directors' responsibilities

The directors are responsible for preparing the annual report, the directors' remuneration report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

·      select suitable accounting policies and apply them consistently;

·      make judgements and accounting estimates that are reasonable and prudent;

·      state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements respectively; and

·      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the directors' remuneration report comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The financial statements are published on the Company's website (www.martincurrieglobal.com) which is maintained by the investment manager. The directors are responsible for the maintenance and integrity of the Company's website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the directors confirms that, to the best of theirknowledge:

·      the financial statements, which have been prepares in accordance with the United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company); and

·      the report of the directors and manager's review include a fair, balanced and understandable review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

Going concern status

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the chairman's statement, manager's review, strategic report and the report of the directors.

The financial positionof the Company as at 31 January2015 is shown on the balance sheet.

Note 15 sets out the Company's risk management policies, includingthose covering market risk, liquidity risk and credit risk.

In accordance with the Financial Reporting Council's guidance on going concern and liquidity risk issued in October 2009, the directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The directors are mindful of the principal risks and uncertainties and have reviewed revenue forecasts and they believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and for at least one year from the date of signing of these financial statements. Accordingly, the directors continue to adopt the going concern basis in preparing these financial statements.

Neil Gaskell

Chairman

30 March 2015

Income Statement

		Year to 31 January 2015			Year to 31 January 2014
	Note	Revenue	Capital	Total	Revenue	Capital	Total
		£000	£000	£000	£000	£000	£000
Net gains on investments	7	-	22,345	22,345	-	7,193	7,193
Net currency losses	12	-	(62)	(62)	-	(14)	(14)
Income	3	5,213	-	5,213	5,108	-	5,108
Investment management fee	5	(290)	(579)	(869)	(279)	(558)	(837)
Other expenses	5	(403)	-	(403)	(429)	-	(429)
Net return on ordinary activities before taxation		4,520	21,704	26,224	4,400	6,621	11,021
Taxation on ordinary activities	6	(490)	-	(490)	(490)	-	(490)
Net return attributable to shareholders		4,030	21,704	25,734	3,910	6,621	10,531
Net returns per ordinary share	2	3.92p	21.10p	25.02p	3.76p	6.37p	10.13p

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies (AIC) Statement of Recommended Practice.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the year.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

There is no material difference between the net return on ordinary activities before taxation and the net return attributable to shareholders stated above and their historical cost equivalents.

Balance Sheet

		As at 31 January 2015		As at 31 January 2014
	Note	£000	£000	£000	£000
Fixed assets
Investments at fair value through profit or loss
Listed on stock exchanges			181,798		163,755
	7		181,798		163,755
Current Assets
Debtors	8	289		271
Cash at bank and in hand	9	2,813		458
		3,102		729
Creditors
Amounts falling due within one year	10	(949)		(283)
Net current assets			2,153		446
Total assets less current liabilities			183,951		164,201
Capitals and reserves
Called-up share capital	11	5,224		5,224
Capital redemption reserve		10,793		10,793
Special reserve distributable		114,383		116,249
Capital reserve	11	47,932		26,228
Revenue reserve		5,619		5,707
Total shareholders' fund			183,951		164,201
Net Asset Value per ordinary share of 5p	2		178.5p		157.4p

Martin Currie Global Portfolio Trust plc is registered in Scotland, company number 192761.

The financial statements were approved by the board of directors on 30 March 2015 and signed on its behalf by Neil Gaskell, Chairman

Reconciliation of Movements in Shareholders' Fund

 

	Note	Called up share capital £000	Capital redemption reserve £000	Special distributable reserve £000	Capital reserve £000	Revenue reserve £000	Total £000
Reconciliation of movements in shareholders' funds for the year to 31 January 2015
At 31 January 2014		5,224	10,793	116,249	26,228	5,707	164,201
Ordinary shares bought back during the year		-	-	(4,964)	-	-	(4,964)
Ordinary shares issued during the year		-	-	3,098	-	-	3,098
Gains on realisation of investments at fair value	7	-	-	-	8,065	-	8,065
Movement in currency gains/(losses)		-	-	-	(62)	-	(62)
Movement in fair value gains/(losses)	7	-	-	-	14,280	-	14,280
Capitalised expenses		-	-	-	(579)	-	(579)
Net revenue		-	-	-	-		4,030
Dividends paid	4	-	-	-	-		(4,118)
At 31 January 2015		5,224	10,793	114,383	47,932	5,619	183,951

	Note	Called up share capital £000	Capital redemption reserve £000	Special distributable reserve £000	Capital reserve £000	Revenue reserve £000	Total £000
Reconciliation of movements in shareholders' funds for the year to 31 January 2014
At 31 January 2013		5,227	10,790	116,378	19,607	7,397	159,399
Ordinary shares bought back during the year		-	-	(2,538)	-	-	(2,538)
Ordinary shares issued during the year		-	-	2,409	-	-	2,409
Ordinary shares cancelled during the year		(3)	3	-	-	-	-
Gains on realisation of investments at fair value	7	-	--	-	8,964	-	8,964
Movement in currency gains/(losses)		-	-	-	(14)	-	(14)
Movement in fair value gains/(losses)	7	-	-	-	(2,094)	-	(2,094)
Capitalised expenses		-	-	-	(558)	-	(558)
Capital dividends received	3	-	-	-	323	-	323
Net revenue		-	-	-	-	3,910	3,910
Dividends paid	4	-	-	-	-	(5,600)	(5,600)
At 31 January 2014		5,224	10,793	116,249	26,228	5,707	164,201

The notes to the accounts form part of these financial statements.

 

Cash Flow Statement

	Note	Year ended 31 January 2015		Year ended 31 January 2014
		£000	£000	£000	£000
Net cash inflow from operating activities	12		3,451		3,297
Capital expenditure and financial investment
Capital distributions	3	-		323
Payment to acquire investments		(32,689)		(44,012)
Proceeds from sales of investments		37,639		46,530
Net Cash inflow from capital expenditure and financial investment			4,950		2,841
Equity dividends paid	4		(4,118)		(5,600)
Net Cash inflow before financing			4,283		538
Financing
Repurchase of ordinary share capital		(4,964)		(2,538)
Shares issued for cash		3,098		2,409
Net cash from financing	11		(1,866)		(129)
Increase in cash	13		2,417		409

The notes form part of these financial statements

 

Notes to the Financial Statements

1    Accounting policies

a)   Basis of preparation - the financial statements have been prepared under the historical cost convention (modified to include investments at fair value through profit or loss) on a going concern basis and in accordance with applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in January 2009. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The Company is a UK listed company with a predominantly UK shareholder base. The results and the financial position of the Company are expressed in sterling, which is the functional and presentational currency of the Company. The accounting policies have been disclosed consistently and in line with Companies Act 2006.

b)   Income from investments (other than capital dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted, when the Company's right to receive payment is established. UK investment income is stated net of the relevant tax credit. Overseas dividends include any taxes deducted at source. Special dividends are credited to capital or revenue, according to the circumstances. Scrip dividends are treated as unfranked investment income; any excess in value of the shares received over the amount of the cash dividend is recognised as a capital item in the income statement. Income from underwriting commission is recognised as earned.

c)   Interest receivable and payable, management fees, performance fees and other expenses are treated on an accruals basis.

d)   The management fee and finance costs in relation to debt are recognised two-thirds as a capital item and one-third as a revenue item in the income statement in accordance with the board's expected long-term split of returns in the form of capital gains and income, respectively. The performance fee is recognised 100% as a capital item in the income statement as it relates entirely to the capital performance of the Company. All expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case, they are added to the cost of the investment or deducted from the sale proceeds.

e)   Investments - investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured as fair value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value are included in net profit or loss for the year as a capital item in the income statement and are ultimately recognised in the capital reserve. In accordance with FRS29, all investments have been categorised as Level 1 - quoted in an active market.

f)    Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the income statements.

g)   Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange ruling at the date of the balance sheet or at the related forward contract rate. Transactions in foreign currency are converted to sterling at the rate ruling at the date of the transaction or, where forward foreign currency contracts have been taken out, at contractual rates and included as an exchange gain or loss in the capital reserve or the revenue account depending on whether the gain or loss is of a capital or revenue nature.

h)   Cash at bank comprises cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value. Other debtors and creditors (excluding borrowings) do not carry any interest, are short-term in nature and are accordingly stated at nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

i)    Dividend payable - under FRS21 fourth interim dividends should not be accrued in the financial statements unless they have been approved by shareholders before the Balance Sheet date. First, second and third interim dividends are only recognised when they have been paid. Dividends payable to equity shareholders are recognised in the Reconciliation of Movements in Shareholders' Funds when they have been approved by shareholders in the case of a fourth interim dividend, or paid in the case of the first, second and third interim dividend and become a liability of the Company.

j)    Capital reserve - gains or losses on realisation of investments and changes in fair values of investments are transferred to the capital reserve. Any changes in fair values of investments that are not readily convertible to cash are treated as unrealised gains or losses within the capital reserve. The capital element of the management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve. The cost of share buybacks include the amount of consideration paid, including directly attributable costs and are deducted from the special distributable reserve until the shares are cancelled. The special distributable reserve was created through the cancellation and reclassification of the share premium account in 1999 and 2004, and thereafter the cost of the share buybacks are deducted from this reserve.

k)   Taxation - the charge for taxation is based upon the revenue for the year and is allocated according to the marginal basis between revenue and capital using the Company's effective rate of corporation tax for the accounting period.

l)    Deferred taxation - deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the balance sheet date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying temporary differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

m)  The Company can use derivative financial instruments to manage risk associated with foreign currency fluctuations arising on the investments in currencies other than sterling. This is achieved by the use of forward foreign currency contracts. Derivative financial instruments are recognised initially at fair value on the contract date and subsequently remeasured to the fair value at each reporting date. The resulting gain or loss is recognised as revenue or capital in the income statement depending on the nature and motive of each derivative transaction. The fair values of the derivative financial instruments are included within non-current assets or within current assets or current liabilities depending on the nature and motive of each derivative transaction.

2. 

	Year ended 31 January 2015	Year ended 31 January 2014
Returns and net asset value
The return and net asset value per ordinary share are calculated with reference to the following figures:
Revenue return
Revenue return attributable to ordinary shareholders	£4,030,000	£3,910,000
Weighted average number of shares in issue during year	102,868,296	103,917,881
Return per ordinary share	3.92p	3.76p
Capital return
Capital return attributable to ordinary shareholders	£21,704,000	£6,621,000
Weighted average number of shares in issue during year	102,868,296	103,917,881
Return per ordinary share	21.10p	6.37p
Total return
Total return per ordinary share	25.02p	10.13p

There are no dilutive or potentially dilutive shares in issue.

Net asset value per share	As at 31 January 2015	As at 31 January 2014
Net assets attributable to shareholders	£183,951,000	£164,201,000
Number of shares in issue at the year end	103,063,375	104,293,171
Net asset value per share	178.5p	157.4p

Between 1 February and 26 March 2015, 583,970 ordinary shares of 5p were bought back to Treasury.

3. 

	Year ended 31 January 2015 £000	Year ended 31 January 2014 £000
Income from investments
From listed investment
UK equities	690	792
International equities	4,519	4,312
Other income
Interest on deposits	4	4
	5,213	5,108

There were no capital dividends received during the year ended 31 January 2015.  During the year ended 31 January 2014, the Company received a capital dividend of £323,000 from ProSiebenSat. 1 Media.

4. 

	Year ended 31 January 2015			Year ended 31 January 2014
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Dividends
Year ended 31 January 2013 - final dividend of 2.70p	-	-	-	2,801	-	2,801
Year ended 31 January 2014 - first interim dividend of 1.30p	1,345	-	1,345	-	-	-
Year ended 31 January 2015 - first interim dividend of 0.90p (2014:0.90p)	928	-	928	932	-	932
Year ended 31 January 2015 - second interim dividend of 0.90p (2014:0.90p)	915	-	915	928		928
Year ended 31 January 2015 - third interim dividend of 0.90p (2014:0.90p)	930	-	930	939		939
	4,118	-	4,118	5,600	-	5,600

Set out below are the total dividends payable in respect of the financial year which forms the basis on which the requirements of s1158-9 of the Corporation Taxes Act 2010 are considered.

	Year ended 31 January 2015 £000	Year ended 31 January 2014 £000
First interim dividend of 0.90p for the year ended 31 January 2015 (2014: 0.90p)	928	932
Second interim dividend of 0.90p for the year ended 31 January 2015 (2014: 0.90p)	915	928
Third interim dividend of 0.90p for the year ended 31 January 2015 (2014: 0.90p)	930	939
Proposed fourth interim dividend of 1.40p for the year ended 31 January 2015 (2014: 1.30p)	1,443	1,356
	4,216	4,155

5.

Other expenses	Year ended 31 January 2015 £000	Year ended 31 January 2014 £000
Advertising and public relations	48	31
Bank charges (including custody fees)	16	18
Directors' fees	112	128
Directors' and officers' liability insurance	14	15
Irrecoverable VAT	9	11
Legal fees	1	7
Marketing	25	22
Printing and postage	10	26
Registration fees	50	49
Secretarial fee	51	50
Other	45	50
	381	407

Auditors' remuneration
Payable to PricewaterhouseCoopers LLP for the audit of the Company's annual financial statements	22	22
	403	429

Performance Fee

The performance fee for the year ended 31 January 2015 was £nil (2014: £nil).  Details of the management and secretarial agreements are provided in the full annual report.

	Year ended 31 January 2015			Year ended 31 January 2014
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Ongoing charges are calculated with reference to the following figures:
Investment management fee	(290)	(579)	(869)	(279)	(558)	(837)
Other expenses	(403)	-	(403)	(429)	-	(429)
Total expenses	(693)	(579)	(1,272)	(708)	(558)	(1,266)
Average net assets over the year			174,718			168,968
Ongoing charges			0.73%			0.75%

6.

	Year ended 31 January 2015			Year ended 31 January 2014
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Taxation on ordinary activities
Foreign Tax	490	-	490	490	-	490

The effective corporation tax rate was 21.32% (2014: 23.16%). The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK for an investment trust company. The differences are explained below.

	Year ended 31 January 2015 £000	Year ended 31 January 2014 £000
Net return before taxation	26,224	11,021
Corporation tax at effective rate of 21.33% (2014: 23.16%)	5,594	2,552
Effects of:
Non taxable UK dividend income	(147)	(183)
Currency losses not taxable	13	3
Gains on investments not taxable	(4,766)	(1,666)
Overseas dividends non taxable	(964)	(999)
Overseas tax suffered	490	490
Increase in excess management and loan expenses	270	293
Total current year tax charge	490	490

As of 1 April 2013, the UK Corporation rate fell from 23% to 21%.

As at 31 January 2015, the Company had unutilised management expenses of £24.1 million (2014: £22.8 million) and non-trading loan relationship deficit of £4.7 million (2014: £4.7 million) carried forward. A deferred tax asset in respect of this has not been recognised and these expenses will only be utilised if the Company has profits chargeable to corporation tax in the future. Due to the Company's status as an investment trust and the intention to continue to meet the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments

During the year, as a result of the provision in the Finance Act 2013 to reduce the main rate of corporation tax to 20% for the financial year 2015, that was substantively enacted on 2 July 2013 and is effective from 1 April 2015, the unrecognised deferred tax asset has been remeasured to 20%.

7.

Investments at fair value through profit and loss	As at 31 January 2015 £000	As at 31 January 2014 £000
Opening valuation	163,755	158,894
Opening unrealised investment holding gains	(25,304)	(27,398)
Opening cost	138,451	131,496
Purchases at cost	33,337	40,340
Disposal proceeds	(37,639)	(42,349)
Net profit on disposal of investments	8,065	8,964
Disposal at cost	(29,574)	(33,385)
Closing cost	142,214	138,451
Closing unrealised investment holding gains	39,584	25,304
Valuation as at 31 January	181,798	163,755

Gains on investments	As at 31 January 2015 £000	As at 31 January 2014 £000
Net profit on disposal of investments	8,065	8,964
Net gain/(loss) on revaluation of investments	14,280	(2,094)
Capital distributions	-	323
	22,345	7,193

The transaction cost of acquiring investments during the year was £74,000 (2014: £85,000). For disposals, transaction costs were £54,000 (2014: £67,000).

8. 

	As at 31 January 2015 £000	As at 31 January 2014 £000
Debtors
Dividends receivable	159	160
Taxation recoverable	124	106
Other debtors	6	5
	289	271

9.

	As at 31 January 2015 £000	As at 31 January 2014 £000
Cash at bank
Sterling bank account	2,809	421
Non-sterling bank account	4	37
	2,813	458

10.

Creditors	As at 31 January 2015 £000	As at 31 January 2014 £000
Amounts falling due within one year:
Amount due to brokers	648	-
Due to Martin Currie	228	204
Other creditors	73	79
	949	283

With the exception of management and secretarial fees, directors' fee and directors' shareholdings there were no related party transactions through the year, or in the prior year.

11. 

Called up share capital and analysis of capital reserves

Called up share capital	Number of shares	As at 31 January 2015 £000	Number of shares	As at 31 January 2014 £000
Ordinary shares 5p
Ordinary shares in issue at beginning of the year	104,293,171	5,214	104,439,548	5,222
Ordinary shares issued from treasury during the year	1,727,145	87	1,466,623	73
Ordinary shares bought back to treasury during the year	(2,956,941)	(148)	(1,613,000)	(81)
Ordinary shares in issue at end of the year	103,063,375	5,153	104,293,171	5,214

Treasury shares (Ordinary shares 5p)	Number of shares	As at 31 January 2015 £000	Number of shares	As at 31 January 2014 £000
Treasury shares in issue at the beginning of the year	200,000	10	113,623	6
Ordinary shares issued from Treasury during the year	(1,727,145)	(87)	(1,466,623)	(73)
Ordinary shares cancelled from Treasury during the year	-	-	(60,000)	(3)
Ordinary shares bought back to Treasury during the year	2,956,941	148	1,613,000	81
Treasury shares in issue at end of the year	1,429,796	71	200,000	10
Total ordinary shares in issue and in Treasury at the end of the year	104,493,171	5,224	104,493,171	5,224

The net cost of the share issues from and buybacks to treasury for the year to 31 January 2015 was £1,866,000 (2014: shares bought back to treasury £129,000).

The analysis of the capital reserve is as follows:

	Realised capital reserve £000	Unrealised investment holding gains £000	Total capital reserve £000
At 31 January 2014	924	25,304	26,228
Gains on realisation of investments at fair value	8,065	-	8,065
Movement in fair value gains of investments	-	14,280	14,280
Movement in currency losses	(62)	-	(62)
Capitalised expenses	(579)	-	(579)
At 31 January 2015	8,348	39,584	47,932

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'.

12.

	Year ended 31 January 2015 £000	Year ended 31 January 2014 £000
Reconciliation of net return on ordinary activities before taxation to net cash inflow from operating activities
Return on ordinary activities before finance costs and taxation	26,224	11,021
Adjustments for:
Net gains on investments	(22,345)	(7,193)
Effect of foreign exchange rates	62	14
Decrease in dividends receivable, interest accrued and other debtors	-	9
Increase/(decrease) in other creditors and amounts due to Martin Currie	18	(28)
Overseas withholding tax suffered	(508)	(526)
Net cash inflow from operating activities	3,451	3,297

13.

Analysis of changes in net funds	As at 31 January 2014 £000	Cash Flow £000	Exchange Movement £000	As at 31 2015 January £000
Cash at bank and in hand	458	2,417	(62)	2,813

Analysis of changes in net funds	As at 31 January 2013 £000	Cash Flow £000	Exchange Movement £000	As at 31 January 2014 £000
Cash at bank and in hand	63	409	(14)	458

14. Related Party Transactions

With the exception of the management and secretarial fees, directors' fees and directors' shareholdings, there have been no related party transactions during the year, or in the prior year.

15.  Derivatives and other financial instruments

The Company's financial instruments comprise securities and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income.

The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts, futures and options, for the purpose of managing currency and market risks arising from the Company's activities.

The main risks the Company faces from its financial instruments are (i) market price risk (comprising interest rate risk, currency risk and other price risk), (ii) liquidity risk and (iii) credit risk.

The Board regularly reviews and agrees policies for managing each of these risks. The investment manager's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors, other than for currency disclosures.

(i) Market price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.

Interest rate risk

Interest rate movements may affect:

·      the fair value of the investments in fixed interest rate securities; and

·      the level of income receivable on cash deposits.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings may comprise fixed rate, revolving, and uncommitted facilities. Current guidelines state that the total borrowings will not exceed 20% of the total assets of the Company. The Company does not currently have any gearing.

Interest risk profile

The interest rate risk profile of the portfolio of financial assets (comprising cash balances only) at the balance sheet date was as follows:

At 31 January 2015	Rate %	Local currency '000	Foreign Exchange Rate	Sterling equivalent £000
Assets:
Sterling	0.25	2,809	1.000	2,809
US dollar	0.01	6	1.502	4
				2,813
At 31 January 2014	Rate %	Local currency '000	Foreign Exchange Rate	Sterling equivalent £000
Assets:
Sterling	-	421	1.000	421
US dollar	-	61	1.643	37
				458

Interest rate sensitivity

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the balance sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Company's profit for the year ended 31 January 2015 would increase/decrease by £14,000 (2014: increase/decrease by £2,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.

As at 31 January 2015 a decrease in interest rates of 0.5% is the maximum possible, given the prevailing base rate of 0.5%. This level is considered possible based on observations of market conditions and historic trends.

Foreign currency risk

A significant proportion of the Company's investment portfolio is invested in overseas securities and the balance sheet can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings.

The revenue account is subject to currency fluctuation arising on overseas income.

Foreign currency risk exposure by currency of denomination:

	As at 31 January 2015
	Non - monetary exposure £000	Monetary exposure £000	Total currency exposure £000
US dollar	101,010	158	101,168
Euro	18,879	25	18,904
Japanese yen	11,235	-	11,235
Swiss franc	6,411	72	6,483
Singapore dollar	5,600	-	5,600
Norwegian krone	2,559	-	2,559
Hong Kong dollar	5,856		5,856
Canadian dollar	2,519	24	2,543
Australian dollar	2,226	-	2,226
Indonesian rupiah	2,059	-	2,059
Total overseas investments	158,354	279	158,633
Sterling	23,444	1,874	25,318
Total	181,798	2,153	183,951

	As at 31 January 2014
	Non - monetary exposure £000	Monetary exposure £000	Total currency exposure £000
US dollar	91,301	161	91,462
Euro	14,608	65	14,673
Japanese yen	11,053	-	11,053
Swiss franc	5,949	36	5,985
Singapore dollar	4,683	-	4,683
Norwegian krone	4,462	-	4,462
Hong Kong dollar	4,191	-	4,191
Canadian dollar	2,969	28	2,997
Australian dollar	2,394	-	2,394
Indonesian rupiah	1,567	(1)	1,566
Total overseas investments	143,177	289	143,466
Sterling	20,578	157	20,735
Total	163,755	446	164,201

The asset allocation between specific markets can vary from time to time based on the manager's opinion of the attractiveness of the individual markets.

Foreign currency sensitivity

There were minimal foreign currency denominated items at the year end.

Other price risk

Other price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets, and the stock selection process both act to reduce market risk. The manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.

Other price risk sensitivity

If market prices at the balance sheet date had been 15% higher or lower while all other variables remained constant, the return attributable to ordinary shareholders at the year ended 31 January 2015 would have increased/decreased by £27,270,000 (2014: increase/decrease of £24,563,000) and equity reserves would have increased/decreased by the same amount. This level of change is considered to be reasonably possible based on observation of market conditions and historic trends.

(ii) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary.

(iii) Credit risk

This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

The risk is managed as follows:

·      investment transactions are carried out with a large number of brokers, whose credit rating is reviewed periodically by the portfolio manager, and limits are set on the amount that may be due from any one broker; and

·      cash is held only with reputable banks with high quality external credit ratings.

None of the Company's financial assets are secured by collateral.

Fair values of financial assets and financial liabilities

All financial assets and liabilities of the Company are included in the balance sheet at fair value or a reasonable approximation of fair value with no material difference in the carrying amount.

16.   Capital management policies and procedures

The Company's capital management objectives are:

·      to ensure that the Company will be able to continue as a going concern;

·      to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt; and

·      to limit gearing to 20% of total assets.

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the manager's views on the market and the extent to which revenue in excess of that which is required to be distributed under the investment trust rules should be retained.

The analysis of shareholders' funds is as follows:

	As at 31 January 2015 £000	As at 31 January 2014 £000
Called up ordinary share capital	5,224	5,224
Capital redemption reserve	10,793	10,793
Special distributable reserve	114,383	116,249
Capital reserve	47,932	26,228
Revenue reserve	5,619	5,707
Total shareholders' funds	183,951	164,201

17.  Fair value hierarchy

Under FRS 29 'Financial Instruments: Disclosures' an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

·      Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

·      Level 2: 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); and

·      Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

As at 31 January 2015 financial assets in the form of quoted equities held at fair value through profit or loss to the value of £181,798,000 were classified as Level 1 in the fair value hierachy (31 January 2014: quoted equities to the value of £163,755,000 classified as Level 1) with no assets classified as Level 2 or 3 (31 January 2014: no assets classified as Level 2 or 3).

Quoted equities

The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.

18.  Post balance sheet events

 

Since the year end a further 583,970 shares of 5p each have been bought back to treasury for a consideration of £1,054,000.

From 1 April 2014 the main rate of corporation tax reduced from 23% to 21%. Furthermore the main rate of corporation tax will reduce from 21% to 20% from 1 April 2015. There is no impact on the financial statements following this change in rate of corporation tax.

Website

The Company has its own dedicated website at www.martincurrieglobal.com.  This offers shareholders, prospective investors and their advisors a wealth of information about the Company.  Updated daily it includes the following: daily prices, monthly update, performance data, research, portfolio information, press releases and articles, the manager's latest views and annual and half yearly reports.

 

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