Annual Financial Report

RNS Number : 3568F

Schroder Oriental Income Fund Ltd

11 November 2015

 



11 November 2015

ANNUAL REPORT AND ACCOUNTS

Schroder Oriental Income Fund Limited (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.schroderorientalincomefund.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 Oriental Income Fund Limited

Performance

The year ended 31 August 2015 held mixed fortunes for Asian markets and this has been reflected in the Company's results. Positive returns for the first half of the financial year were reversed in the second as concerns about China impacted all markets in Asia. The Company's net asset value produced a negative total return of 5.8% over the year ended 31 August 2015 (2014: positive total return of 10.9%) and the share price produced a negative total return of 6.1% (2014: positive total return of 15.2%).

The Manager's Review provides a more detailed description of performance, market background and investment outlook for the Company.

Dividends

Revenue earnings per share for the year increased by 7.5% to 8.73 pence per share compared with 8.12 pence per share for the previous year, benefiting from a 9.1% rise in investment income, with companies in the portfolio continuing to grow their dividends to shareholders.

Three interim dividends totalling 4.60 pence per share have been paid in respect of the year ended 31 August 2015 and the Board has now declared a fourth interim dividend of 3.40 pence per share for the year. This takes total dividends per share for the year ended 31 August 2015 to 8.00 pence, an increase of 4.6% on total dividends of 7.65 pence per share paid in respect of the previous financial year. The fourth interim dividend will be paid on 30 November 2015 to shareholders on the register on 20 November 2015.

Gearing policy

During the year under review, the Company renewed its revolving £50 million multicurrency credit facility with Scotiabank Europe Plc for a further year. Gearing stood at 5.1% at the beginning of the year and had increased to 5.5% as at 31 August 2015. The level of gearing continues to be monitored closely by the Board and managed as necessary. The Company's gearing continues to operate within pre-agreed limits so that it does not represent more than 25% of the Company's net assets.

Issue of shares and discount control management

Demand for the Company's shares continued to be strong during the year under review and the asset class has remained attractive for investors, albeit that the rate of share issues has slowed since July 2015. In this context, the Board continued to reissue shares from Treasury at a slight premium to asset value in order to provide liquidity to investors and a total of 11,580,000 ordinary shares were reissued from Treasury during the year.

A further 1,800,000 shares have been reissued from Treasury since the end of the year.

Share issuance and buy-back authorities

The Board is seeking to renew the existing authorities to pre-emptively issue and to buy back shares in the Company and appropriate resolutions are included in the Notice of the Annual General Meeting. The Board believes that these authorities are valuable tools in the continuing management of the share price volatility relative to net asset value per share. The average premium to net asset value during the year ended 31 August 2015 was 1.5%.

Management fees

In October 2015, the Board undertook its annual review of management fees. In light of the current size of the Company, the Board has agreed certain changes to the fees payable to the Manager, to take effect from 1 December 2015. The basic management fee charged on net assets of the Company above £250 million will reduce to 0.70% per annum (0.75% per annum will continue to be charged on net assets up to that amount). In addition, the fee for administrative, accounting and company secretarial services, which has remained unchanged since launch, will increase from £75,000 to £150,000 per annum. The performance fee will remain in place in its current form. These fees, other than the performance fee, will continue to be calculated and paid quarterly in arrears.

Board refreshment

The Board has considered its composition, balance and diversity and, in view of the length of service of three of its members, has considered plans for succession. The Board has commenced the search for a new Director with a view to making an appointment as soon as practicable. Following this appointment, and allowing a suitable period of time for the new Director to become familiar with their role, it is

envisaged that one of the longer serving Directors will retire.

Ten year anniversary

The Company has now been in existence for 10 years, so it is timely to look back at the reasons behind its launch.

The premise then was that Asia ex Japan equities could provide an attractive diversification for UK income-oriented clients. Furthermore, for more risk-averse portfolios, an income approach could afford lower risk access to the region's growth. It's a pleasure to say that thus far the Company has delivered on this: attractive levels of dividend and growth in dividend, with returns materially above its Reference Index, the MSCI AC Pacific (ex Japan) Index, the median UK equity income fund, and the UK stock market (source: MSCI and Factset). The Company now has a market capitalisation that is nearly three times that at launch, making it more accessible for larger investors.

It begs the question, however, as to whether this success can continue. At one level, there are new challenges to the region's growth, as discussed in the Manager's Review. At another level, the role of an Asian income fund in UK investors' portfolios is now more accepted than a decade ago and indeed remains as compelling as ever.

Part of this is the success of the asset class, but part also is that large swathes of the Asian corporate sector are paying more attention to the importance of dividends as a component of shareholder returns. Of course, some companies continue to downplay the importance of dividends, the most prominent being in Korea, but we see these markets and individual companies as having potential for the future.

Above all, the Manager assures us that there is a wide and growing choice of Asian companies paying above-average dividends with good prospects for growth in those dividends. One of the flexibilities we enjoy is the scope to build up a healthy revenue reserve as well as paying out an attractive level of dividend. The reserve provides some re-assurance on dividend sustainability, as well as representing additional assets to be put to work for the Company's shareholders.

£1,000 invested in the Company at launch would, if all the dividends had been reinvested, have a value of £2,727 by 31 August 2015. Your Board is hopeful for another 10 years of success.

Annual General Meeting

The Annual General Meeting will be held in Guernsey at 12.00 noon on Tuesday, 8 December 2015 and shareholders are invited to attend.

Robert Sinclair

Chairman

10 November 2015

Manager's Review

The net asset value per share of the Company recorded a negative total return of 5.8% over the 12 months to 31 August 2015. A total dividend for the year has been declared of 8.00 pence, representing a 4.6% rise from the year before.

The second half of the Company's fiscal year witnessed significant declines in Asian stock markets. The Chinese market was a major focus for investors, with the Shanghai stock market index falling almost 40% from the peak recorded in early June, amid a raft of largely ineffective official interventions to provide support. With Chinese (and indeed regional) growth continuing to slow, and little in the way of positive developments outside the region, only one market, the Philippines, managed a positive return for the year in sterling terms.

The strength of the US dollar and the anticipation of tightening moves from the US Federal Reserve contributed to the malaise. Lower liquidity and a slowing in Chinese growth proved a lethal combination for commodity prices, and although lower energy and raw material prices are generally beneficial to the Asian economies and consumers, these sectors have been particularly weak, falling between a quarter and a third over the year in sterling terms.

Commodity exposure has played its part in the relative returns seen in Malaysia and Australia. In the latter it has been the currency that has borne the brunt of the adjustment required by the negative terms of trade impact as well as continued monetary loosening from the Reserve Bank of Australia. Malaysian equities and the currency were hard hit by lower oil prices, a collapse in the current account surplus, high foreign ownership of the local bond market and a spreading financial scandal.

Greater China markets have generally proved more defensive, aided by resilience of the currencies despite speculation surrounding the future course of the Chinese renminbi. Slowing global demand in information technology impacted the Taiwanese market, although the downside was cushioned somewhat by strong balance sheets, and a good focus on shareholder returns through attractive dividend policies.

Company positioning and performance

Although absolute returns were disappointing for the year, performance was substantially ahead of the negative total return of 13.2% by the Reference Index, the MSCI AC Pacific (ex Japan) Index. In a period of rising nervousness over growth in the region, the Company's focus on well financed companies with good cash flow returns and attractive dividends stood it in relatively good stead.

The main positive contribution to relative performance came from stock selection, most notably in Australia, Hong Kong, Taiwan, Singapore, Thailand and Korea. In terms of country positioning, the overweighting in Hong Kong, underweighting of Korea, and nil weight in Malaysia were the key areas of value added. The main headwinds to relative performance were stock selection and the underweight in China, and stock selection in New Zealand.

The main country exposures remain Hong Kong, Australia, Taiwan and Singapore. Within these markets we reduced Singapore and, to a lesser extent, Australia to fund additions to Hong Kong and, marginally, Taiwan. In sector terms, we added to materials in view of the extreme weakness of the sector, consumer discretionary and telecommunications, funded from a reduction in industrials.

Investment outlook

It is easy to paint a subdued shorter-term picture for Asian equity markets. Regional economic activity continues to slow, deflationary forces remain strong given falling currencies among important trading partners and competitors (Japan, Europe, other emerging markets), consumer confidence is generally low (with even the Chinese consumer tending to defer those little luxuries), private capital spending subdued, and there is little sign of counter-cyclical government investment apart, inevitably, from China.

While investors have derived little comfort from the recent deferral of interest rate rises by the US Federal Reserve, it is important to keep the current situation in proportion. The Asian region continues to generate reasonable levels of growth, external balances generally remain healthy, and exposure to overseas borrowing is far below the levels that proved so problematic in the Asian crisis of the late 1990s. Most governments and central banks in the region enjoy an enviable level of flexibility as regards policy options; if they have not used them it is at least as much due to their caution as it is to

any inability to execute.

China remains the key source of risk. Insofar as growth has already slowed markedly, particularly in areas such as real estate, industrial capital spending and luxury consumer spending (partly a function of the anti-corruption campaign), this has already been reflected in the economic and corporate statistics coming out of the region. More difficult to assess is the fall out from the deflation of the undoubted credit bubble that has supported Chinese growth hitherto, particularly in sectors suffering from chronic oversupply.

One should not underestimate the sensitivity of markets to this process. An otherwise unremarkable adjustment to the renminbi exchange rate in early August triggered violent moves in equity markets, and not just in Asia. However, China does have some important cards in its hand including a current account surplus, ample foreign exchange reserves, high domestic savings and direct control of the banking sector.

Furthermore, valuations of Asian markets have moved more decisively to a level which, historically, has represented good value. We take some comfort from a portfolio of companies with solid balance sheets, sustainable returns, shareholder focused management and good dividend discipline. With modest levels of gearing, the Company is in a good position to take advantage of any China sourced volatility

going forward.

Schroder Unit Trusts Limited

10 November 2015

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 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 most recent 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 ongoing risk assessment which has been in place throughout the financial year and up to the date of the Annual 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 alternatives. This may result in a wide discount of the share price to underlying asset value both in absolute terms and comparative to the peer group.

In order to mitigate this risk, the Board periodically reviews whether the Company's investment remit remains appropriate and monitors 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 Board reviews 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 such fee levels is considered annually by the Management Engagement Committee and the Board.

Investment management risk

The Manager's investment strategy, if inappropriate, may result in the Company underperforming the market and/or peer group companies.

To mitigate this risk, the Board reviews at each Board meeting 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 to mitigate any negative impact of substantial changes in markets. 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 and currency risks

The Company is exposed to the effect of market and currency fluctuations due to the nature of its business. A significant fall in regional equity markets or substantial currency fluctuations could 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 Company invests in underlying assets which are denominated in a range of currencies and therefore has an exposure to changes in the exchange rate between sterling and other currencies, which has the potential to have a significant effect on returns. While the Directors consider the Company's hedging policy on a regular basis, the Company has not hedged any of the portfolio's currency exposure back to sterling to reduce the risk of currency fluctuations and the volatility of returns which might result from such currency exposure. The Manager may use hedging as part of its investment strategy and hedged a portion of the Company's Hong Kong dollar exposure into US dollars during the year.

The Board also monitors the Manager's use of gearing and leverage in accordance with agreed guidelines and restrictions set out in the Company's investment policy. The Company utilises a credit facility, currently in the amount of £50 million, which increases 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 continual 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 the Company's net asset value.

A full analysis of the financial risks facing the Company is set out in note 20 on pages 49 to 54 of the 2015 Annual Report.

Accounting, legal and regulatory risk

Breaches of the UK Listing Rules, the Companies (Guernsey) Law, 2008 (as amended) 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 Safekeeping and Cashflow Monitoring Agent, including cyber hacking. To mitigate this risk, the Board receives quarterly reports from the Safekeeping and Cashflow Monitoring Agent 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 Safekeeping and Cashflow Monitoring Agent'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, Safekeeping and Cashflow Monitoring Agent and Registrar. Failure of controls and poor performance of service providers 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.

Statement of Directors' responsibilities

The Directors are responsible for preparing the financial statements in accordance with applicable Guernsey law and generally accepted accounting principles.

Guernsey Company law requires the Directors to prepare financial statements for each financial year which 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 should:

-        select suitable accounting policies in accordance with IAS 8:Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

-        present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-        provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance;

-        state that the Company has complied with IFRS, subject to any material departures disclosed and explained in the financial statements;

-        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business; and

-        make judgements and estimates that are reasonable and prudent.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008 (as amended). 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 listed on page 22 of the 2015 Annual Report, confirms that, to the best of their knowledge:

-        the financial statements, which have been prepared in accordance with International Financial Reporting Standards as adopted in the EU and with the Companies (Guernsey) Law, 2008, give a true and fair view of the assets, liabilities, financial position and the 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

-        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 performance, business model and strategy.

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 medium term viability of the Company can be found in the Strategic Report on page 20 of the 2015 Annual Report.

Statement of Comprehensive Income

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 at fair value through profit or loss	-	(46,719)	(46,719)	-	28,387	28,387
Net foreign currency gains	-	5,968	5,968	-	210	210
Income from investments	23,002	-	23,002	21,074	878	21,952
Other income	9	-	9	24	-	24
Total income/(loss)	23,011	(40,751)	(17,740)	21,098	29,475	50,573
Management fee	(971)	(2,265)	(3,236)	(887)	(2,070)	(2,957)
Performance fee	-	-	-	-	(1,786)	(1,786)
Other administrative expenses	(620)	(5)	(625)	(566)	(3)	(569)
Profit/(loss) before finance costs and taxation	21,420	(43,021)	(21,601)	19,645	25,616	45,261
Finance costs	(311)	(726)	(1,037)	(272)	(629)	(901)
Profit/(loss) before taxation	21,109	(43,747)	(22,638)	19,373	24,987	44,360
Taxation	(1,449)	-	(1,449)	(1,571)	-	(1,571)
Net profit/(loss) and total comprehensive income	19,660	(43,747)	(24,087)	17,802	24,987	42,789
Earnings/(loss) per share	8.73p	(19.43)p	(10.70)p	8.12p	11.40p	19.52p

The "Total" column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

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 31 August 2015

		Treasury	Capital
	Share	share	redemption	Special	Capital	Revenue
	capital	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2013	148,880	(35,624)	39	150,374	113,864	18,393	395,926
Reissue of ordinary shares from Treasury	-	6,177	-	-	-	-	6,177
Net profit	-	-	-	-	24,987	17,802	42,789
Dividends paid in the year	-	-	-	-	-	(16,436)	(16,436)
At 31 August 2014	148,880	(29,447)	39	150,374	138,851	19,759	428,456
Reissue of ordinary shares from Treasury	-	23,161	-	-	-	-	23,161
Net (loss)/profit	-	-	-	-	(43,747)	19,660	(24,087)
Dividends paid in the year	-	-	-	-	-	(17,440)	(17,440)
At 31 August 2015	148,880	(6,286)	39	150,374	95,104	21,979	410,090

Balance Sheet

at 31 August 2015

	2015	2014
	£'000	£'000
Non current assets
Investments at fair value through profit or loss	431,088	451,605
Current assets
Receivables	3,090	2,490
Cash and cash equivalents	18,259	20,575
	21,349	23,065
Total assets	452,437	474,670
Current liabilities
Payables	(42,347)	(46,214)
Net assets	410,090	428,456
Equity attributable to equity holders
Share capital	148,880	148,880
Treasury share reserve	(6,286)	(29,447)
Capital redemption reserve	39	39
Special reserve	150,374	150,374
Capital reserves	95,104	138,851
Revenue reserve	21,979	19,759
Total equity shareholders' funds	410,090	428,456
Net asset value per share	175.95p	193.44p

Cash Flow Statement

for the year ended 31 August 2015

	2015	2014
	£'000	£'000
Operating activities
(Loss)/profit before finance costs and taxation	(21,601)	45,261
Less exchange gains on foreign currency bank loan	(5,807)	(109)
Less losses/(gains) on investments at fair value through profit or loss	46,719	(28,387)
Net purchases of investments at fair value through profit or loss	(25,666)	(17,564)
Increase in receivables	(631)	(854)
(Decrease)/increase in payables	(2,564)	207
Overseas taxation paid	(1,467)	(1,491)
Net cash outflow from operating activities before interest	(11,017)	(2,937)
Interest paid	(1,114)	(827)
Net cash outflow from operating activities	(12,131)	(3,764)
Financing activities
Net bank loans drawn down	4,094	16,430
Reissue of ordinary shares from Treasury	23,161	6,177
Dividends paid	(17,440)	(16,436)
Net cash inflow from financing activities	9,815	6,171
(Decrease)/increase in cash and cash equivalents	(2,316)	2,407
Cash and cash equivalents at the start of the year	20,575	18,168
Cash and cash equivalents at the end of the year	18,259	20,575

Notes to the Accounts

for the year ended 31 August 2015

1. Accounting Policies

The accounts have been prepared in accordance with the Companies Guernsey Law, 2008 and International Financial Reporting Standards ("IFRS"), which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ("IASC"), that remain in effect and to the extent that they have been adopted by the European Union.

Where consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with presentational guidance set out in the Statement of Recommended Practice for Investment Trust Companies (the "SORP") issued by the Association of Investment Companies in January 2009.

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

The Company's share capital is denominated in sterling and this is the currency in which its shareholders operate and expenses are generally paid. The Board has therefore determined that sterling is the functional currency and the currency in which the accounts are presented. Amounts have been rounded to the nearest thousand.

The accounts have been prepared on the going concern basis. The disclosures on going concern in the Directors' Report on page 27 of the 2015 Annual Report form part of these financial statements. The principal accounting policies adopted are set out below.

2. Income

	2015	2014
	£'000	£'000
Income from investments:
Overseas dividends	22,991	21,074
Interest on government bond	11	-
	23,002	21,074
Other income:
Deposit interest	9	24
Total income	23,011	21,098
Capital:
Special dividend allocated to capital	-	878

3. Management and performance fees

		2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Management fee	971	2,265	3,236	887	2,070	2,957
Performance fee	-	-	-	-	1,786	1,786
	971	2,265	3,236	887	3,856	4,743

The basis for calculating the investment management fee and performance fee is set out in the Report of the Directors on page 25 of the 2015 Annual Report.

4. Dividends

Dividends paid and declared

	2015	2014
	£'000	£'000
2014 fourth interim dividend of 3.15p (2013: 3.00p)	7,018	6,560
First interim dividend of 1.50p (2014: 1.50p)	3,344	3,283
Second interim dividend of 1.50p (2014: 1.50p)	3,353	3,283
Third interim dividend of 1.60p (2014: 1.50p)	3,725	3,310
Total dividends paid in the year	17,440	16,436
	2015	2014
	£'000	£'000
Fourth interim dividend declared of 3.40p (2014: 3.15p)	7,924	6,977

The fourth interim dividend declared in respect of the year ended 31 August 2014 differs from the amount actually paid due to shares issued after the balance sheet date but prior to the share register record date.

5. (Loss)/earnings per share

	2015	2014
	£'000	£'000
Net revenue profit	19,660	17,802
Net capital (loss)/profit	(43,747)	24,987
Net total (loss)/profit	(24,087)	42,789
Weighted average number of Ordinary shares in issue during the year	225,115,369	219,238,697
Revenue earnings per share	8.73p	8.12p
Capital (loss)/earnings per share	(19.43)p	11.40p
Total (loss)/earnings per share	(10.70)p	19.52p

6. Net asset value per share

	2015	2014
Net assets attributable to shareholders (£'000)	410,090	428,456
Shares in issue at the year end	233,071,574	221,491,574
Net asset value per share	175.95p	193.44p

7. Transactions with the Manager

The Company has appointed Schroder Unit Trusts Limited (the "Manager"), a wholly owned subsidiary of Schroders plc, to provide investment management, accounting, secretarial and administration services. Details of the management and performance fees are given in the Report of the Directors on page 25 of the 2015 Annual Report. The management fee payable in respect of the year amounted to £3,236,000 (2014: £2,957,000) and the company secretarial fee payable to the Manager amounted to £75,000 (2014: £75,000). No performance fee is payable in respect of the year (2014: £1,786,000).

If the Company invests in funds managed or advised by the Manager or any of its associated companies, any fee earned by the Manager from those funds is deducted from the management fee payable by the Company. There have been no such investments during the current or comparative year.

Details of Mr Sherwell's connections with the Manager are given on page 23 of the 2015 Annual Report.

8. Related party transactions

The Company has no related parties other than its Directors. Details of the remuneration payable to Directors are given in the Remuneration Report on page 34 of the 2015 Annual Report. Fees payable to Directors amounting to £27,000 (2014: £27,000) were outstanding at the year end.

Details of Directors' shareholdings in the Company are given in the Report of the Directors on page 24 of the 2015 Annual Report.

9. 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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