Annual Financial Report

RNS Number : 0237K

Schroder AsiaPacific Fund PLC

11 December 2018

 

11 December 2018

ANNUAL REPORT AND ACCOUNTS

Schroder AsiaPacific Fund plc (the "Company") hereby submits its Annual Report for the year ended 30 September 2018 as required by the UK Listing Authority's Disclosure Guidance and Transparency Rule 4.1. 

The Company's Annual Report and Accounts for the year ended 30 September 2018 are also being published in hard copy format and an electronic copy will shortly be available to download from the Company's website http://www.schroders.co.uk/asiapacific.  Please click on the following link to view the document:

http://www.rns-pdf.londonstockexchange.com/rns/0237K_1-2018-12-10.pdf

The Company has submitted its Annual Report and Accounts to the National Storage Mechanism and it will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

Enquiries:

Benjamin Hanley

Schroder Investment Management Limited                      

Tel: [phone]

Chairman's Statement

Performance

During the year to 30 September 2018, the Company retained the gains made in the two prior exceptional years, despite difficult market conditions generally. The NAV produced a positive total return of 4.2%, very slightly trailing the Benchmark. The Company's share price also produced a positive total return of 2.2%, which maintains the Company's excellent record over the longer term.

A more detailed comment on performance and investment policy may be found in the Manager's Review.

Final dividend

The directors recommend the payment of a final dividend of 9.50 pence per share for the year ended 30 September 2018, an increase of 69.6% over the 5.60 pence paid in respect of the previous financial year. Net revenue after taxation has increased by 77.0% from £9,537,000 to £16,885,000, partly due to the increase in investment income receivable of £1,238,000. The remaining increase of £6,110,000 was due to a change in basis of accounting whereby 75% of indirect costs are allocated to capital. In line with the Company's policy of distributing substantially all its revenue after tax, the dividend proposed is significantly higher than in the prior year. It is anticipated any future increases in dividends will progress at a similar rate to previous years. If the resolution proposed at the Annual General Meeting ("AGM") to pay a final dividend is passed, it will be paid on 31 January 2019 to shareholders on the register on 28 December 2018.

Gearing

During the year, gearing has remained relatively modest, starting at 4.4% at the commencement of the year and closing at 2.6%. This level is within pre-agreed limits so that net effective gearing cannot represent more than 20% of shareholders' funds.

Discount management

The board continues to follow a flexible strategy towards discount management. The average level of discount during the year under review was 11%. We view 10% as a maximum discount target over the longer term but believe also that it is not necessarily in the best interests of shareholders as a whole to adopt a rigid discount control mechanism that seeks to target a defined maximum discount level regardless of market conditions.

We did not buy back any shares during the year under review but we regularly reviewed both the discount level and the possible use of buy backs. Our policy takes account of the level of discount at which the Company's peer group trades, prevailing market conditions and activity within our sector.

At the Company's last AGM, the Company was given the authority to purchase up to 14.99% of its issued share capital. We propose that share buyback authorities be renewed at the forthcoming AGM and that any shares so purchased be cancelled or held in treasury for potential reissue.

Board succession

During the past year, Martin Porter joined the board and Anthony Fenn retired at the last AGM. In line with the board's agreed succession plans, I will be retiring at the AGM in January 2021. The nomination committee will shortly be searching for a new board member. The board believes that it is important for appropriate new skills to be brought to the board and will look to refresh one director every two to three years. A director will serve for a period of more than nine years only in exceptional circumstances. All directors will be subject to re-election each year at the AGM.

Outlook

The Company's year-end coincided with the 10-year anniversary of the 2008 worldwide market shakeout. Now there are new challenges to growth, notably tariff wars and higher Western interest rates. Equity markets have been very volatile since the year end but it is worth remembering that the Company's share price is four times the level of 10 years ago. Asia, and your Company, has been a major beneficiary of the new world order after 2008-09. Can this continue?

The Manager's Review discusses some of the new issues facing Asia, of which probably the most fundamental is whether China can transition to a lower growth model at a time it is under political and economic pressure from its largest trading partner, the US. China, and the region as a whole, has a great record of achieving its goals and the next few years will test that record. I am conscious too that, at the moment, the state authorities are increasing their involvement with the commercial operating environment, potentially affecting the profitability of leading private sector companies.

I remain optimistic that the region's underlying strengths will turn into further success for the Company. Ultimately, it is the companies in which we invest that need to succeed, and I take comfort from how many of them have become dominant regional and global presences in the last decade.

AGM

The AGM will be held on Wednesday, 23 January 2019 at 12.00 noon. As in previous years, Matthew Dobbs, on behalf of the Manager, will give a presentation on the prospects for Asia and the Company's investment strategy. The Company changed its registered address earlier this year to 1 London Wall Place, London EC2Y 5AU and I hope you will all attend.

Nicholas Smith

Chairman

10 December 2018

Manager's Review

The NAV per share of the Company recorded a total return of 4.2% over the 12 months to end September 2018. This was broadly in line with the performance of the Benchmark, which was up 4.4% over the same period.

Echoing the Chinese curse, it has been an interesting time in Asian markets over the year. Modest overall progress in both sterling and local currency terms for the Benchmark disguised considerable volatility over the period, not least in the value of sterling. A recovery in the pound on Brexit optimism in late 2017 largely cancelled out local currency strength in regional markets; conversely in the second half of the fiscal year sterling's retracement masked significant weakness in underlying indices in 2018.

The reasons for the second half weakness will be familiar to many shareholders. Foremost was the rapid deterioration in Sino-US relations, with initial assumptions that this represented a mere trade dispute giving way to realisation of much more fundamental differences. Rising US interest rates, a stronger dollar and tightening credit conditions also contributed to downbeat sentiment across the whole region, allied to signs of economic slowdown in developed markets outside the US, emerging market volatility (Turkey, Argentina), and fading momentum in global trade.

The slowing of economic activity in China was a particular focus. To an extent, this is the result of a deliberate policy on the part of the Beijing authorities to rein in credit growth and instil greater investment discipline, partly through a shift towards the private sector and away from government-led infrastructure spending. However, a more hostile global environment has injected an unwelcome degree of uncertainty surrounding a soft landing in the region's most important economy.

Unsurprisingly, amongst the major regional markets, China has underperformed, while other North Asian markets such as Hong Kong and Korea clustered near the average. Emerging ASEAN (Association of South East Asian Nations) markets have been among the more striking outliers. Both the Philippines and Indonesia experienced considerable currency weakness. In Indonesia's case, the chronic current account deficit and heavy selling of bonds by overseas investors were the key factors, while weakness in the Philippine peso and stock market reflected an over-heating economy and insufficient policy tightening from the central bank, the BSP. In contrast, investors welcomed the return of Mahathir Mohammed (aged 93) as prime minister of Malaysia, ending over 60 years of UMNO-led coalition government. Thailand benefited from a strong energy sector and its defensive nature given a sizeable current account surplus. Similarly, solid external finances and attractive dividend yields supported Taiwan.

Performance and portfolio activity

As discussed above, it was a mixed year for the Company's relative performance. After a solid first half, there was a reversal in the summer as quality growth stocks sold off, including in the China "A" share market where tight liquidity and US grandstanding undermined investor confidence. For the year as a whole stock selection was positive in Hong Kong, China and Taiwan, offset by shortfalls in India and Thailand. The Australian exposure was helpful, as was the underweighting in China, the Philippines and India.

In terms of portfolio positioning, the Company remained underweight China, exposure to which was reduced over the year. Hong Kong has remained a significant overweight, and we moved to an overweight stance in Korea. Key underweights include Taiwan and most of the ASEAN markets apart from Thailand. Key sector overweights include consumer discretionary, information technology and real estate, offset by underweights in consumer staples and telecoms.

Outlook and Policy

Arguably all purely financial forecasts and considerations are trumped (pardon the pun) by major, and by their nature unpredictable, political considerations. The most significant is the breakdown in relations between the US and China, which goes far beyond mere trade considerations. However, other imponderables include whether Italy will ever have the political will to do what it takes to create a competitive economy, Brexit, and (in our mind of very fundamental global import) whether the Chinese leadership hold the line accepting lower trend growth as the price for long-term financial sustainability.

Some or all of these issues may be amenable to at least short-term outcomes that are better than the consensus would suggest. However, the global economic and financial fundamentals are troubling, namely, an unbalanced growth picture (US vs the rest), tightening liquidity, and the rising risk of more systemic financial shocks resulting from mis-priced risk eg. loan funds, peer-to-peer lending, ETFs, remarkably low spreads in the high yield market, and multi-layered "risk free" infrastructure funds.

A stronger dollar, rising interest rates, trade tariff pressure from the biggest bilateral trade partner, and related faltering in investor and corporate confidence are not a great combination for the relatively trade-dependent and open economies of Asia. In general, the vulnerability to external financial shocks are lower across the region, certainly when compared with the 1997/98 crisis, and also with 2013 as markets became frightened by the prospect of the end of Western monetary easing.

We have made few changes to the portfolio's positioning based on pure tariff considerations, not least because we have never been keen on low margin labour cost arbitrage business models which will be most disrupted by tariffs. Our focus has, and will remain upon, value-added players in what are complex supply chains that are unlikely to be easily substitutable, particularly in the US where labour constraints and skills shortages are becoming increasingly apparent.

Of greater concern are the prospects or otherwise for a smooth transition to a lower, but more sustainable, growth model for China. Our central view remains that the authorities can manage a soft landing consistent with their desire for a less credit-intensive growth model. Attacks from Washington are certainly not making the process any easier. However, it is also being made more complicated by less favourable country-specific factors including marked erosion in the current account surplus, elevated levels of domestic credit, and increasing vulnerability to capital leaving the country. Combinations of expanding the money supply, a modest rise in government spending and a gradual depreciation of the Renminbi accompanied by discouragement of capital outflows may still do the trick, but in our opinion scope for a more marked stimulus package looks limited.

Having said all that, regional markets are within a few per cent of the valuation lows seen in late 2015/early 2016, suggesting that investor caution is already elevated. A destabilising event in China remains a possibility rather than an imminent likelihood, and some progress on US/China relations is not out of the question. Consequently, the Company remains very modestly geared, and we also take comfort from the fact that, at least across the companies held in the portfolio, we consider that cash flows are robust and balance sheets generally in good shape.

Schroder Investment Management Limited

10 December 2018

Principal risks and uncertainties

The board is responsible for the Company's system of risk management and internal control and for reviewing its effectiveness. The board has adopted a detailed matrix of principal risks affecting the Company's business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing basis. This system assists the board in determining the nature and extent of the risks it is willing to take in achieving the Company's strategic objectives. Both the principal risks and the monitoring system are also subject to robust review at least annually. The last review took place in November 2018.

Although the board believes that it has a robust framework of internal controls in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.

The principal risks and uncertainties faced by the Company have remained unchanged throughout the year under review. Cyber risk relating to all of the Company's key service providers is considered an ongoing threat in light of the rising propensity and impact of cyber attacks on businesses and institutions. To address the risk, the board receives reporting on cyber risk mitigation and management from its key service providers to ensure that it is managed and mitigated appropriately.

Actions taken by the board and, where appropriate, its committees, to manage and mitigate the Company's principal risks and uncertainties are set out in the table below.

Risk	Mitigation and management
Strategic The Company's investment objectives may become out of line with the requirements of investors, resulting in a wide discount of the share price to underlying NAV per share.	The appropriateness of the Company's investment remit is periodically reviewed and the success of the Company in meeting its stated objectives is monitored. The share price relative to NAV per share is monitored and the use of buy back authorities is considered on a regular basis. Marketing and distribution activity is actively reviewed. Proactive engagement with investors.
The Company's cost base could become uncompetitive, particularly in light of open ended alternatives.	The ongoing competitiveness of all service provider fees is subject to periodic benchmarking against their competitors. Annual consideration of management fee levels is undertaken.
Investment management The Manager's investment strategy, if inappropriate, may result in the Company underperforming the market and/or peer group companies, leading to the Company and its objectives becoming unattractive to investors.	Review of: the Manager's compliance with its agreed investment restrictions, investment performance and risk against investment objectives and strategy; relative performance; the portfolio's risk profile; and whether appropriate strategies are employed to mitigate any negative impact of substantial changes in markets. Annual review of the ongoing suitability of the Manager. Regular meetings with major shareholders to seek their views with respect to company matters, including the five-yearly continuation vote.
Financial and currency The Company is exposed to the effect of market fluctuations due to the nature of its business. A significant fall in regional equity markets or a substantial currency fluctuation could have an adverse impact on the market value of the Company's investments.	The risk profile of the portfolio is considered and appropriate strategies to mitigate any negative impact of substantial changes in markets or currency are discussed with the Manager. The Company has no formal policy of hedging currency risk but may use foreign currency borrowings or forward foreign currency contracts to limit exposure.
Custody Safe custody of the Company's assets may be compromised through control failures by the depositary, including cyber hacking.	The depositary reports on the safe custody of the Company's assets, including cash and portfolio holdings which are independently reconciled with the Manager's records. Review of audited internal controls reports covering custodial arrangements is undertaken. An annual report from the depositary on its activities, including matters arising from custody operations is received.
Gearing and leverage The Company utilises credit facilities. These arrangements increase the funds available for investment through borrowing. While this has the potential to enhance investment returns in rising markets, in falling markets the impact could be detrimental to performance.	Gearing is monitored and strict restrictions on borrowings are imposed: gearing continues to operate within pre-agreed limits so as not to exceed 20% of shareholders' funds.
Accounting, legal and regulatory In order to continue to qualify as an investment trust, the Company must comply with the requirements of Section 1158 of the Corporation Tax Act 2010. Breaches of the UK Listing Rules, the Companies Act or other regulations with which the Company is required to comply, could lead to a number of detrimental outcomes.	Confirmation of compliance with relevant laws and regulations by key service providers is reviewed. Shareholder documents and announcements, including the Company's published Annual Report, are subject to stringent review processes. Procedures are established to safeguard against the disclosure of inside information.
Service provider The Company has no employees and has delegated certain functions to a number of service providers. Failure of controls, including as a result of cyber hacking, and poor performance of any service provider, could lead to disruption, reputational damage or loss.	Service providers are appointed subject to due diligence processes and with clearly-documented contractual arrangements detailing service expectations. Regular reports are provided by key service providers and the quality of their services is monitored. Review of annual audited internal controls reports from key service providers, including confirmation of business continuity arrangements and IT controls is undertaken.

Risk assessment and internal controls

Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company's performance or condition. No significant control failings or weaknesses were identified from the Audit and Risk Committee's ongoing risk assessment which has been in place throughout the financial year and up to the date of this Report.

A full analysis of the financial risks facing the Company is set out in note 19 on pages 42 to 47 of the 2018 Annual Report.

Viability statement

The directors have assessed the viability of the Company over a five year period, taking into account the Company's position at 30 September 2018 and the potential impacts of the principal risks and uncertainties it faces for the review period.

This period has been chosen as the board believes that this reflects a suitable time horizon for strategic planning, taking into account the investment policy, liquidity of investments, potential impact of economic cycles, nature of operating costs, dividends and availability of funding.

In its assessment of the viability of the Company, the directors have considered each of the Company's principal risks and uncertainties detailed on pages 12 and 13 of the 2018 Annual Report and in particular the impact of a significant fall in regional equity markets on the value of the Company's investment portfolio.  The directors have also considered the Company's income and expenditure projections and the fact that the Company's investments comprise readily realisable securities which can be sold to meet funding requirements if necessary and on that basis consider that five years is an appropriate time period.

Based on the Company's processes for monitoring operating costs, the board's view that the Manager has the appropriate depth and quality of resource to achieve superior returns in the longer term, the portfolio risk profile, limits imposed on gearing, counterparty exposure, liquidity risk and financial controls, the directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of their assessment.

Going concern

Having assessed the principal risks and the other matters discussed in connection with the viability statement set out above, and the "Guidance on Risk Management, Internal Control and Related Financial and Business Reporting" published by the Financial Reporting Council in 2014, the directors consider it appropriate to adopt the going concern basis in preparing the accounts.

Statement of Directors' Responsibilities in respect of the Annual Report and Accounts

The directors are responsible for preparing the annual 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, comprising Financial Reporting Standard (FRS) 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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 return or loss of the Company for that period. In preparing these financial statements, the directors are required to:

-        select suitable accounting policies and then apply them consistently;

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

-        state whether applicable UK Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

-        notify the Company's shareholders in writing about the use of disclosure exemptions in FRS 102, used in the preparation of the financial statements; and

-        prepare the financial statements on a 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 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 Manager is responsible for the maintenance and integrity of the webpage dedicated to the Company. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the directors, whose names and functions are listed on pages 15 and 16, confirm that to the best of their knowledge:

-        the financial statements, which have been prepared in accordance with 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 net return of the Company;

-        the Strategic Report contained in the report and accounts includes a fair 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; and

-        the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Income Statement

for the year ended 30 September 2018

		2018			2017
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	-	26,589	26,589	-	139,076	139,076
Net foreign currency (losses)/gains	-	(2,644)	(2,644)	-	1,714	1,714
Income from investments	21,092	293	21,385	18,464	86	18,550
Other interest receivable and similar income	42	-	42	15	-	15
Gross return	21,134	24,238	45,372	18,479	140,876	159,355
Investment management fee	(1,748)	(5,243)	(6,991)	(6,320)	-	(6,320)
Administrative expenses	(1,022)	-	(1,022)	(878)	-	(878)
Net return before finance costs and taxation	18,364	18,995	37,359	11,281	140,876	152,157
Finance costs	(289)	(867)	(1,156)	(545)	-	(545)
Net return on ordinary activities before taxation	18,075	18,128	36,203	10,736	140,876	151,612
Taxation on ordinary activities	(1,190)	(529)	(1,719)	(1,199)	(11)	(1,210)
Net return on ordinary activities after taxation	16,885	17,599	34,484	9,537	140,865	150,402
Return per share	10.08p	10.50p	20.58p	5.69p	84.06p	89.75p

The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return on ordinary activities after taxation is also the total comprehensive income for the year.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

Statement of Changes in Equity

for the year ended 30 September 2018

	Called-up share capital £'000	Share premium £'000	Capital redemption reserve £'000	Warrant exercise reserve £'000	Share purchase reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
At 30 September 2016	16,780	100,956	3,364	8,704	32,396	487,957	8,164	658,321
Repurchase and cancellation of
the Company's own shares	(23)	-	23	-	(821)	-	-	(821)
Net return on ordinary activities	-	-	-	-	-	140,865	9,537	150,402
Dividend paid in the year	-	-	-	-	-	-	(7,960)	(7,960)
At 30 September 2017	16,757	100,956	3,387	8,704	31,575	628,822	9,741	799,942
Net return on ordinary activities	-	-	-	-	-	17,599	16,885	34,484
Dividend paid in the year	-	-	-	-	-	-	(9,384)	(9,384)
At 30 September 2018	16,757	100,956	3,387	8,704	31,575	646,421	17,242	825,042

Statement of Financial Position

at 30 September 2018

	2018 £'000	2017 £'000
Fixed assets
Investments held at fair value through profit or loss	851,031	836,358
Current assets
Debtors	2,128	1,009
Cash at bank and in hand	20,439	7,213
	22,567	8,222
Current liabilities
Creditors: amounts falling due within one year	(48,556)	(44,638)
Net current liabilities	(25,989)	(36,416)
Total assets less current liabilities	825,042	799,942
Net assets	825,042	799,942
Capital and reserves
Called-up share capital	16,757	16,757
Share premium	100,956	100,956
Capital redemption reserve	3,387	3,387
Warrant exercise reserve	8,704	8,704
Share purchase reserve	31,575	31,575
Capital reserves	646,421	628,822
Revenue reserve	17,242	9,741
Total equity shareholders' funds	825,042	799,942
Net asset value per share	492.35p	477.38p

These accounts were approved and authorised for issue by the board of directors on 10 December 2018 and signed on its behalf by:

Nicholas Smith

Chairman

Notes to the Accounts

1.       Accounting policies

Basis of accounting

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP"), in particular in accordance with Financial Reporting Standard (FRS) 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by the Association of Investment Companies in November 2014 and updated in February 2018. All of the Company's operations are of a continuing nature.

The Company has not presented a statement of cash flows as it is not required for an investment trust which meets certain conditions.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments held at fair value through profit or loss.

The accounts are presented in sterling and amounts have been rounded to the nearest thousand.

The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 30 September 2017.

No significant judgements, estimates or assumptions have been required in the preparation of the accounts for the current or preceding financial years.

2.       Taxation on ordinary activities

Analysis of tax charge for the year

		2018			2017
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Overseas withholding tax	1,492	-	1,492	1,199	-	1,199
Overseas capital gains tax	-	529	529	-	11	11
Taiwanese withholding tax recovered	(302)	-	(302)	-	-	-
Taxation on ordinary activities	1,190	529	1,719	1,199	11	1,210

The Company has no corporation tax liability for the year ended 30 September 2018 (2017: nil).

3.       Dividends

Dividends paid and proposed

	2018	2017
	£'000	£'000
2017 final dividend of 5.60p (2016: 4.75p) paid out of revenue profits	9,384	7,960

	2018	2017
	£'000	£'000
2018 final dividend proposed of 9.50p (2017: 5.60p) to be paid out of revenue profits	15,919	9,384

The proposed final dividend amounting to £15,919,000 (2017: £9,384,000) is the amount used for the basis of determining whether the Company has satisfied the distribution requirements of section 1158 of the Corporation Tax Act 2010. The revenue available for distribution for the year is £16,885,000 (2017: £9,537,000).

4.       Return per share

	2018	2017
	£'000	£'000
Revenue return	16,885	9,537
Capital return	17,599	140,865
Total return	34,484	150,402
Weighted average number of shares in issue during the year	167,570,716	167,581,798
Revenue return per share	10.08p	5.69p
Capital return per share	10.50p	84.06p
Total return per share	20.58p	89.75p

5.       Called-up share capital

	2018	2017
	£'000	£'000
Ordinary shares of 10p each allotted, called up and fully paid:
Opening balance of 167,570,716 (2017: 167,795,716) shares	16,757	16,780
Repurchase and cancellation of nil (2017: 225,000) shares	-	(23)
Closing balance of 167,570,716 (2017: 167,570,716) shares	16,757	16,757

6.       Net asset value per share

	2018	2017
	£'000	£'000
Net assets attributable to shareholders (£'000)	825,042	799,942
Shares in issue at the year end	167,570,716	167,570,716
Net asset value per share	492.35p	477.38p

7.       Disclosures regarding financial instruments measured at fair value

The Company's financial instruments within the scope of FRS 102 that are held at fair value comprise its investment portfolio. The Company has held derivative financial instruments during the year, but none were held at the year end.

FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.

Level 1 - valued using unadjusted quoted prices in active markets for identical assets.

Level 2 - valued using observable inputs other than quoted prices included within Level 1.

Level 3 - valued using inputs that are unobservable.

Details of the valuation techniques used by the Company are given in note 1(b) on page 35 of the 2018 Annual Report.

At 30 September 2018, the Company's investments were all categorised in Level 1 (2017: same).

8.         Status of announcement

2017 Financial Information

The figures and financial information for 2017 are extracted from the published Annual Report and Accounts for the year ended 30 September 2017 and do not constitute the statutory accounts for that year. The 2017 Annual Report and Accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2018 Financial Information

The figures and financial information for 2018 are extracted from the Annual Report and Accounts for the year ended 30 September 2018 and do not constitute the statutory accounts for the year. The 2018 Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The 2018 Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

Neither the contents of the Company's webpages nor the contents of any website accessible from hyperlinks on the Company's webpages (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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