Annual Financial Report

RNS Number : 0495G

Schroder Income Growth Fund PLC

17 November 2015

 



17 November 2015

ANNUAL REPORT AND ACCOUNTS

Schroder Income Growth Fund plc (the "Company") hereby submits its annual financial report for the year ended 31 August 2015 as required by the UK Listing Authority's Disclosure and Transparency Rule 4.1. 

The Company's Annual Report and Accounts for the year ended 31 August 2015 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.schroderincomegrowthfund.com. Please click on the following link to view the document:

The Company has submitted its Annual Report and Accounts to the National Storage Mechanism and it will shortly be available for inspection at www.hemscott.com/nsm.do.

Enquiries:

Louise Richard

Schroder Investment Management Limited                 Tel: [phone]

Schroder Income Growth Fund plc

Chairman's Statement

Revenue return for the year and dividends

During the year ended 31 August 2015, the revenue return per share increased by 4.4%, with steady increases in dividend income assisted by the increased borrowings introduced in July 2014 but partially offset by higher expenses and interest costs.

The Board has declared total dividends of 10.30 pence per share for the year ended 31 August 2015, an increase of 2.0% over the 10.10 pence per share declared in respect of the year ended 31 August 2014. This compares to a rise of only 0.1% for the Consumer Prices Index over the period and continues to build on one of the Company's primary objectives: to provide real growth of income, being growth of

income in excess of the rate of inflation. This distribution also enabled £685,000 to be added to the revenue reserve, thereby increasing it to £4.3 million (6.2 pence per share) after allowing for payment of the fourth interim dividend for the year ended 31 August 2015.

Performance

During the year under review, the net asset value produced a total return of 3.1%, comparing favourably to a total return of -2.3% for the FTSE All-Share Index and continuing to build on the Company's longer-term outperformance of the FTSE All-Share Index. The share price total return for the year was 5.1%.

Share price discount

The discount of the Company's share price to net asset value narrowed during the period from 3.1% at the start of the year to 1.5% on 31 August 2015, with an average over the year of 3.7%.

Detailed commentary on the performance of your Company's assets may be found in the Manager's Review on pages 6 and 7 of the 2015 Annual Report.

Gearing

During the year under review, the Company renewed the revolving £10 million credit facility with Scotiabank Europe Plc, which is in addition to the £20 million three-year term loan entered into with the same lender in 2014.

Gearing stood at 9.6% at the beginning of the year and had decreased marginally to 9.5% at 31 August 2015. The level of gearing continues to be monitored closely by the Board and will not exceed 25% of shareholders' funds.

Share issuance and buy back authorities

While the Board continued to monitor the share price relative to net asset value during the year, no shares were bought back or issued during the period. However, the Board believes that the authority to issue and buy back shares remains a valuable potential tool both to enhance shareholder value and to reduce the volatility of the share price relative to net asset value and will therefore be seeking to renew the existing relevant authorities and appropriate resolutions are therefore included in the Notice of the Annual General Meeting.

Board composition and succession planning

Your Board has considered its composition, balance and diversity. In view of the length of service of a number of its members, it has agreed plans for refreshment so that at least one of the longer serving Directors will retire at each of the Annual General Meetings to be held in 2016 and 2017, with a view to appointing new Directors thereafter to maintain the number of Board members at five.

Continuation vote

In accordance with the provisions of the Company's Articles of Association, a resolution for the continuation of the Company as an investment trust for a further five year period is included in the Notice of the Annual General Meeting.

Your Board has reviewed the Company's current position, taking into account the following factors: its structure as an investment vehicle, its performance over recent years; its investment remit and long-term investment objectives; its market rating; and the depth of management and resource provided by the Manager.

The Company's long-term performance record remains strong and the Board believes

that its investment objectives remain an attractive proposition for investors, that the Manager is well placed to deliver superior returns over the longer term and that the structure as an investment vehicle remains beneficial to shareholders.

As a result, the Board recommends that the Company should continue as an investment trust for a further five year period. The Directors will be voting their shares accordingly and wish to encourage all other shareholders likewise to vote in favour of the Company's continuation.

Annual General Meeting

The Company's Annual General Meeting will be held at 2.30 p.m. on Tuesday, 15 December 2015. As in previous years, the meeting will include a presentation by the Manager on the Company's investment strategy and market prospects.

20 years of dividend increases

While it is always satisfying to announce another year of increased dividends, it is particularly so this time. Your Company was launched in 1995, and it can now proudly report having increased its dividend every year since then. The dividend's growth of 4.6% per annum has been more than the rate of inflation, while £1,000 invested in the Company at the start would, if all the dividends had been reinvested, have had a value of £6,211 on 31 August 2015.

Pleasing as it has been to see our Manager's ability to find the opportunities to achieve this, with the Company outperforming the FTSE All-Share Index over those 20 years, it has ultimately been the strength of the UK corporate sector that has provided the dividend growth and underpinned the rise in the stock market. Much market commentary at the moment is stressing the challenges facing UK companies, and the Manager's Review discusses the shorter term issues. It is traditional - and proper -

that a Chairman should stress the undeniable risks and uncertainties. At the same time, however, I would emphasise the optimism with which your Board looks forward to the future. We believe that the investment logic behind the Company's original launch - the virtue of targeting real growth in income - is still valid, and one that can play an important role in the portfolios of long-term, lower-risk investors.

Mr Ian Barby

Chairman

16 November 2015

Manager's Review

The Company's net asset value total return in the 12 months to 31 August 2015 was 3.1%, compared to a total return of -2.3% for the FTSE All-Share Index over the same period.

Review of the Year

While UK investors have faced a series of unexpected news, both negative and positive, over the last 12 months, the stock market has ended the period close to where it started.

The period began with volatility as investors worried about tighter monetary policy in the US, uncertainty in Europe (particularly around Greece), and weaker emerging markets' growth. However, encouraging US macro-economic data and quantitative easing by the European Central Bank subsequently drove an equity market recovery. UK domestically-orientated companies benefited from the Conservative party

unexpectedly securing a majority in the general election in May, whilst the outlook for UK consumers improved as real wages returned to growth, unemployment fell and inflation moderated in line with lower oil prices.

Volatility returned towards the period end, however, amid a breakdown in Greece's bailout negotiations, while China's decision to devalue its currency in August reawakened questions not just about its own economic health but emerging markets growth in general.

Performance

The net result of the above was a small decline by the FTSE All-Share Index, while the Company's net asset value produced a total return of 3.1%. The contributions to the outperformance were spread across a range of sectors, including stock selection within consumer goods shares such as house builders (eg Taylor Wimpey and Bellway) and tobacco companies (Imperial Tobacco). There were also good

contributions from the holdings in Friends Life (taken over by Aviva), Synthomer (where new management is improving the Asian business and focusing on shareholder returns), and Microfocus (an IT software company which made a transformational takeover of a US company).

The companies that were avoided, by a large degree, were any involved with commodities. Rio Tinto was one of the portfolio's worst performers, but overall the Company benefited relative to the index by being underweight in commodity companies and from its stock choice within mining (eg selling Glencore in January and not owning Anglo American).

The Company's borrowing facilities were used to keep gearing around 8-10% through the year, which was mildly beneficial to performance. It also had an impact on dividend income, with a full year of the enlarged portfolio helping to augment what was a relatively modest rise in dividends from most UK companies, and the continued absence of any contribution from writing call options on the holdings due to the relatively low premiums. In aggregate investment income rose 7.2%.

Portfolio Changes

Within financials we bought a new holding in Nordea Bank, funded from a reduction in the position in Swedbank. We bought a position in Lloyds Banking Group towards the end of the period, due to its potential for paying attractive and growing dividends. We increased the holding in Centrica mid-way through the year as we became attracted to the turnaround under new management and the valuation of its shares.

We switched out of Total and Statoil, reinvesting some of the proceeds into Royal Dutch Shell, and switched the Glencore holding into Rio Tinto where the balance sheet is sufficiently strong to protect its dividend payment. A new holding was started in infrastructure company John Laing Group at its initial public offering, funded by selling out of the holding in wholesaler/retailer Inchcape which had performed well.

In all cases we continue to look for a balance between stocks yielding more than the average and companies with an ability to grow their dividends consistently from current levels.

Outlook

There is currently a dichotomy between developed markets and developing markets. In both the US and UK, economic data looks reasonably robust. However, deflationary pressures arising from weak commodity prices and currency movements, along with weakness in developing economies, are causing policymakers to defer the normalisation of interest rates.

In the UK, consumer spending remains the main driver of growth, thanks to rising real incomes. Real household disposable incomes grew at the fastest rate since 2010 as employee pay growth accelerated. Looking forward, however, the new government's introduction of a national living wage, together with benefit cuts as a result of tightening austerity and possible interest rate rises, could lead to pressure on a range of UK companies with significant domestic operations. Those particularly vulnerable

are in the retail, food retail, leisure and support services sectors.

With profits growth vulnerable to further downgrades as a result of the slower pace of global growth, we expect dividend growth to moderate, not least because the share of profits being distributed as dividends has risen to historic highs. We expect the recent increase in merger and acquisition activity to continue, partly due to the continuing availability of cheap finance.

We remain committed to our investment process, which is based on fundamentals and a long-term, valuation-based approach. We continue to balance our existing holdings against potential new opportunities. Thus, as markets have weakened recently, we have looked for opportunities in harder-hit stocks. These have included turnaround situations, which the market has ignored recently due to its short term focus, such as Centrica, together with British American Tobacco, Greencore, Pearson and Prudential.

Schroder Investment Management Limited

16 November 2015

Securities shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

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 identifying significant strategic, investment, financial, regulatory, custodial and service provider risks relevant to the Company's business as an investment company and has put in place an appropriate monitoring system. This system assists the Board in determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. Both the principal risks and the monitoring system are subject to robust review at least annually. The last review took place in October 2015.

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 Board, 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 Board's on going risk assessment which has been in place throughout the financial year and up to the date of this Report.

Although the Board believes that it has a robust framework of internal control 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.

A summary of the principal risks and uncertainties faced by the Company, and actions taken to mitigate these risks and uncertainties, is set out below.

Strategy and competitiveness risk

Over time, the Company's investment strategy and asset class may become out of favour with investors or fail to meet their investment objectives, or the Company's cost base could become uncompetitive, particularly in light of open-ended fund alternatives. This may result in a wide discount of the share price to underlying net asset value both in absolute terms and in comparison to the peer group.

In order to mitigate this risk, the Directors periodically review whether the Company's investment remit remains appropriate and monitor the success of the Company in meeting its stated objectives at each Board meeting. The Manager monitors the share price relative to net asset value and the Directors review the marketing and distribution activity undertaken by the Manager and the corporate broker at each Board meeting.

The level of fees charged by the Manager and the Company's other service providers is also monitored by the Board and the ongoing competitiveness of management fee levels is considered annually by the Management Engagement Committee and the Board.

Investment management risk

The Manager's investment strategy (for example in terms of asset allocation or the level of gearing), if inappropriate, may result in the Company underperforming the market and/or peer group companies.

To mitigate this risk, the Board reviews: the Manager's compliance with the agreed investment restrictions; investment performance and risk against investment objectives and strategy; the portfolio's risk profile; and appropriate strategies employed to mitigate any negative impact of substantial changes in markets. These factors are considered at each Board Meeting; the Board also receives an annual presentation from the Manager's internal audit function and conducts an annual review of the ongoing suitability of the Manager.

Financial risk

In pursuing the investment objectives, the Company is exposed to the effect of market price fluctuations and interest rate movements. A significant fall in equity markets would have an adverse impact on the market value of the Company's underlying investments.

To mitigate this risk, the Directors consider the risk profile of the portfolio at each Board meeting and discuss appropriate strategies to mitigate any negative impact of substantial changes in markets with the Manager.

The Board also monitors the Manager's use of gearing and derivatives in accordance with agreed guidelines and restrictions set out in the Company's investment policy. The Company utilises a three-year term loan (entered into in 2014) together with a one-year revolving credit facility, which together amount to £30 million. 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.

To mitigate this risk, the Directors keep the Company's gearing under review and impose strict restrictions on borrowings. The Company's gearing continues to operate within pre-agreed limits so that it does not exceed 25% of shareholders' funds. In addition, index put options may be used up to the value of the Company's borrowing as a means of offsetting the gearing without the cost of selling portfolio holdings.

The Company may utilise short-dated call options written on holdings in the portfolio in order to generate additional income. One consequence of this is that it may limit the portfolio's participation in future rises in prices in the underlying securities. This risk is limited by only writing call options on securities held in the portfolio and there is a limit to the total income that may be generated by such instruments.

A full analysis of the financial risks facing the Company is set out in note 22 on pages 48 to 52 of the 2015 Annual Report.

Accounting, legal and regulatory risk

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. Should the Company not comply with these requirements, it could ultimately lose its investment trust status and capital gains within the Company's portfolio could, as a result, be subject to Capital Gains Tax.

In addition, breaches of the UK Listing Rules, the Companies Acts or other regulations with which the Company is required to comply, could lead to a number of detrimental outcomes which could damage the Company's reputation, including suspension from listing on the London Stock Exchange or a qualified audit report.

To mitigate these risks, the Board receives confirmation from the Manager and other key service providers at each Board meeting of compliance with relevant laws and regulations. Shareholder documents and announcements, including the Company's published Half Year and Annual Reports, are subject to stringent review processes, and procedures are in place to safeguard against the disclosure of inside information.

Custody and Depositary risk

Safe custody of the Company's assets may be compromised through control failures by the Depositary, including cyber hacking. To mitigate this risk, the Board receives quarterly reports from the Depositary confirming safe custody of the Company's assets, including cash, and portfolio holdings are independently reconciled by the Manager. In addition the existence of assets is subject to annual external audit and the Depositary's audited internal controls reports are reviewed by the Audit Committee and any concerns investigated.

Service provider risk

The Company has no employees and has delegated certain functions to a number of service providers, principally the Manager, Depositary and Registrar. Failure of controls and poor performance of any service provider could lead to reputational damage or loss. The Board is therefore reliant on the effective operation of the systems of its service providers. To mitigate this risk, the Board considers regular reports from key service providers and monitors the quality of services provided, and the Management Engagement Committee conducts an annual review of services to ensure that they remain appropriate. The Audit Committee also reviews annual audited internal controls reports from its key service providers, which includes confirmation of business continuity arrangements.

Going concern

Having assessed the principal risks and the other matters discussed in connection with the Viability Statement, the Directors consider it appropriate to adopt the going concern basis in preparing the accounts.

A statement on the longer term viability of the Company can be found in the Strategic Report on page 14 of the 2015 Annual Report.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report, the Strategic Report, the Report of the Directors including the Corporate Governance Statement, the 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 they 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 then apply them consistently;

-        make judgments 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 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.

Each of the Directors, whose names and functions are set out on page 17 of the 2015 Annual Report, confirms 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 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

-        they consider that 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, performance, business model and strategy.

Income Statement    

for the year ended 31 August 2015

		2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments held at fair value through profit or loss	-	(1,426)	(1,426)	-	16,999	16,999
Net foreign currency (losses)/gains	-	(16)	(16)	-	19	19
Income from investments	9,214	909	10,123	8,599	612	9,211
Other interest receivable and similar income	10	-	10	4	-	4
Gross return/(loss)	9,224	(533)	8,691	8,603	17,630	26,233
Investment management fee	(789)	(789)	(1,578)	(711)	(711)	(1,422)
Performance fee	-	-	-	-	(174)	(174)
Administrative expenses	(356)	-	(356)	(292)	-	(292)
Net return/(loss) before finance costs and taxation	8,079	(1,322)	6,757	7,600	16,745	24,345
Finance costs	(272)	(272)	(544)	(121)	(121)	(242)
Net return/(loss) on ordinary activities before taxation	7,807	(1,594)	6,213	7,479	16,624	24,103
Taxation on ordinary activities	(46)	-	(46)	(51)	-	(51)
Net return/(loss) on ordinary activities after taxation	7,761	(1,594)	6,167	7,428	16,624	24,052
Return/(loss) per share	11.30p	(2.32)p	8.98p	10.82p	24.20p	35.02p

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 recognised gains and losses other than those included in the results above and therefore no separate statement of total recognised gains and losses has been presented.

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

Reconciliation of Movements in Shareholders' Funds

for the year ended 31 August 2015

	Called-up		Capital	Share	Warrant
	share	Share	redemption	purchase	exercise	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2013	6,869	7,404	2,011	34,936	1,596	113,092	5,708	171,616
Net return on ordinary activities	-	-	-	-	-	16,624	7,428	24,052
Dividends paid in the year	-	-	-	-	-	-	(6,732)	(6,732)
At 31 August 2014	6,869	7,404	2,011	34,936	1,596	129,716	6,404	188,936
Net (loss)/return on ordinary activities	-	-	-	-	-	(1,594)	7,761	6,167
Dividends paid in the year	-	-	-	-	-	-	(6,938)	(6,938)
At 31 August 2015	6,869	7,404	2,011	34,936	1,596	128,122	7,227	188,165

Balance Sheet

as at 31 August 2015

	2015	2014
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	204,829	206,332
Current assets
Debtors	1,709	1,871
Cash at bank and in hand	2,184	1,791
	3,893	3,662
Current liabilities
Creditors: amounts falling due within one year	(557)	(1,058)
Net current assets	3,336	2,604
Total assets less current liabilities	208,165	208,936
Creditors: amounts falling due after more than one year	(20,000)	(20,000)
Net assets	188,165	188,936
Capital and reserves
Called-up share capital	6,869	6,869
Share premium	7,404	7,404
Capital redemption reserve	2,011	2,011
Share purchase reserve	34,936	34,936
Warrant exercise reserve	1,596	1,596
Capital reserves	128,122	129,716
Revenue reserve	7,227	6,404
Total equity shareholders' funds	188,165	188,936
Net asset value per share	273.94p	275.06p

These accounts were approved and authorised for issue by the Board of Directors on 16 November 2015 and signed on its behalf by:

Ian Barby

Chairman

Cash Flow Statement

for the year ended 31 August 2015

	2015	2014
	£'000	£'000
Net cash inflow from operating activities	6,862	6,603
Servicing of finance
Interest paid	(544)	(161)
Net cash outflow from servicing of finance	(544)	(161)
Taxation
Overseas tax paid	(30)	(73)
Investment activities
Purchases of investments	(37,346)	(51,596)
Sales of investments	37,496	38,746
Special dividend received allocated to capital	909	612
Net cash inflow/(outflow) from investment activities	1,059	(12,238)
Dividends paid	(6,938)	(6,732)
Net cash inflow/(outflow) before financing	409	(12,601)
Financing
Loan drawn down	-	13,300
Net cash inflow from financing	-	13,300
Net cash inflow in the year	409	699

Notes to the Accounts

1.         Accounting policies

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP") 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 January 2009. All of the Company's operations are of a continuing nature.

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

The policies applied in these accounts are consistent with those applied in the preceding year.

2.         Income

	2015	2014
	£'000	£'000
Income from investments:
UK dividends	7,987	7,209
Overseas dividends	1,154	1,328
Scrip dividends	73	62
	9,214	8,599
Other interest receivable and similar income:
Deposit interest	10	4
Total income	9,224	8,603
Capital:
Special dividends allocated to capital	909	612

3.         Investment management fee

		2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Management fee	789	789	1,578	711	711	1,422
Performance fee	-	-	-	-	174	174
	789	789	1,578	711	885	1,596

The basis for calculating the management fee is set out in the Report of the Directors on page 20 of the 2015 Annual Report.

4.         Dividends

(a)        Dividends paid and declared

	2015 £'000	2014 £'000
2014 fourth interim dividend of 4.1p (2013: 3.8p)	2,816	2,610
First interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Second interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Third interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Total dividends paid in the year	6,938	6,732

	2015 £'000	2014 £'000
Fourth interim dividend declared of 4.3p (2014: 4.1p)	2,954	2,816

(b)        Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ("Section 1158")

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year as shown below. The revenue available for distribution by way of dividend for the year is £7,761,000 (2014: £7,428,000).

	2015 £'000	2014 £'000
First interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Second interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Third interim dividend of 2.0p (2014: 2.0p)	1,374	1,374
Fourth interim dividend of 4.3p (2014: 4.1p)	2,954	2,816
Total dividends of 10.3p (2014: 10.1p) per share	7,076	6,938

5.         Return/(loss) per share

	2015 £'000	2014 £'000
Revenue return	7,761	7,428
Capital (loss)/return	(1,594)	16,624
Total return	6,167	24,052
Weighted average number of ordinary shares in issue during the year	68,688,343	68,688,343
Revenue return per share	11.30p	10.82p
Capital (loss)/return per share	(2.32)p	24.20p
Total return per share	8.98p	35.02p

6.         Net asset value per share

	2015	2014
Net assets attributable to shareholders (£'000)	188,165	188,936
Shares in issue at the year end	68,688,343	68,688,343
Net asset value per share	273.94p	275.06p

7.         Transactions with the Manager

Under the terms of the AlFM Agreement, the Manager is entitled to receive a management fee. The performance fee arrangement ceased on 31 August 2014 and a new management fee calculation took effect from 1 September 2015. Details of the basis of the calculation are given in the Report of the Directors on page 20 of the 2015 Annual Report. Any investments in funds managed or advised by the Manager or any of its associated companies are excluded from the assets used for the purpose of the calculation and therefore incur no fee.

The management fee payable in respect of the year ended 31 August 2015 amounted to £1,578,000 (2014: £1,422,000) of which £383,000 (2014: £724,000) was outstanding at the year end. A performance fee amounting to £174,000 was payable in respect of the comparative year and the whole of that amount was outstanding at the comparative year end.

No Director of the Company served as a director of any member of the Schroders Group at any time during the year.

8.         Status of announcement

2014 Financial Information

The figures and financial information for 2014 are extracted from the published Annual Report and Accounts for the year ended 31 August 2014 and do not constitute the statutory accounts for that year. The 2014 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.

2015 Financial Information

The figures and financial information for 2015 are extracted from the Annual Report and Accounts for the year ended 31 August 2015 and do not constitute the statutory accounts for the year. The 2015 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 Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

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

 

END

 

 

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