Annual Financial Report

RNS Number : 8187S

Shires Income PLC

27 May 2009

SHIRES INCOME PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2009

1. CHAIRMAN'S STATEMENT

Results review

In my first year as Chairman of your Company, we have faced some of the most unpredictable and difficult times in investment markets for decades. The global financial crisis spread faster and deeper than anyone expected and has pushed the global economy into a significant downturn due to a unique combination of a worldwide liquidity crisis, a rapid deterioration in the economic environment and a failure of financial institutions to manage systemic risk. Corporate governance and financial regulation were not up to the mark and the knock-on effect is likely to be felt for years to come.

During this unprecedented period, almost all investments, apart from government bonds and cash, declined in value. In the UK, the FTSE All Share index declined by 32.2% in capital terms. The decline in the Company's net assets reflects the harsh environment and the negative impact from gearing in falling markets.

However, despite the conditions, I am pleased to report that your Company is proposing a maintained full year dividend payment at 19.75p per share, almost entirely covered by income generated from the portfolio. If approved at the AGM, a final dividend of 6.55p (2008 - 6.55p) will be paid on 31 July 2009 to shareholders on the register at 3 July 2009.

Investment Returns

Given the background, shareholders will appreciate why the asset value fell during the year but the scale of decline was compounded by the Company being geared into falling markets. It is very disappointing to report that in the year under review, the total return on net assets was -47.8% while the total return on the share price was -44.7% compared to -29.3% from our benchmark, the FTSE All Share. The performance was adversely affected by the impact of gearing, weakness in preference shares as well as equities and exposure to medium and smaller sized companies.

The total return on share price was better than that on net assets because your Company's discount improved during the year. Over the twelve months to 31 March 2009, the discount closed from 8.5% to move on to a small premium of 1.1% as demand for investment trusts with above average yields increased as savings rates declined.

Earnings and Dividends

At the interim stage, the Board indicated that dividend cuts from underlying equity investments were likely to increase as the year progressed. That has indeed turned out to be the case as some companies have reduced dividends in order to conserve cash and rebuild their balance sheets. The Board has monitored income generation closely and in particular examined the Company's long term sustainable revenue flows. We believe it is sensible to place less emphasis on securing income through options trading though it has been, and will remain, an element of our strategy using the carefully designed controls we have in place.

The Board appreciates how important high yield is to shareholders but has to balance this against forecast revenue, prudent investment principles and the objective of achieving capital growth over the longer term. After careful consideration of the Company's projected income generation, the Board anticipates that the Company should be able to pay a dividend of 12.0p per share in the year to 31 March 2010. The Board believes this level of dividend is more sustainable in the current economic climate and more consistent with the objective of achieving growth in both capital and income. A dividend of 12.0p is equivalent to a yield of 8.8% on the current share price of 136p. This is expected to be covered by revenue return per share in the year to 31 March 2010 and is underpinned by revenue reserves (net of the third interim and the final dividend) equivalent to 14.9p per share.

Clearly, these statements about future dividends are subject to market conditions and the absence of unforeseen circumstances.

Portfolio Profile and Gearing

Historically, the Company has had a high level of structural gearing by way of index-linked debenture stock to enhance income generation. This has proved to be both inflexible and expensive in times of rising inflation and decreasing interest rates and the average cost of this borrowing in the financial year has been approximately 9%. Moreover, as equity values declined last year, the gearing increased from 27.5% to 55.2% and the proportion invested in preference shares increased as they performed relatively better than equities. Gearing was monitored carefully throughout the year. The second tranche of the index-linked debenture stock was repaid on 6 March 2009 by recourse to existing facilities, including a £10 million revolving credit facility which was renewed until March 2010 and selective portfolio realisations. The remaining and final tranche of the index-linked debenture will be repaid on 6 March 2010.

AIC/JP Morgan Claverhouse VAT Test Case

I am pleased to advise that we have recognised the sum of £284,000 in these accounts in respect of the settlement of VAT paid on investment management fees between 2004 and 2007. In accordance with our accounting policy this has been recognised equally between capital and income.

Outlook

The UK economy is expected to contract by at least 3.5% this year. However, investors should take comfort from the swift intervention by both governments and central banks to resolve the financial crisis and restore confidence in the banking sector. Financial markets are showing tentative signs of stabilisation, especially after the introduction of quantitative easing policies in both the UK and USA. In the last month, some forward looking economic indicators suggest that the rate of deceleration is easing.

The recessionary conditions continue to feed through to company results causing profits downgrades, rights issues and some dividend cuts; trends we expect to remain in place for most of this year. But, as in past recessions, the stock market has discounted much of the negative news-flow and equity valuations are in many cases at undervalued levels. We believe that equity and preference shares will eventually recover and that there are opportunities to invest selectively at historically undervalued levels.

Anthony B. Davidson

Chairman

26 May 2009

2. INVESTMENT MANAGERS REVIEW

Background

The year to 31 March 2009, was dominated by the unfolding global financial crisis. The problems which originated in the US sub prime mortgage market were repeated in the UK and across Europe. Low interest rates, inappropriate lending practices and poor risk management resulted in the failure of major banks and financial institutions and, ultimately, required government intervention to bail out the sector. The uncertainty created by the crisis, possibly the worst since the 1930s, was negative for virtually all investment classes bar government bonds and cash. In the UK, the FTSE All Share index declined by 29.3%, in total return terms. The outcome was even worse for small and medium sized companies which returned
-44.6% and -34.0% respectively. Corporate bonds were affected by heightened concerns about default risk and declined by 13.5%. The only positive returns were found in UK gilts and cash which delivered 10.3% and 3.6% respectively.

Portfolio Strategy

As equity values declined last year, the Company's gearing increased from 27.5% to 55.2% and affected the proportions invested in preference shares and equities with the former increasing from 33.5% to 50.7% of net assets. A net £2.1m was disinvested from preference shares. The main equity portfolio activity was to sell the small, often AIM listed and nil yielding holdings and establish new investments in better quality companies which also broadened the sector exposures and reduced the concentration in financials. The Manager monitored gearing carefully throughout the year and raised some cash towards the £9.9m repayment of the second tranche of the index-linked debenture stock in March 2009.

Revenue Account

The table below details the main sources of the Company's income over the last five years. In the year to end March 2009, equities accounted for around half of the revenue generated followed by holdings in preference shares. 19% came from traded options premiums generated by writing puts and calls on individual stocks. There was also a small balance from interest earned on cash on deposit. Compared to the previous year, the negative impact from the trading subsidiary was significantly reduced and losses will not recur as all of the subsidiary's investments were sold in 2008.

	2009	2008	2007	2006	2005
	%	%	%	%	%
Ordinary dividends	41.5	47.5	50.6	44.3	45.5
Preference dividends	28.1	29.0	28.6	25.6	26.9
Shires Smaller Companies plc	8.7	7.4	7.2	11.2	11.4
Fixed interest and bank interest	2.9	1.1	1.6	1.9	1.5
Preference share switching	0.0	0.0	0.0	0.0	6.5
Dealing subsidiary	(0.5)	(7.0)	3.1	2.2	(1.5)
Traded option premiums	19.3	22.0	8.9	14.8	9.7
	________	________	________	________	________
	100.0	100.0	100.0	100.0	100.0
	________	________	________	________	________
Total income (£'000s)	6,929	8,117	8,062	7,741	7,611
	________	________	________	________	________

Despite the difficult investment conditions, the Company's assets generated 94.4% of the recommended distribution of 19.75p per share with the balance of 1.1p coming from revenue reserves.

Equities

At the start of the year in April 2008, the portfolio had an over weight position in smaller companies, some of which were highly illiquid AIM listed and nil yielding shares. The Manager also sold a legacy unquoted holding, Submersible Television Surveys, and loan notes in a US listed small cap stock called Fuel Tech. The Mackintosh High Income fund was wound up at the end of June 2008 and the Company's units were redeemed at 73p per share. At a sector level, the portfolio at end March 2008 had no exposure to the Oil & Gas sector but was very concentrated in Financials. Over the course of the year, these imbalances were addressed and new holdings initiated in larger, better quality companies which also broadened the portfolio's sector exposures.

An initial weight was established in the Oil & Gas sector with three new holdings added in BP, Royal Dutch Shell and Venture Production, the North Sea oil & gas producer. In early 2009, the Manager sold the investment in Venture Production to Centrica at a significant premium to other comparable oil and gas companies. In Industrials, BAE Systems performed well and its valuation increased sharply. The holding was progressively reduced and the profits recycled into new and cheaper industrial holdings such as GKN, Rolls Royce and Tomkins. The holding in Rentokil was sold after continual disappointment with the company's results.

In General Retail, the holding in Topps Tiles was sold due to balance sheet and trading concerns and replaced by Marks & Spencer which is supported by its property assets and caters to a broader range of consumer expenditure. In tough times, consumers continue to spend on food but also seek out value for money. A new investment which fits that category was Wm Morrison, the supermarket chain, which has gained market share from its competitors as consumers have tightened their belts. Other companies involved in Consumer Services were added to the portfolio and included the budget hotel operator, Whitbread and Arriva, the UK bus and rail company. Both companies are beneficiaries of value for money trends in consumer and business spending. In the more defensive parts of the stock market, new investments were made into the food manufacturers, ABF and Unilever. Together with investments in the tobacco groups BATs and Imperial Group, these companies generate strong cash flows that in turn support reliable and growing dividends to shareholders.

The Financials sector covers a wide variety of companies and encompasses banks, insurance and property. To redress the overweight exposure in the portfolio, the Manager sold the small cap property companies such as Carpathian and replaced them with one holding in Land Securities. In insurance the holding in Jardine Lloyd Thomson was sold, Chesnara was reduced and Highway Insurance was sold after a cash takeover by Liverpool Victoria. The portfolio benefited from being underweight to banks and during the year the holdings in Barclays, Lloyds TSB and RBS were sold and switched into HSBC and Standard Chartered. The Manager subscribed to the £12.9bn rights issue announced by HSBC in early March 2009. As a result of the changes described, the exposure to financial companies declined from almost 40% to 20.6% of the equity portfolio.

By the end of March 2009, the number of listed holdings had been expanded from 34 to 40 while the sector exposures were successfully diversified away from dependence on financials to a broader based exposure.

Preference Shares

The preference share portfolio is an important contributor to the Company's revenue and as equity markets fell, increased as a proportion of invested assets from 26.3% to 32.7%. The main activity was to trim the holdings in Royal Sun Alliance and General Accident and switch part of the Standard Chartered preference share holding into ordinary shares which will provide better long term growth prospects for the portfolio.

Investment Performance Analysis

In the year to end March 2009, the total return on net assets was -47.8% compared to our benchmark, the FTSE All Share index which declined by 29.3%. The underperformance versus the benchmark was caused by a combination of gearing into falling equity and preference share values; a higher than benchmark exposure to smaller and medium sized companies and the negative impact from stock selection in Consumer Services and Financials. The table below details the contributions from the Company's assets to the NAV total return.

Equities (inc Shires Smaller Companies)	-40.6
Fixed income portfolio, total return	-7.5
Unlisted investments	0.9
Option writing	2.2
Cash	0.1
Index-Linked Debenture Stock	-2.6
Other financing costs and expenses	-0.3
	_________
Total return on Net Assets	-47.8
	_________

Prospects

Stock markets have recovered some lost ground in March and April as the pace of the economic downturn as evidenced by forward looking indicators, e.g. UK retail sales and export orders, has slowed. Certainly, investment sentiment has been helped by these trends together with better than feared news flow from the banks, both here and in the USA. Very low interest rates and quantitative easing programmes are further reasons to hope the worst point in the financial crisis is past.

The first quarter of 2009 has seen a series of rights issues and re-financing by companies. Dividends have been cut to conserve cash and companies are cutting costs rapidly to match lower levels of activity. Stock market valuations are attractive, even after the recent rally. The yield on the FTSE All Share index over the next twelve months, including announced dividend cuts, is estimated to be around 5.0% compared to the yield on a ten year UK gilt of 3.7%.With interest rates at historically low levels, equities and preference shares look attractive for income investors and, long term, should offer capital appreciation.

Aberdeen Asset Managers Limited

26 May 2009

3. RESULTS

	31 March 2009	31 March 2008	% change
Total investments	£54,731,000	£95,296,000	-42.6
Shareholders' funds	£35,271,000	£74,687,000	-52.8
Market capitalisation	£32,370,362	£65,334,676	-50.5
Net asset value per share	118.77p	251.49p	-52.8
Share price (mid market)	109.00p	220.00p	-50.5
Discount/(Premium) to adjusted NAV{A}	(1.1%)	8.5%
Gearing	55.2%	27.5%
Total expense ratio	1.1%	1.1%

Dividends and earnings
Revenue return per share{B}	18.64p	20.29p	-8.1
Dividends per share{C}	19.75p	19.75p	-
Dividend cover	0.93	1.03
Revenue reserves{D}	£7,668,000	£7,999,000

{A} Based on IFRS NAV above reduced by dividend adjustment of 10.95p (2008 - 10.95p). {B} Measures the revenue earnings for the year divided by the weighted average number of Ordinary shares in issue (see Income Statement). {C} The figures for dividends per share reflect the years in which they were earned (see note 9). {D} The revenue reserve figure does not take account of the third or final interim dividend amounting to £3,252,000 (2008 - £3,252,000).

Performance (total return)

	1 Year	3 Year	5 Year
	% Return	% Return	% Return
Net Asset Value	-47.8%	-54.8%	-27.8%
Share Price	-44.7%	-56.0%	-28.2%
FTSE All Share Index	-29.3%	-27.5%	+7.2%

Dividends
	Rate per share	xd date	Record date	Payment date
First interim dividend	4.40p	1 October 2008	3 October 2008	31 October 2008
Second interim dividend	4.40p	31 December 2008	5 January 2009	30 January 2009
Third interim dividend	4.40p	8 April 2009	14 April 2009	30 April 2009
Final dividend	6.55p	1 July 2009	3 July 2009	31 July 2009
2008/09	19.75p

First interim dividend	4.40p	3 October 2007	5 October 2007	31 October 2007
Second interim dividend	4.40p	2 January 2008	4 January 2008	31 January 2008
Third interim dividend	4.40p	9 April 2008	11 April 2008	30 April 2008
Final dividend	6.55p	2 July 2008	4 July 2008	31 July 2008
2007/08	19.75p

Ten Year Financial Record

Year to 31 March	2000	2001	2002	2003	2004(A)	2005	2006	2007	2008	2009
Revenue available for ordinary dividends (£'000)	5,797	5,713	5,739	5,853	5,770	5,770	5,792	5,987	6,026	5,536
Per share
Net revenue return (p)	19.6	19.3	19.4	19.7	19.5	19.6	19.5	20.2	20.3	18.6
Net dividends paid/proposed (p)	18.65	19.00	19.25	19.25	19.25	19.25	19.25	19.25	19.75	19.75
Total return (p)	(6.3)	(8.7)	(38.9)	(175.0)	76.0	52.5	74.8	26.8	(65.4)	(113.0)
Net asset value per share
Basic (p)	452.8	425.1	366.9	172.7	229.5	272.9	328.4	336.0	251.5	118.8
Diluted (p)	452.8	425.1	366.9	172.7	229.5	272.9	328.4	336.1	251.5	118.8
Shareholders' funds (£m)	134.3	126.0	108.9	51.2	68.1	81.1	97.5	99.8	74.7	35.3

(A) 2004 figures restated following the introduction of International Reporting Standards ('IFRS'). Figures for 2003 and earlier have not been restated.

Cumulative Performance (rebased to 100 at 31 March 1999)

	1999	2000	2001	2002	2003	2004 (A)	2005	2006	2007	2008	2009
NAV CR	100.0	94.8	89.0	76.8	36.2	48.0	55.0	66.2	67.7	50.7	23.9
NAV TR (B)	100.0	97.5	95.4	86.5	43.8	63.8	79.0	101.9	110.9	88.3	46.1
SP CR	100.0	89.5	92.6	74.6	31.7	50.2	59.6	70.3	69.7	49.3	24.4
SP TR (B)	100.0	92.3	99.9	84.4	38.6	67.6	87.3	110.2	116.2	87.8	48.5
Index CR	100.0	107.5	93.7	88.3	60.0	75.9	84.9	105.3	113.4	101.1	68.5
Index TR (B)	100.0	109.9	98.1	95.0	66.6	87.3	100.9	129.2	143.6	132.4	93.6

(A) 2004 figures restated following the introduction of International Reporting Standards ('IFRS'). Figures for 2003 and earlier have not been restated.

(B) Total return figures are based on reinvestment of net income

3. DISTRIBUTION OF ASSETS AND LIABILITIES

	Valuation at		Movement during the year				Valuation at
	31 March					Gains/	31 March
	2008		Purchases	Sales	Other	(losses)	2009
	£'000	%	£'000	£'000	£'000	£'000	£'000	%
Listed investments
Ordinary shares	67,734	90.7	30,329	(30,539)	-	(33,997)	33,527	95.1
Convertibles	1,434	1.9	-	(67)	-	(102)	1,265	3.6
Preference shares	25,037	33.5	1,300	(3,398)	(143)	(4,910)	17,886	50.7
	________	________	________	________	________	________	________	________
	94,205	126.1	31,629	(34,004)	(143)	(39,009)	52,678	149.4
Unlisted investments	1,091	1.4	-	(186)	-	1,148	2,053	5.8
	________	________	________	________	________	________	________	________
	95,296	127.5	31,629	(34,190)	(143)	(37,861)	54,731	155.2
Current assets	5,961	8.0					2,907	8.2
Current liabilities	(17,054)	(22.8)					(22,367)	(63.4)
Non current liabilities	(9,516)	(12.7)					-	-
	________	________					________	________
Net assets	74,687	100.0					35,271	100.0
	________	________					________	________
Net asset value per Ordinary share	251.5p						118.8p

4. BUSINESS REVIEW

Activities

The Company is an investment trust. Its subsidiary undertaking, Wiston Investment Company Limited, operates as an investment dealing company. The Company aims to provide shareholders with a high level of income together with growth of both income and capital from a portfolio substantially invested in UK equities.

The Company has an 18.1% interest in Shires Smaller Companies plc, a listed investment trust managed by Aberdeen.

Status of the Company

The Company, which was incorporated in 1929, has received approval as an investment trust by the Inland Revenue for all accounting periods up to and including 31 March 2008 and has since conducted its affairs so as to enable it to retain such approved status. It is a member of the Association of Investment Companies. The Company is an investment company within the meaning of Section 833 of the Companies Act 2006. So far as the Directors are aware, the close company provisions of the Income and Corporation Taxes Act 1988 do not apply to the Company.

Results and Dividends

Dividends declared and paid in the year amounted to 19.75p.

A third interim dividend of 4.4p was declared on 4 February 2009 payable on 30 April 2009. A final dividend of 6.55p per ordinary share is proposed. Under International Financial Reporting Standards (IFRS) both these dividends will be accounted for in the financial year ended 31 March 2010.

Principal Risks and Uncertainties

The principal risks facing the Company relate to the Company's investment activities and gearing and include market risk, liquidity risk and credit risk. An explanation of these risks and how they are managed is contained in note 19 to the financial statements.

Investment Policy

Investment Process

The Manager follows a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund Manager. Stock selection is intended as the major source of added value. No stock is bought without the Manager having first met management. The Manager estimates a company's worth in two stages, quality then price. Quality is defined by reference to management, business focus, the balance sheet and corporate governance. Price is calculated by reference to key financial ratios, the market, the peer group and business prospects. Top-down investment factors are secondary in the Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights.

Investment Risk

The investment risk within the portfolio is managed by investing in different categories of investments and by the Manager adhering to various guidelines set by the Board and to which the Manager would need to report with reasons to the Board should they not be adhered to. The Company invests in equities and preference shares.

Equity investments are selected in accordance with the investment process above. There are no specific sector limits set, with the Manager free to invest in individual equities that they believe will contribute to both the capital and income performance of the Company. However, the exposure to equities is limited by investment guidelines drawn up by the Board in conjunction with the Manager. In the year under review these guidelines included:

- Maximum equity gearing of 135% of Net Asset Value

- Maximum 7.5% of assets invested in the securities of one company (excluding Shires Smaller Companies plc)

- Maximum 5% of quoted investee company's ordinary shares

The Company also invests in preference shares primarily to enhance the income generation of the Company. The majority of these investments is in large financial institutions. The maximum holding in preference shares is managed by the second guideline referred to above. In addition the Company cannot hold more than 10% of an investee company's preference shares.

The Company enters into traded option contracts again primarily to enhance the income generation of the Company. The risk associated with these option contracts is managed through the guidelines below which operated in the year under review:

- Call options written to be covered by stock

- Put options written to be covered by net current assets/borrowing facilities

- Call options not to be written on more than 100% of a holding of stock

- Call options not to be written on more than 30% of the UK equity portfolio

- Put options not be written on more than 30% of the UK equity portfolio

The Company's gearing is in the form of a 5% Index Linked Debenture Stock and bank borrowing, utilising revolving credit facilities. The gearing risk of the Company is actively managed and monitored with the Manager able to increase or decrease the short term borrowings in line with their view of the stock market. In addition, the 135% equity gearing limit constrains the amount of gearing that can be invested in equities which are more volatile than the fixed interest part of the portfolio.

Going Concern

The Company's assets comprise mainly readily realisable securities which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of bank facilities. The Board considers that the Group has adequate financial resources to continue in operational existence for the foreseeable future.

By Order of the Board

Aberdeen Asset Management PLC

Secretaries

26 May 2009

5. STATEMENT OF DIRCTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Report and Accounts and the group and parent company financial statements (the 'financial statements'), in accordance with applicable law and regulations. Company law requires the Directors to prepare group and parent company financial statements for each financial year. Under the law they are required to prepare the group financial statements in accordance with IFRSs as adopted by the EU and have elected to prepare the parent company financial statements on the same basis.

The financial statements are required by law and IFRSs, as adopted by the EU, to present fairly the financial position of the group and the parent company and performance of the group; the Companies Act 1985 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.

In preparing each of the group and parent company financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether they have been prepared in accordance with IFRSs as adopted by the EU subject to any material
departures disclosed and explained in the Notes to the Financial Statements; and

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

The Directors confirm that the financial statements comply with these requirements.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the group and the parent company and enable them to ensure that its financial statements comply with the Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing

the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We confirm to the best of our knowledge:

- the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the Company; and

- the Directors' 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 the Company faces.

For and on behalf of Shires Income PLC

Andrew Robson

Chairman of the Audit Committee

26 May 2009

CONSOLIDATED INCOME STATEMENT

		Year ended			Year ended
		31 March 2009			31 March 2008
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Loss on investments at fair value	11	-	(37,832)	(37,832)	-	(23,445)	(23,445)

Investment income
Dividend income		4,618	-	4,618	6,106	-	6,106
Interest income from investments		731	(143)	588	728	(265)	463
Stock dividend		81	-	81	-	-	-
Traded option premiums		1,338	-	1,338	1,785	-	1,785
Deposit interest		39	-	39	92	-	92
Money market interest		129	-	129	-	-	-
Other income		26	16	42	2	-	2
Loss of dealing subsidiary		(33)	-	(33)	(595)	-	(595)
		________	________	________	________	________	________
	2	6,929	(37,959)	(31,030)	8,118	(23,710)	(15,592)
		________	________	________	________	________	________
Expenses
Investment management fee	3	(165)	(165)	(330)	(253)	(253)	(506)
VAT recoverable on investment management fees	20	142	142	284	-	-	-
Other administrative expenses	4	(308)	-	(308)	(410)	-	(410)
Finance costs of borrowings	6	(1,071)	(1,103)	(2,174)	(1,429)	(1,479)	(2,908)
		________	________	________	________	________	________
		(1,402)	(1,126)	(2,528)	(2,092)	(1,732)	(3,824)
		________	________	________	________	________	________
Profit before tax		5,527	(39,085)	(33,558)	6,026	(25,442)	(19,416)
Taxation	7	9	-	9	-	-	-
		________	________	________	________	________	________
Profit/(loss) attributable to equity holders of the Company		5,536	(39,085)	(33,549)	6,026	(25,442)	(19,416)
		________	________	________	________	________	________

Earnings/(loss) per Ordinary share (pence)		18.64	(131.61)	(112.97)	20.29	(85.67)	(65.38)
		________	________	________	________	________	________

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue return and capital columns are both prepared as explained in the accounting policies on page 29. All items in the above statement derive from continuing operations. All income and losses are attributable to the equity holders of the parent company. There are no minority interests. The accompanying notes are an integral part of these financial statements. The following table shows the revenue for each year under IFRS less the ordinary dividends declared in respect of the financial year to which they relate. This table is for information purposes only and does not form part of the above Consolidated Income Statement.

	Year to	Year to
	31 March	31 March
	2009{A}	2008{B}
	£'000	£'000
Revenue	5,536	6,026
Dividends declared	(5,865)	(5,865)
	________	________
	(329)	161
	________	________

{A} Dividends declared relates to first three interim dividends (each 4.40p) and the final dividend (6.55p) declared in respect of financial year 2008/09.

{B} Dividends declared relates to first three interim dividends (each 4.40p) and the final dividend (6.55p) declared in respect of financial year 2007/08.

BALANCE SHEETS

		Group		Company
		As at	As at	As at	As at
		31 March	31 March	31 March	31 March
		2009	2008	2009	2008
	Notes	£'000	£'000	£'000	£'000
Non-current assets
Ordinary shares		33,527	67,734	33,527	67,734
Convertibles		1,265	1,434	1,265	1,434
Other fixed interest		17,886	25,037	17,886	25,037
Unlisted investments		2,053	1,091	2,053	1,091
		__________	__________	__________	__________
Securities at fair value	11	54,731	95,296	54,731	95,296
		__________	__________	__________	__________
Current assets
Trade and other receivables		313	144	313	479
Accrued income and prepayments		1,099	2,082	1,099	2,082
Financial assets of dealing subsidiary		-	452	-	-
Cash and cash equivalents		1,495	3,283	1,495	3,283
		__________	__________	__________	__________
	13	2,907	5,961	2,907	5,844
		__________	__________	__________	__________
Total assets		57,638	101,257	57,638	101,140
Current liabilities
Trade and other payables		(175)	(337)	(269)	(347)
Short-term borrowings		(12,250)	(7,200)	(12,250)	(7,200)
Index-Linked Debenture stock	15	(9,942)	(9,517)	(9,942)	(9,517)
		__________	__________	__________	__________
	14	(22,367)	(17,054)	(22,461)	(17,064)
		__________	__________	__________	__________
Non-current liabilities
Index-Linked Debenture stock	15	-	(9,516)	-	(9,516)
		__________	__________	__________	__________
Net assets		35,271	74,687	35,177	74,560
		__________	__________	__________	__________

Issued capital and reserves attributable to equity holders of the parent
Called up share capital	16	14,899	14,899	14,899	14,899
Share premium account	17	18,855	18,887	18,855	18,887
Capital reserve	18	(6,151)	32,902	(6,160)	32,893
Revenue reserve	18	7,668	7,999	7,583	7,881
		__________	__________	__________	__________
		35,271	74,687	35,177	74,560
		__________	__________	__________	__________
Net asset value per Ordinary share (pence):	10	118.77	251.49	118.45	251.06
		__________	__________	__________	__________

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2009

			Share			Retained
	Share		premium		Capital	revenue
	capital		account		reserve	reserve	Total
	£'000		£'000		£'000	£'000	£'000
As at 31 March 2008	14,899		18,887		32,902	7,999	74,687
Revenue profit for the year	-		-		-	5,536	5,536
Capital losses for the year	-		(32)		(39,053)	-	(39,085)
Equity dividends (see note 9)	-		-		-	(5,867)	(5,867)
	__________		__________		__________	__________	__________
As at 31 March 2009	14,899		18,855		(6,151)	7,668	35,271
	__________		__________		__________	__________	__________

Company Statement of Changes in Equity

Year ended 31 March 2009

				Share		Retained
		Share		premium	Capital	revenue
		capital		account	reserve	reserve	Total
		£'000		£'000	£'000	£'000	£'000
As at 31 March 2008		14,899		18,887	32,893	7,881	74,560
Revenue profit for the year		-		-	-	5,569	5,569
Capital losses for the year		-		(32)	(39,053)	-	(39,085)
Equity dividends (see note 9)		-		-	-	(5,867)	(5,867)
		__________		__________	__________	__________	__________
As at 31 March 2009		14,899		18,855	(6,160)	7,583	35,177
		__________		__________	__________	__________	__________

The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
The accompanying notes are an integral part of these financial statements.

GROUP AND COMPANY CASH FLOW STATEMENT

	Year ended		Year ended
	31 March 2009		31 March 2008
	£'000	£'000	£'000	£'000
Cash flows from operating activities
Investment income received		6,368		6,768
Deposit interest received		51		81
Money Market Interest Received		123		-
Investment management fee paid		(366)		(551)
Other cash receipts		1,363		1,616
Other cash expenses		(376)		(426)
		________		________
Cash generated from operations		7,163		7,488
Interest paid		(1,320)		(1,850)
Tax paid		9		-
		________		________
Net cash inflows from operating activities		5,852		5,638
		________		________
Cash flows from investing activities
Purchases of investments	(31,549)		(51,284)
Sales of investments	34,304		71,789
Sales of dealing subsidiary	419		-
Repayment of Index-Linked Debenture Stock	(9,997)		(9,517)
	________		________
Net cash(outflow)/inflow from investing activities		(6,823)		10,988
		________		________
Cash flows from financing activities
Equity dividends paid	(5,867)		(5,717)
	________		________
Net cash outflow from financing activities		(5,867)		(5,717)
		________		________
Net (decrease)/increase in cash and cash equivalents		(6,838)		10,909
Cash and cash equivalents at start of period		(3,917)		(14,826)
		________		________
Cash and cash equivalents at end of period		(10,755)		(3,917)
		________		________
Cash and cash equivalents comprise:
Cash and cash equivalents		1,495		3,283
Short-term borrowings		(12,250)		(7,200)
		________		________
		(10,755)		(3,917)
		________		________

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2009

1.	Accounting policies
	(a)	Basis of accounting
		The financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), and International Accounting Standards and Standing Interpretations Committee interpretations 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.

		The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of investments and in accordance with the applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in January 2009 and adopted early). The early adoption of the January 2009 SORP had no effect on the financial statements of the Company, other than the requirement to separately disclose capital reserves that relate to the revaluation of investments held at the reporting date. These are disclosed in note 18. This new requirement replaces the previous requirement to disclose the value of the capital reserve that was unrealised. The Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP except as referred to in paragraph (d) below. The financial statements have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The Directors believe this is appropriate for the reasons outlined in the Directors' Report on page 18.

		In order better to reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. In accordance with the Company's status as a UK investment company under Section 833 of the Companies Act 2006 (previously s266 of the Companies Act 1985), net capital returns may not be distributed by way of dividend. Additionally, the net revenue of the Company is the measure the Directors believe appropriate in assessing the Group's compliance with certain requirements set out in Section 842 of the Income and Corporation Taxes Act 1988.

		Amendment to IAS 1 - Presentation of Financial Statements : comprehensive revision including requiring a statement of comprehensive income (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS1 - Presentation of Financial Statements : a Revised Presentation relating to disclosure of puttable instruments and obligations arising on liquidation (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS 7 - Statement of Cash Flows (effective for annual periods beginning on or after 1 January 2010)
		Amendment to IAS 23 - Borrowing Costs (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS 27 - Consolidated and Separate Financial Statements : consequential amendments arising to IFRS 3 (effective for annual periods beginning on or after 1 July 2009)
		Amendment to IAS 29 - Financial Reporting in Hyperinflationary Economies (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS 32 - Financial Instruments (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS 36 - Impairment of Assets : amendments resulting from May 2008 Annual Improvements to IFRSs (effective for annual periods beginning on or after 1 January 2009)
		Amendment to IAS 36 - Impairment of Assets : amendments resulting from April 2009 Annual Improvements to IFRSs (effective for annual periods beginning on or after 1 January 2010)
		Amendment to IAS 39 - Financial Instruments : amendments for eligible hedged items (effective for annual periods beginning on or after 1 July 2009)
		Amendment to IAS 39 - Financial Instruments : amendments for embedded derivatives when reclassifying financial instruments (effective for annual periods beginning on or after 30 June 2009)
		Amendment to IAS 39 - Financial Instruments : amendments resulting from April 2009 Annual Improvements to IFRSs (effective for annual periods beginning on or after 1 January 2010)
		Revised IFRS 1 - First-time Adoption of International Financial Reporting Standards (effective for annual periods beginning on or after 1 January 2009)
		Revised IFRS 7 - Financial Instruments (effective for annual periods beginning on or after 1 January 2009)
		IFRS 8 - Operating Segments (effective for annual periods beginning on or after 1 January 2009)
		Revised IFRS 8 - Operating Segments : amendments resulting from April 2009 Annual Improvements to IFRSs (effective for annual periods beginning on or after 1 January 2010)

		The Directors do not anticipate that the adoption of these Standards and Interpretations in future periods will materially impact the Group's financial results in the period of initial application although there will be revised presentations to the Primary Financial Statements and additional disclosures. Any future business combinations will be affected. The Group intends to adopt the standards in the reporting period when they become effective.

	(b)	Consolidation
		The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. The Company has availed itself of the relief from showing an Income Statement for the parent company, granted under Section 408 of the Companies Act 2006 (previously section 230 of the Companies Act 1985).

	(c)	Investments
		All investments have been designated upon initial recognition at fair value through profit or loss. This is because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis. Investments are recognised or derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned. Proceeds are measured at fair value which is regarded as the proceeds of sales less any transaction costs.

		The fair value of the financial instruments is based on their quoted bid price at the Balance Sheet date, without deduction for any estimated future selling costs. Any unquoted investments would be held at fair value, as measured by the Directors using appropriate valuation methodologies such as earnings multiples, recent transactions and net assets. In the case of the Company's investment in the subsidiary, of which the Company owns 100% of its Ordinary share capital, this has been measured at fair value, which is deemed to be its net asset value.

		Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Group Income Statement as '(Losses)/gains on investments'. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase.

	(d)	Income
		Dividend income from equity investments which includes all Ordinary shares and also preference shares classified as equity instruments is accounted for when the shareholders' rights to receive payment have been established, normally the ex-dividend date.

		Interest from debt securities, which include preference shares classified as debt instruments, is accounted for on an effective interest rate basis. Any write-off of the premium or discount on acquisition as a result of using this basis is allocated against unrealised capital reserve. The SORP recommends that such a write-off should be allocated against revenue. The Directors believe this treatment is not appropriate for a high yielding investment trust which frequently buys and sells debt securities, and believe any premium or discount included in the price of such an investment is a capital item.

		Traded option contracts are restricted to writing out-of-the-money options with a view to generating income. Premiums received on traded option contracts are recognised as income evenly over the period from the date they are written to the date when they expire or are exercised or assigned. Gains and losses on the underlying shares acquired or disposed of as a result of options exercised are included in the capital account. Unexpired traded option contracts at the year end are accounted for at their fair value.

		Interest from deposits is dealt with on an effective interest basis.

		Underwriting commission is recognised when the underwriting services are provided and is taken to revenue, unless any shares underwritten are required to be taken up, in which case the proportionate commission received is deducted from the cost of the investment.

	(e)	Expenses
		All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Income Statement, all expenses have been presented as revenue items except those where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated. Accordingly the investment management fee and finance costs have been allocated 50% to revenue and 50% to capital, in order to reflect the Directors expected long-term view of the nature of the investment returns of the Company.

	(f)	Short-term borrowings
		Short-term borrowings, which comprise interest bearing bank loans and overdrafts, are initially recognised at cost, being the fair value of the consideration received, net of any issue expenses. The finance costs, being the difference between the net proceeds of borrowings and the total amount of payments that require to be made in respect of those borrowings, accrue evenly over the life of the borrowings and are allocated 50% to revenue and 50% to capital.

	(g)	Index-Linked Debenture stock
		The Index-Linked adjustments to the redemption value of the Index-Linked Debenture stock, and the interest payable on the Debenture are aggregated. The total is then charged 50% to capital and 50% to revenue. The amortisation of discounts and expenses of issue are charged wholly to share premium.

		This allocation between capital and revenue reflects the expected long-term split of returns as mentioned in note (e).

	(h)	Taxation
		The tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Income Statement because it excludes items of income or expenditure that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group has no liability for current tax.

		Deferred tax is provided in full on temporary differences which result in an obligation at the Balance Sheet date to pay more tax, or a right to pay less tax, at a future date at rates expected to apply when they crystallise, based on current tax rates and law. Temporary differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.


	(i)	Foreign currencies
		Transactions involving foreign currencies are converted at the rate ruling at the time of the transaction. Assets and liabilities in foreign currencies are translated at the closing rates of exchange at the Balance Sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in capital reserve or the revenue account as appropriate.

		2009		2008
2.	Income	£'000	£'000	£'000	£'000
	Income from listed investments
	Dividend income		4,618		6,106
	Interest income from investments		731		728
	Money Market Interest		129		-
	Stock dividend		81		-
			________		________
			5,559		6,834

		2009		2008
	Other income from investment activity	£'000	£'000	£'000	£'000
	Deposit interest		39		92
	Traded option premiums		1,338		1,785
	Sales of investments in dealing subsidiary	419		-
	Cost of sales in dealing subisdiary	(452)		-
	Decrease in fair value of investments of subsidiary	-		(595)
		________		________
			(33)		(595)
	Other income		26		2
			________		________
			1,370		1,284
			________		________
	Total income		6,929		8,118
			________		________

			2009		2008
	Total income comprises:		£'000		£'000
	Dividends and interest from investments		5,559		6,834
	Deposit interest		39		92
	Other income from investment activity		1,331		1,192
			________		________
	Total income		6,929		8,118
			________		________

	All dividend income was received from UK companies. The amount of £143,000 (2008 - £265,000) included in the capital column of Investment Income represents the write off of the premium or discount on acquisition of debt securities referred to in note 1(d). An amount of £16,000 (2008 - £nil) was received by way of consent payment and has been treated as capital.

		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment Management fees	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	165	165	330	232	232	464
	VAT paid	-	-	-	21	21	42
		________	_______	_______	_______	_______	_______
		165	165	330	253	253	506
		________	_______	_______	_______	_______	_______

	For the year ended 31 March 2009 management and secretarial services were provided by Aberdeen Asset Managers Limited. The fee is 0.45% for funds up to £100 million and 0.40% for funds over £100 million, calculated monthly and paid quarterly. The fee is allocated 50% to revenue and 50% to capital.

	The fee for the year ended 31 March 2009 was exclusive of VAT whereas the fee for 2008 included VAT up to the quarter ended 30 September 2007. Note 20 provides further information on the status with regard to the recoverability of VAT previously charged on investment management fees and its implications for the Company.

			2009	2008
4.	Administrative expenses		£'000	£'000
	Directors' remuneration		77	74
	Fees payable to auditors and associates
	-	fees payable to the Company's auditors for the audit of the annual accounts	20	19
	-	fees payable to the Company's auditors and its associates for other services:
		- taxation services	-	7
		- other services pursuant to legislation	-	7
	Marketing contribution paid to Aberdeen		63	52
	Professional fees		38	37
	Other administrative expenses		110	214
			________	________
			308	410
			________	________

5.	Directors' remuneration
	The Company had no employees during the year (2008 - nil). No pension contributions were paid for Directors (2008 - £nil).

		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
6.	Finance costs and borrowings	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdrafts repayable within five years	159	159	318	217	217	434
	5% Index-Linked Debenture Stock 2008/2010	912	912	1,824	1,212	1,212	2,424
	Amortisation of issue expenses on Debenture Stock	-	32	32	-	50	50
		________	________	________	________	________	________
		1,071	1,103	2,174	1,429	1,479	2,908
		________	________	________	________	________	________

Taxation

At 31 March 2009 the Company had surplus management expenses and loan relationship debits with a tax value of £6,286,000 (2008 - £6,425,000) in respect of which a deferred tax asset has not been recognised. This is because the Company is not expected to generate taxable income in a future period in excess of the deductible expenses of that future period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses.

The following table is a reconciliation of current taxation to the charges/credits which would arise if all ordinary activities were taxed at the standard UK corporation tax rate of 28%. (2008 - 30%)

	2009			2008
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Profit/(loss) before tax	5,527	(39,085)	(33,558)	6,026	(25,442)	(19,416)

Taxation of return on ordinary activities at the standard rate of corporation tax	1,548	(10,944)	(9,396)	1,808	(7,633)	(5,825)
Effects of:
UK dividend income not liable to further tax	(1,309)	-	(1,309)	(1,832)	-	(1,832)
Prior year adjustment	(9)	-	(9)	-	-	-
Non-taxable write off of debt security premium/discount	-	40	40	-	80	80
Brought forward management expenses utilised	(239)	-	(239)	24	519	543
Current year management expenses not utilised	-	311	311	-	-	-
Non-taxable realisation (gains)	-	10,593	10,593	-	7,034	7,034
	________	________	________	________	________	________
Taxation charge for the year	(9)	-	(9)	-	-	-
	________	________	________	________	________	________

8.	Revenue and capital loss attributable to equity holders of the Company
	The revenue and capital loss attributable to equity holders of the Group for the financial year includes £33,516,000 (2008 - £18,837,000) which has been dealt with in the Company's financial statements.

		2009	2008
9.	Dividends	£'000	£'000
	Amounts recognised as distributions to equity holders in the period:
	Third interim dividend for the year ended 31 March 2008 of 4.4p (2007 - 4.4p) per share	1,306	1,306
	Final dividend for the year ended 31 March 2008 of 6.55p (2007 - 6.05p) per share	1,946	1,796
	First two interim dividends for the year ended 31 March 2009 totalling 8.8p (2008 - 8.8p) per share	2,613	2,613
		________	________
		5,865	5,715
		________	________
	3.5 % Cumulative preference shares	2	2
		________	________

	The third interim dividend of 4.4p for the year to 31 March 2009 paid on 30 April 2009 and the proposed final dividend for the year to 31 March 2009 payable on 31 July 2009 have not been included as liabilities in these financial statements.

	We also set out below the total ordinary dividends payable in respect of the financial year, which is the basis on which the requirements of Section 842 of the Income and Corporation Taxes Act 1988 are considered:
		2009	2008
		£'000	£'000
	Three interim dividends for the year ended 31 March 2009 totalling 13.2p (2008 - 13.2p) per share	3,920	3,920
	Final proposed dividend for the year ended 31 March 2009 of 6.55p (2008 - 6.55p) per share	1,945	1,945
		________	________
		5,865	5,865
		________	________

10.	Return and net asset value per share
	The losses per share are based on the following figures:
		2009	2008
		£'000	£'000
	Revenue return	5,536	6,026
	Capital return	(39,085)	(25,442)
		___________	___________
	Net return	(33,549)	(19,416)
		___________	___________
	Weighted average number of Ordinary shares	29,697,580	29,697,580
		___________	___________

	Net asset value per Ordinary share is based on net assets attributable to Ordinary Shareholders of £35,271,000 (2008 - £74,687,000) and on the 29,697,580 (2008 - 29,697,580) Ordinary shares in issue at 31 March 2009.

		Group & Company
		2009	2008
11.	Non current assets - Securities at fair value	£'000	£'000
	Listed on recognised stock exchanges:
	United Kingdom	52,676	93,976
	Overseas	2	229
		___________	___________
		52,678	94,205
	Unlisted - overseas	2,053	1,091
		___________	___________
		54,731	95,296
		___________	___________

		Group
		2009			2008
		Listed	Unlisted		Listed		Unlisted
		investments	investments	Total	investments		investments	Total
		£'000	£'000	£'000	£'000		£'000	£'000
Cost at 31 March 2008		101,105	827	101,932	114,280		1,516	115,796
Unrealised (depreciation)/ appreciation at 31 March 2008		(6,900)	264	(6,636)	19,829		2,947	22,776
		___________	___________	________	___________		___________	________
Fair value at 31 March 2008		94,205	1,091	95,296	134,109		4,463	138,572
Purchases		31,629	-	31,629	51,284		-	51,284
Sales	- proceeds	(34,004)	(186)	(34,190)	(66,833)		(4,196)	(71,029)
	- realised (losses)/ gains on sales	(18,788)	7	(18,781)	2,375		3,892	6,267
Amortised cost adjustments to debt securities{A}		(143)	-	(143)	(265)		-	(265)
Movement in fair value during the year		(20,221)	1,141	(19,080)	(26,465)		(3,068)	(29,533)
		___________	___________	________	___________		___________	________
Fair value at 31 March 2009		52,678	2,053	54,731	94,205		1,091	95,296
{A} Charged to capital.		___________	___________	________	___________		___________	________

Cost at 31 March 2009		79,799	648	80,447	101,105		827	101,932
Unrealised (depreciation)/appreciation at 31 March 2009		(27,121)	1,405	(25,716)	(6,900)		264	(6,636)
		___________	___________	________	___________		___________	________
Fair value at 31 March 2009		52,678	2,053	54,731	94,205		1,091	95,296
		___________	___________	________	___________		___________	________

		Company
		2009			2008
		Listed	Unlisted		Listed	Unlisted
		investments	investments	Total	investments	investments		Total
		£'000	£'000	£'000	£'000	£'000		£'000
Cost at 31 March 2008		101,105	827	101,932	114,545	1,131		115,676
Unrealised appreciation at 31 March 2008		(6,900)	264	(6,636)	19,564	3,332		22,896
		___________	___________	________	___________	___________		________
Fair value at 31 March 2008		94,205	1,091	95,296	134,109	4,463		138,572
Purchases		31,629	-	31,629	51,284	-		51,284
Sales	- proceeds	(34,004)	(186)	(34,190)	(66,833)	(4,196)		(71,029)
	- realised (losses)/ gains on sales	(18,788)	7	(18,781)	2,375	3,892		6,267
Amortised cost adjustments to debt securities{A}		(143)	-	(143)	(265)	-		(265)
Movement in fair value during the year		(20,221)	1,141	(19,080)	(26,465)	(3,068)		(29,533)
		___________	___________	________	___________	___________		________
Fair value at 31 March 2009		52,678	2,053	54,731	94,205	1,091		95,296
{A} Charged to capital.		___________	___________	________	___________	___________		________

	2009			2008
	Listed	Unlisted		Listed	Unlisted
	investments	investments	Total	investments	investments	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Cost at 31 March 2009	79,799	648	80,447	101,105	827	101,932
Unrealised (depreciation)/appreciation at 31 March 2009	(27,121)	1,405	(25,716)	(6,900)	264	(6,636)
	___________	___________	________	___________	___________	________
Fair value at 31 March 2009	52,678	2,053	54,731	94,205	1,091	95,296
	___________	___________	________	___________	___________	________

					Group & Company
					2009	2008
Loss on investments					£'000	£'000
Net realised (losses)/ gains on sales of investments					(17,660)	6,757
Call options exercised					(1,121)	(490)
					___________	________
Net realised losses on sales					(18,781)	6,267
Fees paid in relation to sale of the holding in Glasgow Investment Managers					-	(45)
Movement in fair value of investments					(18,785)	(28,687)
Put options assigned					(295)	(846)
Movement in unrealised (appreciation)/depreciation of traded options					29	(134)
					___________	________
Loss on investments					(37,832)	(23,445)
					___________	________

The cost of the exercising of call options and the assigning of put options is the difference between the market price of the underlying shares and the strike price of the options. The premiums earned on options expired, exercised or assigned of £1,338,000 (2008 - £1,785,000) have been dealt with in the revenue account.

The movement in the fair value of traded option contracts has been calculated in accordance with the accounting policy stated in note 1(e) and has been charged to the capital reserve.

As at 31 March 2009, the Company had pledged collateral equal to 139% of the market value of the traded options in accordance with standard commercial practice. The carrying amount of financial assets pledged equated to £1,861,000 all in the form of securities. The collateral position is monitored on a daily basis, which then determines if further assets are required to be pledged over and above those already pledged.

During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs on the purchases and sales of investments in the year was £225,000 (2008 - £439,000).

All investments are categorised as held at fair value through profit and loss and were designated as such upon initial recognition.

At 31 March 2009 the Company held the following investments comprising more than 3% of the class of share capital held:

Company	Country of incorporation	Number of shares held	Class of shares held	Class held %
Shires Smaller Companies plc	Scotland	4,000,000	ordinary	18.1%
Sierra Monitor Corporation	USA	1,549,134	common stock	13.6%
REA Holdings	England	996,720	9% cum pref	6.7%
Ecclesiastical Insurance Office	England	4,240,000	7% cum pref	6.4%
Royal Sun Alliance	England	4,450,000	7% cum pref	3.6%
General Accident	Scotland	3,548,000	7% cum pref	3.2%
Standard Chartered	England	3,125,000	8% non-cum pref	3.2%

At 31 March 2009 Shires Income PLC held no units (2008 - 2,549,011) of the Mackintosh High Income OEIC. The total capital losses on the sale of the Mackintosh High Income OEIC during the year were £700,000 (2008 - £1,095,000).

12.	Subsidiary undertakings
	As at 31 March 2009, the Company owned the whole of the issued ordinary share capital of its two subsidiary undertakings, Topshire Limited and Wiston Investment Company Limited, both of which are investment dealing companies registered in England. Topshire Limited has been dormant since 1989.

		Group		Company
		2009	2008	2009	2008
13.	Current assets	£'000	£'000	£'000	£'000
	Investment sales	-	114	-	114
	Accrued income & prepayments	1,099	2,082	1,099	2,082
	Due from subsidiary undertakings	-	-	-	335
	Investments of dealing subsidiary at fair value	-	452	-	-
	Other debtors	313	30	313	30
	Cash at bank	1,495	3,283	1,495	3,283
		_________	_________	________	_______
		2,907	5,961	2,907	5,844
		_________	_________	________	_______
	None of the above amounts is overdue.

		Group		Company
		2009	2008	2009	2008
14.	Current liabilities	£'000	£'000	£'000	£'000
	Bank loans	12,250	7,200	12,250	7,200
	Due to subsidiary undertakings	-	-	94	10
	Other creditors	175	337	175	337
	5% Index-Linked Debenture Stock 2008/2010:
	- due in less than one year	9,942	9,517	9,942	9,517
		_________	________	________	_______
		22,367	17,054	22,461	17,064
		_________	________	________	_______

	Included above are the following amounts owed to Aberdeen, the Manager and Secretaries:
	Other creditors	69	105	69	105
		_________	_________	________	_______
	In March 2009 the Company renewed an agreement with The Royal Bank of Scotland to provide a loan facility for up to £10,000,000. At the year end £8,750,000 had been drawn down at an all-in interest rate of 3.6537% which matured on 3 April 2009. At 7 May 2009 the principal amount was £8,800,000 at an all-in interest rate of 3.6036%.

	The terms of The Royal Bank of Scotland facility contain a covenant that gross borrowings may not exceed 50% of adjusted net assets. The Company met this covenant throughout the period and until the date of this Report.

	In December 2008 the Company entered into an agreement with HSBC to provide a loan facility for up to £3,500,000. At the year end £3,500,000 had been drawn down at an all-in interest rate of 1.05% which matured on 3 April 2009. At 7 May 2009 the principal amount was unchanged at an all-in interest rate of 1.05%.

	The terms of the HSBC facility contain a covenant that net assets are not less than £35 million. The Company has met this covenant throughout the period and until the date of this Report.

		Group and Company
		2009	2008
15.	Index Linked Debenture Stock	£'000	£'000
	Due within 1 year	9,942	9,517
	Due in 1 -2 years	-	9,516
		________	________
		9,942	19,033
		________	________
	5% Index-Linked Debenture Stock 2008/2010
	This Stock is unlisted and is secured by a floating charge over the whole of the assets of the Company and its dealing subsidiary undertakings. The total liability of the Index-Linked Debenture Stock is £9,942,000 which is included in current liabilities.

	The terms of the deed specify that the Group's aggregate borrowings must not exceed shareholders' funds and the market value of total assets requires to be at least three times the Group's secured indebtedness. The only secured indebtedness is the Index-Linked Debenture Stock. The Company met these covenants throughout the period and until the date of this Report.

	The Directors' opinion of the total fair value of this Stock at 31 March 2009, determined with reference to the current interest profile of similar instruments, was £10,107,000 (2008- £21,158,000). This value is given for disclosure purposes only.

	Interest on the 5% Stock is paid on 6 March and 6 September each year at an annual rate of 5% as adjusted by the movement in the UK General Index of Retail Prices (RPI) over the period from July 1989 to the month eight months prior to the month in which interest is paid.

	The capital amount to be repaid on the 5% Stock on 6 March in each of the years 2008 to 2010 is one third of the nominal amount as adjusted by the movement in the RPI over the period from July 1989 to the month eight months prior to the month in which repayment is made.

	On 6th March 2009, £9,997,000 of capital was repaid.

	The discount on issue is amortised annually to the share premium account over the life of the Stock.

	The amounts outstanding at 31 March 2009 comprise:

	Group and Company
	2009	2008
	£'000	£'000
Nominal amounts	5,333	10,666
Discounts on issue	(15)	(46)
Amortisation of discounts	-	-
	________	________
	5,318	10,620
Index-linked adjustments	4,624	8,413
	________	________
	9,942	19,033
	________	________
The movements during the year were as follows:

	Group and Company
	2009	2008
	£'000	£'000
Amounts outstanding at 31 March 2008	19,033	27,459
Amortisation of discounts (note 17)	32	50
Capital repaid (including indexation of £5,333)	(9,997)	(9,517)
Index-linked adjustments	874	1,041
	________	________
Amounts outstanding at 31 March 2009	9,942	19,033
	________	________

		2009		2008
16.	Called up share capital	Number	£'000	Number	£'000
	Authorised
	Ordinary shares of 50 pence each	39,800,000	19,900	39,800,000	19,900
	3.5% Cumulative Preference shares of £1 each	100,000	100	100,000	100
			_________		__________
			20,000		20,000
			_________		__________

		2009		2008
		Number	£'000	Number	£'000
	Allotted, called up and fully paid Ordinary shares of 50 pence each	29,697,580	14,849	29,697,580	14,849
	3.5% Cumulative Preference shares of £1 each	50,000	50	50,000	50
			_________		__________
			14,899		14,899
			_________		__________

	The Group manages its capital to ensure that it will be able to continue as a going concern. The capital structure of the Company consists of debt, cash and cash equivalents and equity, comprising issued capital, reserves and retained earnings. Details of how the capital is managed are explained in the Director's Report. The Company does not have any externally imposed capital requirements.

		2009	2008
17.	Share premium account	£'000	£'000
	At 31 March 2008	18,887	18,937
	Amortisation of expenses and discounts on issue of Debenture Stock (note 15)	(32)	(50)
		_________	_________
	At 31 March 2009	18,855	18,887
		_________	_________

		Group	Company	Group	Company
		2009	2009	2008	2008
18.	Retained earnings	£'000	£'000	£'000	£'000
	Capital reserve
	At 31 March 2008	32,902	32,893	58,294	58,285
	Net gains on sales of investments during year	(18,781)	(18,781)	6,222	6,222
	Movement in fair value gains on investments	(19,080)	(19,080)	(29,533)	(29,533)
	Amortised cost adjustment charged to capital	(143)	(143)	(265)	(265)
	Investment management fees	(165)	(165)	(253)	(253)
	VAT recoverable on investment management fees	142	142	-	-
	Bank loans and overdrafts repayable within five years	(159)	(159)	(217)	(217)
	Index-Linked Debenture costs	(912)	(912)	(1,212)	(1,212)
	Traded options	29	29	(134)	(134)
	Other	16	16	-	-
		_______	_______	_______	_______
	At 31 March 2009	(6,151)	(6,160)	32,902	32,893
		_______	_______	_______	_______
	Revenue reserve
		Group	Company	Group	Company
		2009	2009	2008	2008
		£'000	£'000	£'000	£'000
	At 31 March 2008	7,999	7,881	7,690	6,993
	Revenue	5,536	5,569	6,026	6,605
	Dividends paid	(5,867)	(5,867)	(5,717)	(5,717)
		_______	_______	_______	_______
	At 31 March 2009	7,668	7,583	7,999	7,881
		_______	_______	_______	_______

19.	Risk management, financial assets and liabilities
	Risk management
	The Company's objective of providing a high and growing dividend with capital growth is addressed by investing primarily in UK equities to provide growth in capital and income and in fixed income securities to provide a high level of income.
	The impact of security price volatility is reduced by diversification. Diversification is by type of security - ordinary shares, preference shares, convertibles, corporate fixed interest and gilt-edged and by investment in the stocks and shares of companies in a range of industrial, commercial and financial sectors. The management of the portfolio is conducted according to investment guidelines, established by the Board after discussion with the Manager, which specify the limits within which the Manager is authorised to act.

	The Manager has a dedicated investment management process which aims to ensure that the investment objective is achieved. Stock selection procedures are in place based on the active portfolio management and identification of stocks. The portfolio is reviewed on a periodic basis by a Senior Investment Manager and also by the Manager's Investment Committee.

	The Company's Manager has an independent Investment Risk department for reviewing the investment risk parameters of all core equity, balanced, fixed income and alternative asset classes on a regular basis. The department reports to the Manager's Performance Review Committee which is chaired by the Manager's Chief Investment Officer. The department's responsibility is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry standard multi-factor models.

	Additionally, the Manager's Compliance department continually monitors the Company's investment and borrowing powers and reports to the Manager's Risk Management Committee.

	Financial assets and liabilities
	The Group's financial assets include investments, cash at bank and short-term debtors. Financial liabilities consist of the Index-Linked Debenture stock, short-term borrowings (together 'Gearing'), and other short-term creditors.

	Gearing
	The Group has in issue an Index-Linked Debenture on which the interest payable and the capital sum to be repaid on maturity are linked to the Retail Prices Index. Short-term borrowing consisting of revolving credit facilities from banking institutions is also used and bears interest at floating rates. The gearing risk is actively managed and monitored as part of the overall investment strategy. The employment of gearing magnifies the impact on net assets of both positive and negative changes in the value of the Group's portfolio of investments.

	The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, currency risk and other price risk), (ii) liquidity risk and (iii) credit risk. The Company has minimal exposure to foreign currency risk as it holds only a small amount of foreign currency assets and has no exposure to any foreign currency liabilities.

	The Company is subject to interest rate risk because bond yields are linked to underlying bank rates or equivalents, and its short-term borrowings and cash resources carry interest at floating rates. The interest rate profile is managed as part of the overall investment strategy of the Company.

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

		Interest rate risk
		Interest rate movements may affect:
		-	the fair value of the investments in fixed interest rate securities;
		-	the level of income receivable on cash deposits;
		-	interest payable on the Company's variable rate borrowings.
	The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

	The Board reviews on a regular basis the values of the fixed interest rate securities.

	Interest rate profile
	The interest rate risk profile of the portfolio of financial assets and liabilities (excluding ordinary shares and Convertibles) at the Balance Sheet date was as follows:

				Weighted	Weighted
				average	average			Non-
				period for which	interest	Fixed	Floating	interest
				rate is fixed	rate	rate	rate	bearing
	As at 31 March 2009			Years	%	£'000	£'000	£'000
	Assets
	UK irredeemable preference shares			-	8.06	14,766	-	-
	UK preference shares			30.90	11.47	3,120	-	-
	Cash			-	0.05	-	1,495	-
				_________	_________	________	_________	________
	Total assets			-	-	17,886	1,495	-
				_________	_________	________	_________	________
	Liabilities
	Short-term bank loan			0.01	2.91	(12,250)	-	-
	Index-Linked Debenture			-	-	-	(9,942)	-
				_________	_________	________	_________	________
	Total liabilities			-	-	(12,250)	(9,942)	-
				_________	_________	________	_________	________

				Weighted	Weighted
				average	average			Non-
				period for which	interest	Fixed	Floating	interest
				rate is fixed	rate	rate	rate	bearing
	As at 31 March 2008			Years	%	£'000	£'000	£'000
	Assets
	UK irredeemable preference shares			-	8.00	21,377	-	-
	UK preference shares			28.00	10.22	3,660	-	-
	Cash			-	4.00	-	3,284	-
				_________	_________	________	_________	________
	Total assets			-	-	25,037	3,284	-
				_________	_________	________	_________	________
	Liabilities
	Short-term bank loan			0.08	5.93	(7,200)	-	-
	Index-Linked Debenture			-	-	-	(19,033)	-
				_________	_________	________	_________	________
	Total liabilities			-	-	(7,200)	(19,033)	-
				_________	_________	________	_________	________

	The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans.
	The cash assets consist of cash deposits on call earning interest at prevailing market rates.
	The UK irredeemable preference shares assets have no maturity date.
	Short-term debtors and creditors (with the exception of loans) have been excluded from the above tables.

Maturity profile
The maturity profile of the Company's financial assets and financial liabilities (excluding Convertibles) at the Balance Sheet date was as follows:

	Within	Within	Within	Within	Within	More than
	1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years
At 31 March 2009	£'000	£'000	£'000	£'000	£'000	£'000
Fixed rate
UK irredeemable preference shares	-	-	-	-	-	14,766
UK preference shares	-	-	-	-	-	3,120
Short-term bank loan	(12,250)	-	-	-	-	-
	________	________	________	________	________	________
	(12,250)	-	-	-	-	17,886
	________	________	________	________	________	________
Floating rate
Index-Linked Debenture	(9,942)	-	-	-	-	-
Cash	1,495	-	-	-	-	-
	________	________	________	________	________	________
	(8,447)	-	-	-	-	-
	________	________	________	________	________	________
Total	(20,697)	-	-	-	-	17,886
	________	________	________	________	________	________

	Within	Within	Within	Within	Within	More than
	1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years
At 31 March 2008	£'000	£'000	£'000	£'000	£'000	£'000
Fixed rate
UK irredeemable preference shares	-	-	-	-	-	21,377
UK preference shares	-	-	-	-	-	3,660
Short-term bank loan	(7,200)	-	-	-	-	-
	________	________	________	________	________	________
	(7,200)	-	-	-	-	25,037
	________	________	________	________	________	________

Within

More than

1 year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Floating rate

£'000

Index-Linked Debenture

(9,517)

(9,516)

Cash

3,284

________

(6,233)

(9,516)

________

Total

(13,433)

(9,516)

25,037

________

Interest rate sensitivity

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

If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company's:

- profit before tax for the year ended 31 March 2009 would increase/decrease by £15,000 (2008 - £33,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances. These figures have been calculated based on cash positions at each year end.

- profit before tax for the year ended 31 March 2009 would increase / decrease by £501,000 (2008 - increase / decrease by £468,000). This is also mainly attributable to the Company's exposure to interest rates on its fixed interest securities. This is based on a Value at Risk ('VaR') calculated at a 99% confidence level.

In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. The risk parameters used will also fluctuate depending on the current market perception.

Other price risk

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

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

Other price sensitivity

If market prices at the Balance Sheet date had been 10% higher or lower while all other variables remained constant, the profit before tax attributable to Ordinary Shareholders for the year ended 31 March 2009 would have increased/decreased by £3,353,000 (2008 - increase/decrease of £6,773,000). This is based on the Company's equity portfolio held at each year end.

(ii)

Liquidity risk

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

Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of revolving credit facilities (note 14).

(iii)

Credit risk

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

The risk is not considered to be significant as it is actively managed as follows:

- where the Investment Manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default;

- investments in quoted bonds are made across a variety of industry sectors so as to avoid concentrations of credit risk;

- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;

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

- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a monthly basis. In addition, the Custodian carries out a stock reconciliation to third party administrators' records on a monthly basis to ensure discrepancies are picked up on a timely basis. The Manager's Compliance department carries out periodic reviews of the Custodian's operations and reports its finding to the Manager's Risk Management Committee.

- transactions involving derivatives, structured notes and other arrangements wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest are subject to rigorous assessment by the Investment Manager of the credit worthiness of that counterparty. The Company's aggregate exposure to each such counterparty is monitored regularly by the Board; and

- cash is held only with reputable banks with high quality external credit enhancements.

It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.

None of the Company's financial assets is secured by collateral or other credit enhancements.

Credit risk exposure

In summary, compared to the amounts in the Balance Sheet, the maximum exposure to credit risk at 31 March 2009 was as follows:

2009

2008

Balance

Maximum

Balance

Maximum

Sheet

exposure

Sheet

exposure

£'000

Non-current assets

Securities at fair value through profit or loss

54,731

95,296

Current assets

Trade and other receivables

313

144

Accrued income

1,099

2,067

Cash and cash equivalents

1,495

3,283

_________

57,638

100,790

_________

None of the Company's financial assets is past due or impaired.

Fair value of financial assets and liabilities

The book value of cash at bank and bank loans and overdrafts included in these financial statements approximate to fair value because of their short-term maturity. Investments held as dealing investments are valued at fair value. The carrying values of fixed asset investments are stated at their fair values, which have been determined with reference to quoted market prices. Traded options contracts are valued at fair value which have been determined with reference to quoted market values of the contracts. The contracts are tradeable on a recognised exchange. For all other short-term debtors and creditors, their book values approximate to fair values because of their short-term maturity.

20.	Commitments, contingencies and post Balance Sheet events
	On 5 November 2007, the European Court of Justice ruled that management fees on investment trusts should be exempt from VAT. HMRC has announced its intention not to appeal against this ruling to the UK VAT Tribunal and therefore protective claims which have been made in relation to the Company will be processed by HMRC in due course.

	The Company has accepted the Manager's offer to refund £284,000 to the Company, representing all VAT charged on investment management fees for the period 1 January 2004 to 30 September 2007; this has been recognised in these financial statements and has been allocated to revenue and capital respectively, in accordance with the accounting policy of the Company for the periods in which the VAT was charged. The amount for earlier periods, any interest due on recoverable amounts (including the period from 1 January 2004 to 30 September 2007) and the timescale for receipt are at present uncertain and the Company has therefore taken no account in these financial statements of any such repayment.

	It is expected that repayments will be made by HMRC to the Manager in respect of VAT which has been charged on the Company's investment management fees in periods prior to 1 January 2004. The Manager has undertaken to pass these amounts on to the Company, including any interest received, without undue delay. The Manager is at present awaiting HMRC's confirmation of the amounts to be received and these are expected to come in two further tranches, one for VAT paid from 2001 to 2003 and the second covering the period from 1990 to 1996. The timing of these payments is not certain, although we would expect the total amount, covering both those earlier periods, to be in excess of £100,000 plus interest, which will, once again, be split in accordance with the prevailing accounting policy.

	The Company has not been charged VAT on its investment management fees from 1 October 2007.

21. The Directors recommend that a final dividend of 6.55p per Ordinary share be paid, making a total of 19.75p for the year ended 31 March 2009 (2008 - 19.75p). The final dividend will be paid on 31 July 2009 to Shareholders on the register at 3 July 2009. The ex-dividend date is 1 July 2009.

22. The income statement, balance sheet, statement of changes in equity and the cashflow statement set out above do not represent full accounts in accordance with Section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2008 has been extracted from the Annual Report and Accounts of the Company which have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified. We expect to deliver statutory accounts for the year ended 31 March 2009 to the Registrar of Companies following the Company's Annual General Meeting which will be held at Trinity House, Tower Hill, London, EC3N 4DH on 3 July 2009 at 12 noon.

23. The Annual Report and Accounts will be posted to shareholders at the start of June 2009 and copies will be available from the registered office of the investment manager.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.

For Shires Income plc

Aberdeen Asset Management PLC, Secretaries

26 May 2009

This information is provided by RNS

The company news service from the London Stock Exchange

END

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