TIDMUKT
RNS Number : 0513D
Threadneedle UK Select Trust Ltd
21 April 2017
Threadneedle UK Select Trust Limited
(the "Company")
Registered No: 475
21 April 2017
Announcement of Annual Results
The information set out in this announcement is the full
unedited Annual Financial Report for the year ended 31 December
2016 (the "AFR") of the Company as approved by the Board of
Directors on 21 April 2017. The AFR is expected to be sent to all
shareholders during May 2017.
Enquiries:
Secretary
JTC Fund Solutions (Guernsey) Limited
Tel: + 44 (0) 1481 702400
Broker
Canaccord Genuity Limited
Andrew Zychowski / Helen Goldsmith
Tel: +44 (0) 20 7523 8000
Threadneedle UK Select Trust Limited
Annual Financial Report for the year ended 31 December 2016
Threadneedle UK Select Trust Limited
Contents
Introductory Information and Investment
Objective 2
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Proposed reconstruction and winding
up 2
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Financial Highlights 3
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Dividends 3
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Directors and Advisers 4
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Chairman's Statement 5
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Investment Manager's Report 7
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The Portfolio 9
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Industry Classification Benchmark
Sector Distribution 10
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Directors' Report 11
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Viability Statement 23
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Statement of Principal Risks and Uncertainties 24
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Directors' Responsibilities Statement 26
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Report of the Audit Committee 27
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Independent Auditor's Report 32
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Statement of Comprehensive Income 39
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Statement of Financial Position 40
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Statement of Changes in Net Assets
Attributable to Shareholders 41
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Statement of Cash Flows 42
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Notes to the Financial Statements 43
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Ten Year Record - Unaudited 60
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Threadneedle UK Select Trust Limited
Introductory information
The ordinary shares of Threadneedle UK Select Trust Limited (the
"Company") have been admitted to the Official List of the UK's
Financial Conduct Authority and to trading on the London Stock
Exchange's Main Market for listed securities.
The Company's share price is published daily under Investment
Companies in the Share Information Section in the Financial Times.
In addition it is published every Monday on the business pages of
The Guernsey Press and the Jersey Evening Post.
Proposed reconstruction and winding up of the Company
On 17 March 2017, the Company released an announcement stating
that it had agreed heads of terms with the board of Henderson High
Income Trust plc ("HHI") and Henderson Investment Funds Limited
("Henderson") in respect of the issue of new ordinary shares in HHI
to the Company's Shareholders who elect to roll over their
investment in the Company, to be effected by way of a members'
voluntary solvent scheme of reconstruction of the Company (the
"Scheme")(the "Proposals"). Under the Scheme, Shareholders will
also be offered the opportunity to exit their investment in the
Company for cash at close to net asset value. The Proposals will be
subject to approval by the shareholders of both companies in
addition to required regulatory and tax approvals. The Board
expects to convene the relevant EGM of the Company in June 2017 and
the Scheme is expected to become effective by the end of June 2017.
The notice of EGM is expected to be sent to all Shareholders in
late May, 2017.
Further details of the Proposals are given in the Chairman's
Statement and the Directors' Report.
Investment objective and policy
The Company's current investment objective is to provide
Shareholders with a total return in excess of the total return on
the FTSE All-Share Index, together with a progressive dividend
policy.
The Company is permitted to invest in any security listed or
quoted on any UK stock exchange provided that no less than 80 per
cent of its gross assets at the time an investment is made are
invested in constituents of the FTSE All-Share Index.
Financial Highlights
31 December 31 December
2016 2015
Net asset value per
share 209.07p 189.40p
Equity Shareholders'
interest (1) GBP46.89m GBP41.94m
Revenue return on ordinary
activities for the financial
year after taxation GBP1.25m GBP0.90m
Capital return on ordinary
activities for the financial
year after taxation GBP4.22m GBP1.41m
Revenue return per
ordinary share 5.61p 4.05p
Capital return per
ordinary share 18.97p 6.40p
Dividend per ordinary
share (2) 4.55p 4.45p
Share Price(3) 182p 166.5p
Net asset value total
return (4) 11.8% 5.7%
FTSE All-Share total
return 16.8% 1.0%
Ongoing charges (5) 1.4% 1.4%
(1) At the start of 2016, the Company held 2,159,026 ordinary
shares in treasury. From the shares held in treasury, 283,555
ordinary shares were issued as scrip dividends during the year.
1,875,471 ordinary shares were held in treasury as at 31 December
2016. These have been held for re-sale in order to satisfy general
market demand and/or to satisfy elections under the scrip dividend
scheme.
(2) The dividend figures include the second interim dividend declared for the year.
(3) Source: Daily Official List mid market closing price.
(4) Source: Datastream/Columbia Threadneedle Investments. Basis:
Gross net income reinvested.
(5) The ongoing charge expense excludes performance fee,
withholding tax and finance costs.
Dividends
Basic earnings per share for the year amounted to 24.58p (2015:
10.45p) and revenue earnings per share for the year amounted to
5.61p (2015: 4.05p). The Board declared an interim dividend of
1.95p per share (six months ended 30 June 2015: 1.90p), which was
paid on 31 October 2016 to Shareholders registered as at close of
business on 19 August 2016.
A second interim dividend in respect of the year ended 31
December 2016 of 2.60p per share has been declared, which will be
paid on Friday, 12 May 2017 to Shareholders registered as at close
of business on Thursday, 16 March 2017 (2015: second interim
dividend 2.55p). This brings the total dividend for the year to
4.55p (2015: 4.45p).
If the proposed reconstruction and winding up of the Company
does not become effective and if the continuation vote required to
be proposed at the Company's next annual general meeting (which
will be held if the reconstruction and winding up proposals do not
become effective) is passed, the Company intends to continue with
the policy of paying two interim dividends per year.
Directors
D J Warr (Chairman), resident in Guernsey, Non-executive
Chairman. He is a fellow of the Institute of Chartered Accountants
in England and Wales and joined the Board in 2006. He is also a
non-executive director of Breedon Group Plc, Acorn Income Fund
Limited, Aberdeen Frontier Markets Investment Company Limited and
Hadrian's Wall Secured Investments Limited.
J G West FCA, resident in the UK, Non-executive and senior
independent director. He joined the Board in 1997. He is a
chartered accountant, who has spent his career in asset management.
He is currently the Chairman of CQS New City High Yield Fund
Limited and a director of a number of public and private companies,
including JP Morgan Income and Capital Trust Plc. He is also
Chairman of Associated British Foods Pension Fund Limited and
former chief executive of Lazard Asset Management Limited.
S A Farnon, resident in Guernsey, Non-executive director and
Audit Committee Chairman. She joined the board in 2012. She is a
chartered accountant and was a banking and finance Partner with
KPMG Channel Islands from 1990 until 2001, Head of Audit KPMG
Channel Islands and a former member of The States of Guernsey
Public Accounts Committee. She is a former Commissioner of The
Guernsey Financial Services Commission and currently a
non-executive director of Ravenscroft Limited, HICL Infrastructure
Fund Limited, Breedon Group Plc, Standard Life Investments Property
Income Trust Limited and Apax Global Alpha Limited.
R P King, resident in Guernsey, Non-executive director and Risk
Committee Chairman. He joined the board in 2014. He is a
non-executive director for a number of open and closed ended
investment funds and companies including Chenavari Capital
Solutions Limited and Weiss Korea Opportunities Fund Limited. Prior
to becoming an independent non-executive director, he worked in the
offshore finance industry specialising in the operational
administration of offshore open and closed ended investment
funds.
Advisers
Secretary, Administrator and Registered Office Registrar
JTC Fund Solutions (Guernsey) Limited Capita Registrars
(Guernsey) Limited
Ground Floor Mont Crevelt House
Dorey Court Bulwer Avenue
Admiral Park St Sampson
St Peter Port Guernsey GY2 4LH
Guernsey GY1 2HT 0870 162 3100
01481 702400
Investment Manager Broker
Threadneedle Asset Management Limited Canaccord Genuity
Limited
78 Cannon Street 88 Wood Street
London EC4N 6AG London EC2V 7QR
020 7464 5000 020 7523 8000
Banker and Custodian Auditor
HSBC Bank plc Deloitte LLP
8 Canada Square Regency Court
London E14 5HQ Glategny Esplanade
020 7991 888 St Peter Port
Guernsey GY1 3HW
Solicitors and adviser 01481 724011
Dickson Minto
Broadgate Tower
20 Primrose St
London EC2A 2EW
020 7628 445
Chairman's Statement
Review of Performance
I am pleased to present your Company's Annual Financial Report
for the 12 months to 31 December 2016.
For the year, the net asset value total return was 11.8% which
compares with the 16.8% total return from the FTSE All-Share Index,
the benchmark against which the Investment Manager's performance is
measured. A more detailed explanation of the investment performance
is provided in the Investment Manager's Report on page 7.
Share Price and Discount
The discount at which the shares trade, relative to their net
asset value, was 12.9% at the end of the year compared with 12.1%
at the start of the year. Following the Company's announcement on
17 March 2017 of a proposed reconstruction and winding up of the
Company the Company's discount has narrowed to 3.2% as at 31 March
2017.
Continuation Vote and the Company's Future
As indicated above, on 17 March 2017, the Company announced that
it had entered into Heads of Terms with the Board of Henderson High
Income Trust plc ('HHI') in relation to a reconstruction and
winding up of the Company (the "Proposals"). Under the Proposals,
UKT shareholders are being offered the opportunity to elect to
receive new ordinary shares issued by HHI and/or to exit their
investment for cash at close to net asset value. The Proposals are
subject to approval by shareholders of both companies in addition
to the required regulatory and tax approvals.
With a Continuation Vote required at the 2017 Annual General
Meeting the Board decided to conduct an extensive review of the
options available with regard to the future of the Company. As a
consequence of this review the Board concluded that it was not in
the interests of shareholders for the Company to continue in
existence as a listed company given its modest market
capitalisation, relatively high ongoing charge ratio and the lack
of liquidity in the Company's shares.
Having reached the above conclusion, the Board then considered
if an orderly wind down of the Company was most appropriate or
whether it was preferable to seek the alternative of rolling over
into a larger, more liquid closed ended company thus offering
shareholders a choice. After considering a number of potential
rollover candidates, the Board concluded that HHI offered a
solution, as outlined above, which would be attractive to
shareholders and an alternative to electing to receive cash.
It is envisaged that a circular and notice of the general
meeting setting out details of the Proposals will be sent to
shareholders in May 2017 with the relevant general meeting likely
to be convened for late June 2017.
Gearing
During the year the Company had a revolving loan facility of
GBP5 million with Lloyds Bank Plc which is more fully described in
note 12 to these Financial Statements. At the year end the Company
had utilised GBP3m of this facility. As explained in note 12 this
facility ceased at the renewal date of 26 March 2017.
Earnings and Dividend per Share
The revenue return per share for 2016 was 5.61p (2015:
4.05p)
A first interim dividend of 1.95p per share in respect of the
financial year 2016 was declared on 13 August 2016 and on 3 March
2017 a second interim dividend of 2.60p per share was declared.
Chairman's Statement (continued)
Annual General Meeting
The Company's Annual General Meeting is scheduled for 17 August
2017 but will be subject to the outcome of the EGM to be held in
late June relating to the proposals referred to above.
Conclusion
Given that the Company has been in existence since 1959 it is
disappointing that the Board has been unable to find an efficient
means by which the Company can maintain its independence. I would
though like to emphasise that the Board have been diligent in their
responsibilities to shareholders and mindful of the Company's
relevance in a changing investment environment and believe that the
Proposals are equitable and in the best interest of
shareholders.
I would like to take this opportunity to thank my Board
colleagues for their commitment over what has been a challenging
period for the Company. I would also like to thank Dickson Minto
for helping guide us to this point and also our Investment Manager
who has remained committed to the task of providing a positive
investment performance.
D J Warr
Chairman
21 April 2017
Investment Manager's Report
Market Background
The FTSE All-Share index delivered a total return of 16.8% in
2016. Large-caps and overseas earners led the rally; the FTSE 100
outperformed the broader index and finished 2016 at new highs. The
energy sector was one of the best performers within the benchmark.
Materials also performed strongly, tracking gains in commodity
prices. However, telecommunications suffered as did real estate
stocks.
In early 2016, domestic and overseas equities were rattled by
low and volatile oil prices, disappointing Chinese economic data
and central banks' actions. Later, market participants focused on
the 'Brexit' referendum. The unexpected result rocked markets but
UK equities subsequently recovered, led by overseas earners as
sterling weakened. Markets also cheered Theresa May's swift
appointment as the new prime minister, and some positive
post-referendum indicators. The Bank of England ("BoE") announced
stimulus measures in August (rate cuts, cheaper bank funding and
more quantitative easing) but later suggested another rate cut in
2016 was unlikely.
In November 2016, the High Court ruled that parliamentary
approval was necessary to invoke Article 50; the government
subsequently appealed to the Supreme Court. The new UK chancellor
announced an increase in infrastructure spending in the Autumn
Statement but also stated that fiscal deficits and government debt
were likely to exceed March's estimates.
Towards year-end, investors turned their attention to politics
elsewhere - notably Donald Trump's unexpected election victory and
Italian voters' rejection of constitutional reforms. Oil recouped
earlier losses as the Organisation of Oil Producing Countries
("OPEC") announced plans to cut output.
Performance Review
In 2016, the portfolio generated a total gross return of 15.0%,
but underperformed its benchmark (the FTSE All-Share) which rose
16.8%.
The fund's relative underperformance was largely attributable to
unfavourable asset allocation decisions. Our overweight in consumer
discretionary stocks and underweight in energy proved particularly
unhelpful. However, our decision to underweight financials and
marginally overweight materials added some value.
Security selection detracted in aggregate, chiefly stock picks
in financials and materials. However, our selections of industrial
and consumer discretionary stocks had a favourable impact on
performance. Therefore, in aggregate, our positions in these
sectors added alpha as the positive effects from stock selection
offset the negative effects from asset allocation.
At the stock level, our decision to exclude Vodafone and Lloyds
Banking Group proved advantageous. Shares of Lloyds were initially
hurt by the government's decision to postpone the sale of its stake
in the bank and later by the Brexit-induced uncertainty. Vodafone's
shares suffered towards year-end due to the sell-off in defensives
following Trump's victory and as investors reacted unfavourably to
the company's announcement that it had sold its fixed-line
operations to Deutsche Telekom. Our holdings in energy company John
Wood Group and miner Rio Tinto added value as the prices of oil and
most other commodities strengthened in 2016.
The zero weights in BP and Glencore proved unhelpful as did the
absence of HSBC when it rallied. We sold HSBC earlier in the year
as we felt that it faced relative diseconomies of scale.
Other detractors included Crest Nicholson, as market sentiment
turned against house builders in the run-up to and aftermath of the
Brexit referendum, and BT. The telecommunications company was
initially hurt by investors' concerns about the scale and speed of
the company's restructuring and later by Brexit-related
concerns.
Investment Manager's Report (continued)
Outlook
While the overall market environment is not changing materially,
we feel that a little more caution is now required as we move into
the post-reporting 'quiet' season in the UK.
The Federal Reserve is clearly on a tightening path which will
ultimately lead to a slowing in the US economy, and the 'Trump
Trade' seems to be tiring as its iconic figurehead appears
incapable of enacting policies while valuations have clearly moved
way ahead of fundamentals.
In the UK, we are now seeing evidence of falling real wage
growth and there are constraints on the ability of consumers to
borrow.
We remain wary of commodities. We are also cautious towards
banks and lending companies; the sector could face headwinds if the
countercyclical capital buffer (which was removed post-Brexit) is
re-imposed. Furthermore, in our view, the BoE will be keen to clamp
down on imprudent lending behaviour.
We are looking at the defensive growth areas of the market for
incremental purchases. These stocks generally have strong track
records of downside protection in unfavourable market conditions
and also offer investors the ability to benefit from the power of
compounding earnings.
A snap UK General Election has been called, which will be held
on the 8th June. Political headlines will continue to create some
volatility in global markets, but this will provide more
opportunities for investors who are willing and able to focus on
long-term fundamentals.
Chris Kinder
Portfolio Manager
Columbia Threadneedle Investments
21 April 2017
The Portfolio as at 31 December, 2016
Market Market
Company Value Company Value
GBP'000 GBP'000
1 Royal Dutch 2,316 43 Berendsen 453
2 Glaxosmithkline 1,983 44 Breedon 434
3 Prudential 1,686 45 Barclays Ordinary 434
4 Imperial Tobacco 1,570 46 Pearson 423
5 Astrazeneca 1,541 47 Bellway 417
6 BT Group 1,488 48 Derwent London 398
Rolls Royce
7 Unilever 1,488 49 Holdings 396
Reckitt Benckiser
8 Group 1,457 50 Grainger 388
9 Legal And General 1,428 51 Inchcape 387
Booker Group
10 Rio Tinto 1,410 52 Plc 361
British American Howden Joinery
11 Tobacco 1,333 53 Group 354
Stagecoach
12 Diageo 1,273 54 Group 328
London Stock
13 Exchange 1,228 55 Greene King 326
14 Reed Elsevier 1,164 56 PZ Cussons 264
Wetherspoon
15 Wood Group John 1,148 57 (JD) 261
Intercontinental
16 Hotels 1,129 58 Headlam Group 248
17 Smith & Nephew 1,082 59 Aggreko 228
18 ITV 1,003 60 Hunting 226
Rolls Royce
19 CRH 966 61 RTS 3
20 GKN 933
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21 Wolseley 933 Total Valuation 48,397
=============
22 Crest Nicholson 891
23 Sage Group 837
24 Johnson Matthey 835
25 Compass Group 814
26 St James's Place 807
27 Carnival 755
28 Rentokil 717
29 BAE Systems 649
RSA Insurance
30 Group 623
31 Merlin Entertainment 618
32 Royal Mail 603
33 Standard Chartered 594
34 Melrose Industries 576
Daily Mail &
35 General Trust 564
36 Smiths Group 549
37 FDM Group 537
38 Burberry 518
39 Smith (DS) 515
Land Securities
40 Group 514
Intermediate
41 Capital Group 510
42 Schroders 483
Industry Classification Benchmark ("ICB") Sector
Distribution
Total Total
2016 2015
Sector Classification % %
------------------------------------- ------ ------
Oil and Gas
Oil and gas producers 4.9 4.8
Oil Equipment, Services
and Distribution 2.9 1.9
7.8 6.7
------------------------------------- ------ ------
Industrials
Construction and materials 4.2 0.9
Aerospace and defence 2.3 3.1
General industrials 2.3 3.0
Industrial engineering - 1.9
Support services 5.7 6.3
Industrial transportation 1.4 1.2
15.9 16.4
------------------------------------- ------ ------
Basic Materials
Chemicals 1.8 1.3
Mining 3.0 2.1
-------------------------------------- ------ ------
4.8 3.4
------------------------------------- ------ ------
Consumer goods
Automobiles and parts 2.0 2.2
Beverages 2.7 2.3
Household goods and home
construction 6.4 6.6
Tobacco 6.3 6.4
Personal goods 4.8 4.5
22.2 22.0
------------------------------------- ------ ------
Consumer Services
Travel and leisure 9.0 9.1
Food and drug retailers 0.8 1.5
General retailers 0.8 -
Media 6.7 5.2
-------------------------------------- ------ ------
17.3 15.8
------------------------------------- ------ ------
Health Care
Pharmaceuticals and biotechnology 7.5 7.5
Health care equipment
and Services 2.3 2.2
9.8 9.7
------------------------------------- ------ ------
Telecommunications
Fixed line telecommunications 3.2 4.6
3.2 4.6
------------------------------------- ------ ------
Technology
Software and computer
services 2.9 3.3
Technology hardware &
Equipment - 0.5
-------------------------------------- ------ ------
2.9 3.8
------------------------------------- ------ ------
Financials
Banks 2.2 4.2
Financial services 4.7 4.1
Real estate investments
& services 0.8 0.9
Real estate investment
trusts 1.9 1.3
Non-life insurance 1.3 1.1
Life assurance 8.4 8.1
19.3 19.7
------------------------------------- ------ ------
Net current liabilities (3.2) (2.1)
-------------------------------------- ------ ------
Net assets 100.0 100.0
====================================== ====== ======
Note: The distribution of investments is based
on the valuations at 31 December 2016 and at
31 December 2015. All of the investments are
listed or quoted on the London Stock Exchange.
Directors' Report
The directors present their report and the annual financial
statements for the year ended 31 December 2016 with comparatives
for the year ended 31 December 2015. The directors confirm that the
annual financial report, 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.
Principal activities
The principal activity of the Company during the year was that
of acting as an investment company. The Company is an authorised
closed-ended investment scheme regulated by the Guernsey Financial
Services Commission under the Protection of Investors (Bailiwick of
Guernsey) Law, 1987, as amended. The Company's ordinary shares have
been admitted to the Official List of the UK Listing Authority with
a premium listing and to trading on the London Stock Exchange's
Main Market for listed securities.
Revenue and dividend
The statement of comprehensive income set out on page 39 shows a
profit for the year amounting to GBP5,472,000 (2015: GBP2,309,000).
The directors have declared a second interim dividend of 2.60p
which, together with the first interim dividend of 1.95p, makes a
total of 4.55p for the year (2015: 4.45p)
The second interim dividend will be paid on 12 May 2017 to
ordinary Shareholders on the register on 17 March 2017 and a scrip
dividend alternative has been offered.
Assets
At the year end, the net assets attributable to the ordinary
Shareholders were GBP46,888,000 (2015: GBP41,940,000). Based on
this figure, the net asset value attributable to each ordinary
share was 209.07p (2015: 189.40p).
Share capital
During the year, no ordinary shares were repurchased by the
Company. The authority allowing the Company to purchase its own
shares expires on the date of the 2017 annual general meeting and
the Board may seek renewal of this authority at that annual general
meeting, subject to the outcome of the extraordinary general
meeting intended to be held in June 2017, further details of which
are given on pages 21 and 22 of this directors' report.
During the year, in the ordinary course of business, 283,555
ordinary shares were issued from the treasury reserve to satisfy
elections by ordinary Shareholders to receive shares in lieu of
cash dividends (2015: 254,894).
Save for issues of treasury shares to satisfy demand for scrip,
issues of treasury shares into the market for cash cannot be made
at a discount to NAV and will be subject to pre-emption rights
unless the Company has shareholder authority to sell such shares
without regard to pre-emption, which authority is sought at each
annual general meeting. For the avoidance of doubt, pre-emption
rights do not apply in respect of the shares issued out of treasury
to satisfy existing Shareholders' elections for scrip.
Further details of the sales of treasury shares are given in
note 14 to the financial statements.
Directors' Report (continued)
Share buyback policy
The Board may from time to time use its share buyback powers
with the objective of narrowing any discount to their underlying
net asset value at which the Company's shares trade in normal
market conditions. However, Shareholders should note that the Board
is not bound to undertake share buybacks and will do so entirely at
its own discretion bearing in mind, inter alia, available cash, the
remaining shareholder authority the Company has to conduct share
buybacks and the ability of the Company to satisfy the statutory
solvency test or any other Guernsey companies law requirements.
There is no guarantee that the Board will decide to exercise its
buyback powers in any particular case or that it will be successful
in achieving its objective.
Substantial shareholdings
As at 31 December 2016, the following had notified the Company
or were recorded on the Company's share register as holding
notifiable interests in the Company's voting rights:
31 March 31 December
2017 2016
Ameriprise Financial Inc 22.13% 22.13%
Mr J.M. & Mrs A.E. Le Pelley 10.59% 10.59%
State Street Nominees Limited 17.30% 17.30%
Huntress (CI) Nominees Limited 10.93% 10.93%
Mr G.E. Green 6.73% 6.73%
Vidacos Nominees Limited 4.69% 4.69%
As at 31 December 2016, there had been no other notifiable
interests in the Company's voting rights reported to the
Company.
Directors
The directors are responsible for the determination of the
Company's investment objective and policy and have overall
responsibility for the Company's activities. The directors have put
procedures in place to ensure that the Company meets current
corporate governance good practices.
Details of the current Board's composition, including each
director's role and other significant commitments, are provided on
page 4.
None of the directors has a contract of service with the Company
and no contract or arrangement in which any director was materially
interested and which was significant in relation to the Company's
business subsisted during or at the end of the year. Furthermore,
the directors are not entitled to any minimum period of notice or
to compensation in the event of their removal as a director.
The directors who served on the Board during the year, together
with their beneficial interests and those of their spouses and
dependent children as at 31 December, 2015 and 2016 were as
follows:
31 December, 31 December,
2016 2015
Shares Shares
D.J. Warr 152,688 148,652
S.A. Farnon (2015: S.A Farnon
and as Executor of CRW Best) 120,737 94,954
R.P. King - -
J.G. West 34,584 34,584
Directors' Report (continued)
Directors (continued)
There have been no changes in the current directors' interests
in the shares of the Company between 31 December 2016 and 31 March
2017.
Gearing
The Company previously entered into a GBP5 million revolving
loan facility agreement with Lloyds Bank Plc, which expired on 26
March 2017. The facility was used during the year under review to
gear the Company's investment portfolio, with the aim of enhancing
returns to Shareholders, and the Board sought to target a level of
borrowing approximately equal to 10% to 20% of the Company's net
asset value. Interest accrued on the loan at 1.1% over LIBOR and it
was repayable at the option of the Company. A non-utilisation fee
of 0.39% per annum was payable on any portion of the facility not
drawn down.
After the year end and in light of the proposed reconstruction
and potential winding up of the Company, the Board agreed that it
would not be in the Company's best interests to incur the costs of
renewal of the loan facility and accordingly the loan was repaid
when the loan facility expired on 26 March 2017.
Corporate governance
a) Statements of compliance
The UK Financial Conduct Authority's Disclosure Guidance and
Transparency Rules require all overseas companies with a premium
listing (which includes the Company) to include a corporate
governance statement in its directors' report, which must contain a
reference to the corporate governance code to which the Company is
subject and / or the corporate governance code which the Company
may have voluntarily decided to apply and / or all relevant
information about the corporate governance practices applied beyond
the requirements under the Company's own national law.
The Association of Investment Companies (the "AIC"), of which
the Company is a member, has published its Code of Corporate
Governance for Investment Companies dated February 2015 (the "AIC
Code") and the Corporate Governance Guide for Investment Companies,
also dated February 2015 (the "AIC Guide"), which incorporates the
UK Financial Reporting Council's (the "FRC") UK Corporate
Governance Code and the AIC Code. The FRC has confirmed that "it
remains our view that by following the AIC Corporate Governance
Guide boards of investment companies should fully meet their
obligations in relation to the UK Corporate Governance Code and
Paragraph 9.8.6 of the Listing Rules."
The Board has considered the principles and recommendations of
the AIC Guide. The AIC Code, as explained by the AIC Guide,
addresses all the principles set out in the UK Corporate Governance
Code, as well as setting out additional principles and
recommendations on issues that are of specific relevance to the
Company. The Board considers that reporting against the principles
and recommendations of the AIC Code will provide better information
to Shareholders.
The directors believe that the Company has complied with the
provisions of the AIC Code, where appropriate, and that it has
complied throughout the year with the provisions where the
requirements are of a continuing nature.
Directors' Report (continued)
Corporate governance (continued)
a) Statements of compliance (continued)
The Board has noted the publication by the AIC of an updated AIC
Code of Corporate Governance and Corporate Governance Guide in July
2016 (the "Updated AIC Code & Guide") following the FRC's
publication of an updated version of the UK Corporate Governance
Code in April 2016, which applies to accounting periods beginning
on or after 17 June 2016. The directors have put in place further
measures designed to ensure compliance with the Updated AIC Code
and Guide and, if the Company continues in its current form into
2018, the Board expects to report against the Updated AIC Code and
Guide in the next annual financial report for the year ended 31
December 2017.
On 30 September 2011, the Guernsey Financial Services Commission
published its Finance Sector Code of Corporate Governance (the
"GFSC Code"), which came into effect on 1 January 2013. The GFSC
Code provides a framework which applies to all regulated companies
in the finance sector in Guernsey. The GFSC Code deals with
governance issues under several topics including the Board,
accountability, risk management, disclosure and reporting,
remuneration and Shareholder relations. Companies which report
against the AIC Code are deemed to meet the requirements of the
GFSC Code.
b) The Board
The Company is led and controlled by a Board comprising
non-executive directors, all of whom have wide experience and are
considered to be independent. The Board believes that it is in the
Shareholders' best interests for the Chairman, Mr Warr, and the
senior independent director, Mr West, to be the two primary points
of contact for all matters relating to the governance of the
Company.
The appointment of directors is considered by the Board who sit
on the Nomination Committee, further information on which is given
below.
The Board meets regularly, normally quarterly, with additional
meetings should it be considered appropriate to discuss specific
issues. The table below lists the number of Board and Committee
meetings attended by each director during the year ended 31
December 2016.
Scheduled Other Audit Nomination Risk *M.E.&
Board Board Committee Committee Committee R. Committee
------------- ---------- ------- ----------- ----------- ----------- --------------
Number of
Meetings 4 8 4 1 4 1
------------- ---------- ------- ----------- ----------- ----------- --------------
D.J. Warr 4 7 4 1 4 1
------------- ---------- ------- ----------- ----------- ----------- --------------
J. G. West 4 0 4 1 4 1
------------- ---------- ------- ----------- ----------- ----------- --------------
S.A. Farnon 4 7 4 1 4 1
------------- ---------- ------- ----------- ----------- ----------- --------------
R.P. King 4 6 4 1 4 1
------------- ---------- ------- ----------- ----------- ----------- --------------
*Management Engagement and Remuneration Committee.
During the year the Board held eight ad hoc meetings at short
notice to deal with various operational matters. Because of the
short notice and the cost to Shareholders which would ensue if Mr
West attended, such meetings were held between the
Guernsey-resident directors, with Mr West making his views on any
proposals known to the Board in advance of such meetings whenever
possible.
The Company did not employ any personnel.
Directors' Report (continued)
Corporate governance (continued)
c) Committees
The Board has an Audit Committee chaired by Mrs Farnon, a
separate report from such committee being provided below, and the
Board also has a Nomination Committee chaired by Mr Warr. The Board
has also created a Management Engagement and Remuneration
Committee, chaired by Mr Warr. As part of its compliance with the
Alternative Investment Fund Managers Directive (the "AIFMD"), as
implemented by the FCA, the Board maintains a Risk Committee under
the chairmanship of Mr King.
d) Nomination Committee, Board Composition and Succession
Planning
In addition to conducting an evaluation on the composition of
the Board, in terms of size, skills and expertise, a formal
evaluation of the Board's own performance, as well as its
Committees, is undertaken annually by the Nomination Committee. The
Nomination Committee consists of all non-executive directors.
The objectives of Board planning in terms of its composition and
succession are to ensure that the Board collectively comprises of
fit and proper individuals with the capability to direct the
Company in the best interests of its Shareholders. All new
directors are provided with an induction by the Secretary and the
Board.
The Board currently consists of four non-executive directors,
all of whom are independent of the Investment Manager. Mr Warr and
Mr West have served on the Board for more than nine years. Under
the AIC Code, Mr Warr and Mr West are not considered to be fully
independent by reason of their appointment as directors of the
Company for more than nine years. However, the Board takes the view
that they are independent in judgement and character. Therefore the
Board has resolved that all directors will stand for re-appointment
at each AGM, so that the Shareholders have the opportunity to
consider each director's continuing involvement with the
Company.
Directors' fees are recommended by the full Board. The
emoluments of the directors for the year, with comparative figures
for 2015, were as follows:
2016 2015
Fees Fees
GBP GBP
D.J. Warr 36,000 32,250
S.A. Farnon 27,000 27,000
R.P. King 27,000 18,710
J.G. West 24,000 24,000
J.M. Le Pelley (retired 29 May
2015) - 12,340
--------
114,000 114,300
-------- --------
The figures above represent emoluments earned as directors
during the relevant financial year, which are paid quarterly in
arrears. The directors receive no other remuneration or benefits
from the Company other than the fees stated above. The directors
are paid out of pocket expenses for attendance at Board meetings
and for any other expenditure they incur when acting on the
Company's behalf.
Directors' Report (continued)
Corporate governance (continued)
e) Management Engagement and Remuneration Committee
The Management Engagement and Remuneration Committee consists of
all non-executive directors and meets when necessary, usually at
least annually. The Committee has been delegated the responsibility
for monitoring, reviewing and making recommendations to the Board
on all aspects of the management and administration of the
Company's assets and corporate records and other ancillary services
provided by each of Threadneedle Asset Management Limited, JTC Fund
Solutions (Guernsey) Limited, Canaccord Genuity Limited, Capita
Asset Services and HSBC Bank Plc, as well as any other significant
or long-term service providers. The Management Engagement and
Remuneration Committee also makes recommendations to the Board on
any proposed variation of the terms of the Investment Management
Agreement and any relevant agreement with any other service
provider which the Committee considers necessary or desirable.
The Committee is authorised to seek any information it requires
from any employee or agent of the Company in order to perform its
duties. All agents of the Company are directed to co-operate with
any reasonable request made by the Committee.
The Committee is authorised by the Board to obtain, at the
Company's expense, outside legal or other professional advice on
any matters within its terms of reference if it considers
necessary.
f) Risk Committee
As stated above, the Board has a Risk Committee under the
chairmanship of Mr King as part of its compliance with the
AIFMD.
The principal function of the Risk Committee is to review on a
continual basis the Company's risk management systems, which allow
the Company to identify, measure, manage and control investment
risks and other related risks to which the Company may be exposed.
The Committee receives regular risk management reporting from the
Investment Manager and also meets regularly with the Administrator
to discuss matters relevant to its oversight duties. This Committee
has a responsibility to provide such reporting as requested by the
Audit Committee to enable the Audit Committee to review the
effectiveness of the Company's risk management function.
g) Committees' Terms of Reference
The Terms of Reference for all Committees are available for
inspection at the Company's registered office during normal
business hours.
h) Relations with shareholders
All Shareholders are encouraged to participate in the Company's
annual general meeting (the "AGM") and any such extraordinary
general meetings (each an "EGM") as may be convened from time to
time to consider specific proposals. All directors and one or more
representatives of the Investment Manager normally attend the AGM,
at which Shareholders have the opportunity to ask questions and
discuss matters with the directors and the Investment Manager. All
directors normally attend EGMs.
It is recognised that the AIC Code requires notices of AGMs to
be despatched at least 20 working days before the meeting. The
Company will continue to comply with this provision in 2017 should
the 2017 AGM be convened.
Directors' Report (continued)
Corporate governance (continued)
i) Accountability and audit
a) Statement of going concern
In the opinion of the directors, the Company has adequate
resources to continue in operational existence for the foreseeable
future. For this reason the financial statements have been prepared
using the going concern basis.
The directors have arrived at this opinion by considering, inter
alia, the following factors:
-- The values of the Company's assets were as at 31 December
2016 and as at the date of this report greater than the values of
its liabilities;
-- The Company had sufficient liquidity to meet all on-going expenses as at 31 December 2016;
-- The portfolio of investments held by the Company consists
mostly of listed investments which are readily realisable and
therefore the Company expects, in the event that insufficient
income is received to meet its operating expenses, to be able to
realise sufficient investments for cash to meet its liabilities as
they fall due; and
-- As at 31 December 2016, the Company had GBP3 million of
external borrowings. The loan facility expired on 26 March 2017, on
which date the entire amount outstanding under the facility,
together with all accrued interest thereon, was repaid, so the
Company now has no external borrowings, nor any other form of
material financial indebtedness.
In accordance with the Company's Articles of Incorporation the
Shareholders are due to have an opportunity to vote on the
Company's continuation at the 2017 AGM. However, that vote will not
be required and the 2017 AGM not held, if the proposals in relation
to the reconstruction and winding up of the Company to be put to
Shareholders at the EGM expected to be held in late June 2017 are
approved and become effective. This creates a material uncertainty
on going concern which is further explained in this director's
report, note 2b of the financial statements as well as in the
separate long-term viability statement included later in this
annual financial report.
b) Internal controls
The directors acknowledge that they are responsible for
establishing and maintaining the Company's system of internal
controls and reviewing its effectiveness. Internal control systems
are designed to manage rather than eliminate the failure to achieve
business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss. They have
therefore established an ongoing process designed to meet the
particular needs of the Company in managing the risks to which it
is exposed, consistent with the guidance provided by the AIC. Such
review procedures have been in place throughout the financial year
and up to the date of the approval of this annual financial
report.
The Board has contractually delegated to Threadneedle Asset
Management Limited the management of the Company's investments. The
Investment Management Agreement between the Company and the
Investment Manager sets out the matters over which the Investment
Manager has authority and the limits above which Board approval
must be sought. Other matters reserved for the approval of the
Board include the annual financial report, communications with
Shareholders (other than monthly factsheets produced by the
Investment Manager) and decisions on strategy.
The Company's investments are held in safe custody by HSBC Plc.
JTC Fund Solutions (Guernsey) Limited has been contracted to
provide the Company's administration, secretarial and accounting
functions and Capita Registrars (Guernsey) Limited provides its
share registration, transfer agency and paying agency functions.
The Management Engagement and Remuneration Committee regularly
reviews the performance of the services provided by these
companies.
Directors' Report (continued)
Corporate governance (continued)
i) Accountability and audit (continued)
b) Internal controls (continued)
The Investment Manager and JTC Fund Solutions (Guernsey) Limited
maintain their own systems of internal controls, on which they have
reported to the Board. The Company, in common with other investment
companies, does not have an internal audit function.
The systems are designed to ensure effectiveness and efficient
operations, internal control, and compliance with laws and
regulations. In establishing the systems of internal control,
regard is paid to the materiality of relevant risks, the likelihood
of costs being incurred and costs of control. It follows therefore
that the systems of internal control can only provide reasonable
but not absolute assurance against the risk of material
misstatement or loss.
There are well established budgeting and forecasting procedures
in place and reports are presented to the Board detailing variances
against budget and prior year and other performance data. The
effectiveness of the internal control systems is reviewed annually
by the Board and the Audit Committee. The Audit Committee has a
discussion at least annually with the Company's auditor to ensure
that there are no unknown issues of concern in relation to the
audit opinion on the accounts and, if necessary, representatives of
the Investment Manager or the secretary and Administrator would be
excluded from those discussions.
The Board regularly takes steps to embed internal controls and
risk management further into the operations of the Company and to
deal with areas of improvement which come to the Board's attention.
In December, 2015 the directors visited the Investment Manager's
office to review the operations and processes of the Investment
Manager and to discuss such systems with relevant members of staff.
This visit included a detailed review of the internal controls,
risk management and investment selection process on behalf of the
Company.
The Board concluded that it was satisfied with the Investment
Manager's internal control systems at that time and no matters of
concern have since come to the Board's attention.
Investment objective and policy
The Company's investment objective is to provide Shareholders
with a total return in excess of the total return on the FTSE
All-Share Index, together with a progressive dividend.
The Company is permitted to invest in any security listed or
quoted on any UK stock exchange provided that no less than 80 per
cent of its gross assets at the time an investment is made are
invested in constituents of the FTSE All-Share Index.
There are no minimum or maximum limits on the number of
investments in the portfolio but it is expected that the portfolio
will generally comprise shares and securities in 50 to 90
companies. The Company seeks to manage risk in part through heeding
the following investment restrictions:
-- The top five holdings in the Company's portfolio may not
exceed 40 per cent of the total value of the portfolio.
-- The top three Industry Classification Benchmark ("ICB")
sectors represented in the portfolio may not exceed 50 per cent of
the total value of the portfolio.
-- The securities of no one company may represent more than 10
per cent of the value of the Company's portfolio measured at the
time of acquisition and subsequently, when additions are made to
the holding.
-- The Company will not hold more than 5 per cent of the issued
share capital (or voting shares) in any one company.
Directors' Report (continued)
Investment objective and policy (continued)
While the Company may hold shares in other investment companies
(including investment trusts), the Company will not invest more
than 10 per cent in aggregate, of the value of its total assets in
other listed closed-ended investment funds (save to the extent that
such closed-ended investment funds have published investment
policies to invest no more than 15 per cent of their total assets
in such other listed closed-ended investment funds).
No material changes to the Company's investment objective and
policy will be made without the sanction of an ordinary resolution
passed by a simple majority of the Company's shareholders in
general meeting. If the proposed reconstruction and winding up
becomes effective, Shareholders who elect to rollover their
shareholding in the Company will, following implementation of the
proposals, be invested in a Company with a different investment
objective and policy to the Company's current investment objective
and policy. The proposals to be voted upon by shareholders at the
EGM to be held in late June 2017 are explained later in this
directors' report.
Cash
The Company intends to be fully invested in normal market
conditions, but may hold up to 20 per cent of net asset value in
cash on deposit (or in short-term money market instruments) during
periods in which the Investment Manager believes markets are
overvalued or expects them to fall.
Gearing
Gearing may be used selectively in order to leverage the
Company's portfolio to enhance returns where the Board in
conjunction with the Investment Manager considers it appropriate to
do so. The Company's gearing stood at 6.40% as at 31 December 2016
(2015: 7.15%). Since the expiry of the revolving loan facility with
Lloyds Bank Plc on 26 March 2017 and repayment of the outstanding
balance, the Company has no external borrowings.
Derivatives
Subject to the Board's prior approval, the Investment Manager is
permitted to invest in options and other derivatives for the
purposes of efficient portfolio management only.
Investment Process, Implementation of Investment Policy and
Continued Appointment of the Investment Manager
The Investment Manager's investment approach is driven by stock
selection, with a focus on risk and reward. Reward is derived from
valuation and profit opportunity. In terms of risk, it is the level
of business risk rather than index weight that determines position
size in the portfolio, with portfolio risk minimised through
diversification. Considerable emphasis is placed on identifying
companies which are well managed, have sustainable franchises,
strong balance sheets and cash flow generation, and which trade on
attractive valuations relative to peers and history.
During the year under review, the assets of the Company were
invested in accordance with the Company's investment policy.
Further details of the performance of the Company and the extent to
which the Company's objectives were achieved can be found in the
Chairman's Statement and Investment Manager's Report.
The Company's portfolio consisted of 61 investments, primarily
UK issuers, as at 31 December 2016. The top 10 holdings comprised
34.91% of total net assets (2015: 32.68%).
The Company's financial instruments comprise investments, cash
and various items such as debtors, creditors etc. that arise
directly from the Company's operations. The main purpose of these
instruments is the investment of Shareholders' funds.
Directors' Report (continued)
Investment Process, Implementation of Investment Policy and
Continued Appointment of the Investment Manager (continued)
The investment strategy of the Company was delegated to the
Investment Manager under an agreement dated 27 July 2012, which
agreement was amended and restated on 23 September 2014. The
Investment Manager operates within agreed parameters and the Board
monitors its performance on a regular basis.
As required by Listing Rule LR 15.6.2(2), the directors confirm
that, having reviewed the performance of the Investment Manager
during the year under review and up to the date of this report,
they are of the opinion that the continuing appointment of the
Investment Manager on the terms agreed is in the interests of
shareholders as a whole. However, in the light of the proposed
reconstruction and winding up of the Company, the Company has
served notice on the Investment Manager, such termination of
appointment to be effective from 11.59 p.m. on 27 June 2017 or such
later date as the scheme of reconstruction and winding up shall
become effective.
The Alternative Investment Fund Managers Directive ('AIFMD')
The AIFMD, which was required to be transposed by EU Member
States into national law by 22 July 2014, seeks to regulate
alternative investment fund managers ('AIFMs') established in the
EU and prohibits such managers from managing any alternative
investment fund (an 'AIF') or marketing shares in such funds to
investors in the EU unless the AIFM has been authorised.
Following implementation of the AIFMD by H.M. Treasury in the
United Kingdom, the Company elected to be a self-managed AIF and
accordingly notified both the FCA in the UK and the Guernsey
Financial Services Commission in May 2014. In deciding on the
self-managed option, the Board was mindful that the reporting
requirements and consequential costs of so doing were less than
would have been the case if the Investment Manager had been
appointed as the AIFM and therefore considered this approach to be
both practical and cost effective. The Board remains of this
opinion as of the date of this report.
As the Company has notified the FCA, the Company is able to
continue marketing its shares into the UK under the UK's National
Private Placement Regime.
The Board has implemented the necessary measures to facilitate
compliance with AIFMD, which included the establishment of the Risk
Committee. The Board have also implemented policies and risk based
controls to monitor both the investment and operational risks that
impact the Company. The Risk Committee meets each quarter and
receives monthly reporting on the risks associated with the
management of the investment portfolio.
The Board is cognisant of the European Union's ongoing
discussions regarding, inter alia, passporting arrangements for
AIFs and ESMA's recommendations as regards to so called "third
countries", i.e. non-EU member states. The Board and its advisers
monitor developments to ensure continued compliance and to ensure
that any potential opportunities are not missed, although progress
with passporting for companies incorporated in certain third
countries, including Guernsey, has been delayed by the UK's vote to
leave the European Union and it cannot yet be forecasted when such
passporting might be possible.
Retail Distribution
On 1 January 2014, the UK's Financial Conduct Authority (the
"FCA") introduced rules relating to the restrictions on the retail
distribution of unregulated collective investment schemes and close
substitutes (non-mainstream pooled investments). UK investment
trusts are excluded from these restrictions, as are other "excluded
securities" as defined by the FCA.
Directors' Report (continued)
Retail Distribution (continued)
As reported in last year's annual report, the Board believes
that the Company's shares are "excluded securities" under category
(a) of the FCA's definitions of such and, as a result, the FCA's
restrictions on retail distribution do not apply. This status is
reviewed regularly and the Board intends to conduct the Company's
affairs to retain such status for the foreseeable future, subject
to the restructuring proposals to be voted upon in June, 2017.
Taxation, FATCA and the OECD's Common Reporting Standard
The Company has been granted exemption by States of Guernsey
Income Tax from Guernsey income tax and Guernsey levies no other
relevant taxes on the Company, such as capital gains tax or
inheritance tax. Although the Company cannot provide taxation
advice and all Shareholders are responsible for their own taxation
affairs, the Company does monitor relevant developments and has
taken action to ensure compliance, including registration under the
United States' Foreign Account Tax Compliance Act ("FATCA") and the
appointment of Capita Asset Services as its agent to collate and
report relevant data under FATCA and the Common Reporting Standard
of the Organisation for Economic Co-operation and Development (the
"OECD"). The Board takes advice from independent tax advisers when
deemed necessary or desirable.
Auditor
Deloitte LLP has expressed its willingness to continue in office
as auditor and, if the Company is required to have its accounts for
the year ended 31 December 2017 audited, a resolution to re-appoint
them will be proposed at the forthcoming AGM, should it be
held.
Disclosure of information to the auditor
As at the date of approval of the financial statements, the
directors confirm that:
-- so far as they are aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- they have taken all steps they ought to have taken as
directors to make themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 249 of The Companies
(Guernsey) Law, 2008, as amended.
Extraordinary General Meeting and Annual General Meeting
As announced on 17 March 2017, being cognisant of the
continuation vote required by the Company's articles to be proposed
at the 2017 AGM and taking account of Shareholders' views, the
Board spent a considerable amount of time reviewing the options
available to grow the Company to a credible and sustainable size
and to reduce the consistent discount to their prevailing net asset
value at which the Company's shares have traded. Having undertaken
a thorough review of the options, the Board reached the conclusion
that Shareholders would be unlikely to support the continuation of
the Company in its current form and that it would be in the
Company's and Shareholders' best interests to propose either an
orderly wind down of the Company or the alternative of rolling over
into a larger, more liquid closed ended company. The Board
undertook a review of potential rollover candidates and, following
a beauty parade process with a shortlist of suitable candidates,
decided to recommend a reconstruction and winding up of the Company
with Henderson High Income Trust plc ("HHI") as the Company's
rollover option (the "Proposals").
Directors' Report (continued)
Extraordinary General Meeting and Annual General Meeting
(continued)
The Board has agreed heads of terms with the Board of HHI and
Henderson Investment Funds Limited ("Henderson"), the investment
manager of HHI, in relation to the Proposals. Under the Proposals,
Shareholders will also be offered the opportunity to exit their
investment for cash at close to net asset value if they do not wish
to rollover their investment into HHI.
The Proposals will, in addition to required regulatory and tax
approvals, be subject to approval by the Shareholders of both
companies and the Board intends to publish a circular including a
notice of the EGM at which Shareholders will be asked to approve
the Proposals, in late May 2017. The Board is of the opinion that
the Proposals are in the best interests of Shareholders and intends
to recommend that Shareholders vote in favour of the Proposals.
In the event that the Proposals are not approved by Shareholders
at the EGM, the Board will convene the 2017 AGM to be held on or
around 17 August 2017, at which, as required by the Company's
articles of incorporation, a resolution for the continuation of the
Company will be proposed.
By order of the Board
D J Warr S A Farnon
21 April 2017
Viability Statement
C.2.1 and C.2.2 of the UK Corporate Governance Code and AIC
principle 21 recommends that companies publish a viability
statement and this statement is intended to meet that
requirement.
The directors regularly assess the viability of the Company and
consider the Company's current financial position and the principal
risks to which it is exposed. Those risks are described in more
detail in the statement of Principal Risks and Uncertainties below
and in the notes to the financial statements.
The directors have assessed the principal risks and, together
with the Investment Manager, have adopted procedures and strategies
to mitigate these risks. The Investment Manager has an established
investment management policy and set of procedures that limits the
various elements of portfolio risk, including exposure to any one
particular security, sector, asset class or geographical area. The
Investment Manager regularly updates the directors on the Company's
portfolio and the overall status of the market. The directors
perform a solvency test before any dividend is declared. In
performing its viability analysis, the Board has made the
assumption that interest rates in most developed economies will
remain relatively low and that global growth will show steady but
modest improvement over the foreseeable future.
The Board also monitors cash flow and liquidity at each regular
meeting, as well as monitoring the Company's total expense ratio to
ensure that its operating costs are reasonable in the current
market environment and do not exceed materially those of its
competitors. The Company is primarily invested in large cap, liquid
issuers, which under normal trading conditions ensures that it can
realise its investments to raise cash and meet its expenses when
they fall due. As a result, the directors are confident that the
Company will be able to continue in operation and has sufficient
assets to meet its liabilities as they fall due over the next three
years. However, as referred to in the Chairman's Statement and
Directors' Report the Board intends to convene an EGM for late June
2017 at which Shareholders will be asked to approve a proposed
reconstruction and winding up of the Company. If approved, the
Company will be placed into voluntary winding up as at the date of
the EGM.
Further to the above, if the reconstruction and winding up
proposals are not approved or are approved but not subsequently
implemented, the Board is obliged under the Company's articles of
incorporation to propose a continuation resolution to Shareholders
at the 2017 AGM. If that continuation resolution is not passed, the
directors will be required to formulate alternative proposals for
the Company, which may or may not involve the restructuring or
winding up of the Company, for submission to the Company's
Shareholders.
In light of the above, the Directors, having considered the
risks facing the Company, their mitigation and the strategy of
holding large Cap investments that are realisable on any normal
trading day, have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall
due over the three-year period of their assessment. However, as
stated above and in more detail in the Chairman's Statement, the
proposed reconstruction and winding up of the Company is
recommended by the directors. If the proposed reconstruction and
winding up is approved at the forthcoming EGM then the Company will
be placed into voluntary winding up. However, if the proposals are
not approved, the company remains a going concern and is viable
subject then to a continuation vote at the AGM to be held on or
around 17 August 2017.
Statement of Principal Risks and Uncertainties
The risks detailed below are considered by the Board to be the
principal risks relating to an investment in the shares of the
Company but are not the only risks relating to the Company.
Additional risks and uncertainties of which the Company is
presently unaware or that the Company currently believes are
immaterial may also adversely affect its business, financial
status, operating capabilities or the value of the shares.
The Board has undertaken a robust assessment of the principal
risks which may affect the Company, including those that would
threaten its business model, future performance, solvency or
liquidity. The Board has adopted a controls based approach to its
risk monitoring requiring each of its service providers, including
the Investment Manager, to establish the necessary controls to
ensure that all known risks are monitored and managed in accordance
with agreed procedures. The Board receives periodic updates at
their board meetings on key risks and have adopted their own
control review to ensure, where possible, that risks are monitored
appropriately.
Investment Risk
The Board has considered how the Company is exposed to the UK
market conditions and investment selection risk that may impact on
the portfolio and its potential failure to perform in accordance
with the Company's investment objective and policy, where markets
move adversely or if the Investment Manager fails to comply with
the investment policy. The Board reviews reports from the
Investment Manager each month and at each quarterly Board meeting,
with a focus on the investment performance of the portfolio on a
risk based approach. The liquidity of the portfolio is monitored as
part of this review. The Board also considers the level of gearing
that is being utilised in the management of the investment
portfolio, which also includes a review of interest rate risk, and
believes that this currently has minimal impact on the Company's
investment portfolio.
The Company does not undertake any currency or interest rate
hedging.
Tax, legal and regulatory risk
The Company is exposed to tax, legal and regulatory changes,
which may impact on how the portfolio is managed, distributions are
made to investors and future marketing opportunities. There is also
the risk that it may fail to maintain accurate accounting records
and meet its obligations as a publicly listed company. The
Administrator, Broker and Investment Manager provide regular
updates to the Board on compliance with regulatory requirements and
changes in applicable law and regulations.
Dependence on the Investment Manager
The Company is dependent on the ability of the Investment
Manager to manage the portfolio in accordance with the agreed
mandate and retain the necessary staff to ensure the appropriate
investment selection is made within a risk controlled environment.
The directors meet with the Investment Manager periodically to
ensure an appropriate level of expertise is maintained.
Share Price Discount
The Company is exposed to Shareholder dissatisfaction owing to
the challenge in influencing the share price discount to NAV. The
Board in conjunction with the Company's Broker monitors share price
discount (and premium) continually and has instructed share
buy-backs from time to time to help reduce any such discount. The
Board believes that it has access to sufficiently liquid assets to
support share buy backs as determined from time to time.
Statement of Principal Risks and Uncertainties (Continued)
Stability of Income Generation
The Company has historically provided a consistent income return
to Shareholders but, owing to changing income on the underlying
investment portfolio, there is a risk that insufficient income will
be generated to maintain future dividend payments. The Board
monitors income levels closely and also has the ability to utilise
capital returns to finance dividends.
Operational Risk
The Company is exposed to the risk arising from any failures of
systems and controls in the operations of the Investment Manager,
Administrator, Custodian and other service providers appointed by
the Company. The Board and its Committees regularly review reports
from the Investment Manager and the Administrator on their internal
controls. The Administrator will report to the Investment Manager
any valuation issues which will be brought to the Board for final
approval as required. The Management Engagement Committee performs
an annual review of the Investment Manager and also other service
providers as appropriate. The last review of the Investment Manager
was in January 2017, at which time the Management Engagement and
Remuneration Committee and the Board reviewed the performance and
fees of all service providers. The Board agreed that the
performance of all service providers was satisfactory and that no
change of service provider was either necessary or desirable at
that time. However, if the proposed reconstruction and winding up
of the Company is approved by Shareholders at the EGM expected to
be held in late June 2017, the Company will, at that meeting, be
placed into voluntary winding up and the appointments of all
service providers will be terminated either immediately or shortly
thereafter.
Financial Risks
The financial risks, including market, credit interest,
currency, investment concentration and liquidity risk faced by the
Company are set out in note 17 of the Annual Financial Report on
pages 55 to 58. The controls in place to reduce the financial risks
are reviewed by the Board at the quarterly board meetings.
Fraud Risk
The Company is exposed to fraud risk. The Audit Committee
continues to monitor the fraud, bribery and corruption policies of
the Company. The Board receives a confirmation from all service
providers that there have been no instances of fraud or
bribery.
Directors' Responsibilities Statement
The directors are responsible for preparing the annual financial
report in accordance with applicable law and regulations.
The Companies (Guernsey) Law, 2008 (the "Companies Law")
requires the directors to prepare financial statements for each
financial year. Under the Companies Law the directors have elected
to prepare the financial statements in accordance with
International Financial Reporting Standards ("IFRS").
Under the Companies Law the directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period. In preparing
these financial statements, International Accounting Standard 1
requires that the directors:
-- properly select and apply accounting policies;
-- 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's are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
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 Law. They are
also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Guernsey and the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
To the best of the knowledge of the directors:
The financial statements, which have been prepared in accordance
with International Financial Reporting Standards, give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Company;
The Chairman's Statement, Investment Manager's Report and Notes
to the Financial Statements are incorporated herein by reference
and include a true and fair review of the development and
performance of the Company and a description of the principal risks
and uncertainties that it faces, as required by DTR 4.1.8 of the
Disclosure and Transparency Rules; and
The annual report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for Shareholders to assess the Company's performance,
business model and strategy.
By order of the Board
D J Warr S A Farnon
21 April 2017
Report of the Audit Committee
Role and responsibility
This is the report of the Audit Committee which has been
prepared with reference to the AIC Code and describes the work of
the Committee in discharging its responsibilities.
The Company has established an Audit Committee in compliance
with the Financial Conduct Authority's (FCA's) Disclosure and
Transparency Rule 7.1 and the AIC Code, which reports formally
twice each year to the main Board. It has formally delegated duties
and responsibilities within written terms of reference which are
reviewed and reapproved annually.
The Audit Committee is mandated by the Board to investigate any
activity within its terms of reference and to consult externally
with legal or other independent professional advisers, as required,
to ensure that the Committee adequately discharges its duties and
responsibilities, which include:
a) consider and make recommendations to the Board concerning the
appointment, re-appointment and removal of the External Auditor and
assess the independence and objectivity, effectiveness and
performance of the External Auditor in accordance with the AIC
Corporate Governance Code requirements;
b) oversee the process for selecting the External Auditor and
make appropriate recommendations through the Board for the
Shareholders to consider at the annual general meeting;
c) review annually the terms of the External Auditor's
engagement letter and their proposed remuneration. To make
recommendations to the Board regarding the annual external audit
fee;
d) discuss with the External Auditor, before the audit
commences, the nature and scope of the audit (or any review of the
interim financial statements which might in future be requested)
and to review the Auditor's Audit Plan, quality control procedures
and steps taken by the External Auditors to respond to changes in
regulatory and other requirements;
e) develop and implement policy on the engagement of the
External Auditor to supply non-audit services, taking into account
relevant ethical guidance regarding the provision of non-audit
services by the external audit firm; and report to the Board,
identifying any matters in respect of which it considers that
action or improvement is needed and making recommendations as to
the steps to be taken;
f) review and challenge where necessary, in relation to the
half-yearly and annual financial reports before submission to the
Board, paying particular attention to:
-- Any changes in accounting policies and practice;
-- Major judgmental areas;
-- Significant adjustments arising from the audit;
-- The going concern and long term viability assumption;
-- Compliance with accounting standards (and in particular
accounting standards adopted in the financial year for the first
time);
-- Compliance with applicable legal and regulatory requirements
(including inter alia, those of the Financial Conduct Authority,
the London Stock Exchange, the Guernsey Financial Services
Commission and The Companies (Guernsey) Law, 2008, as amended);
and
-- Compliance with the AIC Code of Corporate Governance;
g) discuss problems and reservations arising from the final
audit, and any other matters which the auditor may wish to discuss
(in the absence of the Company's agents where necessary);
h) review the External Auditor's Report to the Audit Committee and any response thereto;
Report of the Audit Committee (continued)
Role and responsibility (continued)
i) review on behalf of the Board, the Company's system of
internal control (including financial, operational, compliance and
risk management) and make recommendations to the Board. With regard
to risk management the Board has specifically delegated to the Risk
Committee matters detailed in their Terms of Reference. The Audit
Committee is responsible for monitoring the effectiveness of the
Risk Committee;
j) review from time to time the appropriateness of internal
audit reporting by the Company's agents;
k) consider the major findings of internal investigations and management's response;
l) review the Company's operating, financial and accounting policies and practices;
m) provide advice to the Board on whether the annual financial
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;
n) monitor the effectiveness of the system of accounting and
internal control and review the Company's statement on internal
control systems before endorsement by the Board;
o) review the Investment Manager's internal controls Report and
the Company's internal control review prepared by the Investment
Manager and Administrator;
p) review the Company's procedure for prevention, detection and reporting of fraud;
q) the Committee shall review the Company's arrangements for the
Investment Manager's employees raising concerns in confidence,
about possible wrong doing in financial reporting or other matters.
The Committee shall ensure these arrangements allow proportionate
and independent investigation and appropriate action;
r) consider any other matters specifically delegated to the
Committee by the Board from time to time;
s) the committee may review any matter that it considers
appropriate not withstanding that it is not specifically mentioned
in the above list of duties; and
t) any or all powers of the Committee may be delegated by
resolution of the Committee unless otherwise determined by the
Board.
The Audit Committee may review any matter that it considers
appropriate, whether or not it is specifically mentioned in the
above list of duties.
Where non-audit services are provided by the auditor, these
engagements are pre-approved by the Audit Committee to ensure that
the auditor's independence and objectivity is not breached. No
non-audit services were provided during the year ended 31 December
2016 (2015: GBPNil).
Report of the Audit Committee (continued)
Composition
Mrs Farnon is the Chairman of the Audit Committee and Messrs
King, Warr and West are additional members serving on the
Committee. The Audit Committee and the members do not have any
links with the Company's External Auditor. They are also
independent of the management teams of the Investment Manager,
Administrator and all other service providers. The Audit Committee
meets formally no less than twice a year in Guernsey and on an ad
hoc basis if required. In addition, it meets the External Auditor
at least twice a year. The membership of the Audit Committee and
its terms of reference are kept under review.
Significant issues considered regarding the Annual Financial
Report
In discharging its responsibilities, the Audit Committee has
specifically considered the following significant issues relating
to the financial statements:-
Significant issue How the issue was addressed
--------------------------- -------------------------------
Valuation of the Company's The Board reviews the
Investments portfolio valuations
on a regular basis throughout
the year. The Board meets
with the Investment Manager
at least quarterly and
seeks assurance that
the pricing basis is
appropriate and in line
with relevant accounting
standards as adopted
by the Company and that
the carrying values are
materially correct.
The Company's net asset
value is calculated on
a daily basis by the
Administrator, JTC Fund
Solutions (Guernsey)
Limited and published
in the Financial Times.
--------------------------- -------------------------------
Significant issue How the issue was addressed
--------------------------- --------------------------------
Ownership of the Company's The Company's investments
Investments are held in safe custody
by HSBC Bank Plc. The
Board monitors the performance
of the Custodian and
also considers the security
of the investments held
by the Custodian.
The Investment Manager
has procedures to ensure
that investments can
only be made to the extent
that the appropriate
contractual and legal
arrangements are in place
to protect the Company's
assets. The Administrator
reconciles the investments
held according to their
records with the Custodian's
records. The Board satisfies
itself with these procedures
by reviewing the internal
control documents of
the Administrator.
--------------------------- --------------------------------
Report of the Audit Committee (continued)
Significant issues considered regarding the Annual Financial
Report (continued)
Significant issue How the issue was addressed
-------------------------- -------------------------------
Accuracy of calculation The management fee and
of investment management any performance fee is
and performance fees calculated in accordance
with the contractual
terms in the Investment
Management Agreement
by the Administrator,
JTC Fund Solutions (Guernsey)
Limited. These calculations
are prepared on a daily
basis as part of the
daily net asset value
calculation.
The Board monitors the
investment management
fee and any performance
fee on an ongoing basis.
The standard schedule
used to calculate the
performance fee has been
created by the Administrator
and reviewed and approved
by the Board before being
used. The Board also
approves any performance
fee prior to payment.
-------------------------- -------------------------------
Auditor and audit tenure
The Company's auditor, Deloitte LLP, has acted in this role
since 1974 under its current trading name of Deloitte LLP as well
as predecessor trading names. The Committee, in conjunction with
the Board, is committed to reviewing this appointment on a regular
basis to ensure that the Company is receiving an optimal level of
service. The appointment of the auditor is reviewed annually and we
are satisfied that sufficient safeguards are put in place by the
auditor to mitigate risks associated with long association such as
regular partner rotation. The audit partner was rotated following
the completion of the 31 December 2013 audit. There are no
contractual obligations which restrict the Company's choice of
auditor.
Assessment of the external audit process
The Audit Committee considers the nature, scope and results of
the auditor's work and monitors the independence of the External
Auditor. The Audit Committee also has a responsibility to monitor
the effectiveness of the audit process. Formal reports are received
from the auditors on an annual basis relating to the extent of
their work. The work of the auditors in respect of any significant
audit issues and consideration of the adequacy of that work is
discussed.
The Chairman of the Audit Committee liaises with the Investment
Manager and Administrator to discuss the extent of audit work
completed to ensure all matters of risk are covered while the
Committee assesses the quality of the draft financial statements
prepared by the Administrator.
The Audit Committee has an active involvement and oversight of
the preparation of both half yearly and annual financial
statements. Ultimate responsibility for reviewing and approving the
annual financial report remains with the Board.
Conclusion in respect of the Annual Financial Report
The production of the Company's annual financial report is a
comprehensive process requiring input from a number of different
parties. One of the key governance requirements of the Company's
annual financial report is that it is fair, balanced and
understandable. The Board has requested that the Committee advise
on whether it considers that the annual financial report fulfil
these requirements.
Report of the Audit Committee (continued)
Conclusion in respect of the Annual Financial Report
(continued)
As a result of the work performed, the Committee has concluded
that the annual financial report for the year ended 31 December
2016, taken as a whole, is fair, balanced and understandable and
provides the information necessary for Shareholder's to assess the
Company's performance, business model and strategy and has reported
on these findings to the Board. The Board's conclusions in this
respect are set out in the Directors' Report on page 11.
S A Farnon
Chairman of Audit Committee
21 April 2017
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED
Opinion on financial statements of Threadneedle
UK Select Trust Limited
=======================================================================
In our opinion:
* the financial statements give a true and fair view of
the state of the company's affairs as at 31 December
2016 and of its profit for the year then ended;
-- have been properly prepared in accordance
with International Financial Reporting Standards
(IFRSs) as adopted by the European Union; and
-- have been prepared in accordance with the
requirements of The Companies (Guernsey) Law
2008.
The financial statements that we have audited
comprise:
* the Statement of Comprehensive Income;
* the Statement of Financial Position;
* the Statement of Cash Flows;
* the Statement of Changes in Net Assets; and
* the related notes 1 to 19.
The financial reporting framework that has been
applied in their preparation is applicable law
and IFRSs as adopted by the European Union.
Emphasis of matter - Going concern
As described in Note 2b to the financial statements,
there is an upcoming vote at an extraordinary
general meeting ("EGM") in late June 2017 on
a proposed reconstruction and winding up of
the company. If the proposals are passed, the
company will no longer be a going concern as
the Company will be restructured and after the
completion of the restructuring, the directors
will commence the orderly wind up of the Company.
If the proposals are not passed, the Board will
propose a continuation resolution to Shareholders
at the 2017 AGM. If that resolution is not passed,
the directors will be required to formulate
alternative proposals for the company for submission
to the company's Shareholders, which may or
may not involve the restructuring or winding
up of the company.
Whilst we have concluded that the directors'
use of the going concern basis of accounting
in the preparation of the financial statements
is appropriate, these conditions indicate the
existence of a material uncertainty which may
give rise to significant doubt over the company's
ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Summary of our audit approach
========================================================================================================================
Key risks The key risks that we identified
in the current year were:
* Valuation of investments
* Ownership of investments
* Accuracy of performance fee calculation
Within this report, any new risks
are identified with and any risks
which are the same as the prior year
identified with.
--------------------------------------------------------------------- =================================================
Materiality The materiality that we used in the
current year was GBP468,000 which
was determined on the basis of 1%
of net assets.
--------------------------------------------------------------------- =================================================
Scoping Our audit was scoped by obtaining
an understanding of the entity and
its environment, including internal
control, and assessing the risks
of material misstatement using both
quantitative and qualitative measures.
--------------------------------------------------------------------- =================================================
Significant There has not been any significant
changes in change in our approach.
our approach
===================================================================== =================================================
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Going concern and the directors' assessment
of the principal risks that would threaten the
solvency or liquidity of the company
We have reviewed the directors' Aside from the
statement regarding the appropriateness matters disclosed
of the going concern basis in the emphasis
of accounting contained within of matter paragraph
note 2 to the financial statements above, we have
and the directors' statement nothing else material
on the longer-term viability to add or draw
of the company on page 23. attention to in
respect of these
We are required to state whether matters.
we have anything material to
add or draw attention to in We agreed with
relation to: the directors'
-- the directors' confirmation adoption of the
on page 24 that they have carried going concern basis
out a robust assessment of of accounting and
the principal risks facing identified a material
the company, including those uncertainty as
that would threaten its business disclosed in the
model, future performance, emphasis of matter
solvency or liquidity; paragraph above.
-- the disclosures on pages However, because
55-58 that describe those risks not all future
and explain how they are being events or conditions
managed or mitigated; can be predicted,
-- the directors' statement this statement
in note 2 to the financial is not a guarantee
statements about whether they as to the company's
considered it appropriate to ability to continue
adopt the going concern basis as a going concern.
of accounting in preparing
them and their identification
of any material uncertainties
to the company's ability to
continue to do so over a period
of at least twelve months from
the date of approval of the
financial statements; and
-- the directors' explanation
on page 23 as to how they have
assessed the prospects of the
company, over what period they
have done so and why they consider
that period to be appropriate,
and their statement as to whether
they have a reasonable expectation
that the company will be able
to continue in operation and
meet its liabilities as they
fall due over the period of
their assessment, including
any related disclosures drawing
attention to any necessary
qualifications or assumptions.
Independence
===================================== =======================
We are required to comply We confirm that
with the Financial Reporting we are independent
Council's Ethical Standards of the company and
for Auditors and confirm that we have fulfilled
we are independent of the our other ethical
company and we have fulfilled responsibilities
our other ethical responsibilities in accordance with
in accordance with those standards. those standards.
We also confirm
we have not provided
any of the prohibited
non-audit services
referred to in those
standards.
Our assessment of risks of material misstatement
=================================================
The assessed risks of material misstatement
described below are those that had the greatest
effect on our audit strategy, the allocation
of resources in the audit and directing the
efforts of the engagement team.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Valuation ofinvestments
======================================================================
Risk description Investments of GBP48.4m are classified
as Level 1 investments at year-end
as disclosed in note 10 to the Financial
Statements. There is a risk that the
Company's pricing methodology does
not accurately reflect the potential
exit price at the year-end date. This
risk is heightened when current market
conditions may impair the liquidity
of the investment portfolio as an element
of judgement may need to be incorporated
into the valuation.
There is also a risk that investments
could be illiquid and hence they could
be incorrectly classified as level
1.
Further details are provided in the
audit committee discussion in the Audit
Committee Report on page 29.
================= ===================================================
How the Our audit procedures included:
scope
of our -- Evaluating the design and implementation
audit of controls around the valuation of
responded investments;
to the
risk -- Testing 100% of the year-end prices
to prices obtained independently from
reliable third party sources;
-- Reviewing exchange rates used to
translate foreign currency assets and
liabilities at the year-end date against
a reliable third party source for reasonableness;
-- Checking the liquidity of the whole
portfolio to market data as at the
year-end date to assess trading volumes
and whether any adjustments to establish
the fair value of illiquid or otherwise
suspended for trading equities were
required; and
-- Reviewing post balance sheet events
and movements in valuations to assess
the accuracy and completeness of post
balance sheet disclosures regarding
the underlying investments.
================= ===================================================
Key observations Based on our procedures above, we conclude
that the valuation of investments is
appropriate.
================= ===================================================
Ownership of investments
======================================================================
Risk description There is a risk that the Company has
not retained the rights and obligations
of its investment portfolio, or that
the investments portfolio is not recognised
on a trade date basis which may result
in gains and losses on investments
being recognised in an incorrect period.
Further details are provided in the
audit committee discussion in the Audit
Committee Report on page 29.
================= ===================================================
How the Our audit procedures included:
scope
of our -- Evaluating the design and implementation
audit of controls around the custody of investments;
responded
to the -- Receiving direct confirmation of
risk all positions from the Custodian on
both a trade date and settlement date
basis and reconciled the trade date
basis to the
Company's records in order to test
for the recognition of gains and losses
in the correct period; and
-- Discussing with the Investment Manager
and reviewing the bank statements to
determine if the Custodian has undertaken
any stock lending activities in the
year under review; and
-- Evaluating the Board's assessment
of the Custody Risk associated to investments
and the Custodian.
================= ===================================================
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Key observations Based on our procedures above, we concur
that the company has the rights and
obligations of its investment portfolio.
================= ===============================================
Accuracy of performance fees calculation
==================================================================
Risk description The performance fee of GBP17,000 (2015:
GBP104,000) is payable to the Investment
Manager, based on the excess total
return of the Company's net assets
compared to the total return of the
FTSE All-Share Index, over a 2 year
period.
The calculation requires reference
to a third party index and adjustment
to the Company's net asset value ("NAV")
to reflect the Company's total return
over the specified performance period.
As this calculation is complex and
considered to be a related party transaction,
and therefore material by nature, it
has been identified as a key risk.
During the year to 31 December 2016,
the Fund has performed behind the benchmark.
However, during the prior year the
Fund performed ahead of the benchmark
and as a result the Investment Manager
is entitled to a performance fee in
line with the calculations as stipulated
in the Investment Management Agreement.
Further details are provided in the
Audit Committee Report on page 30.
================= ===============================================
How the Our audit procedures included:
scope
of our -- Evaluating the design and implementation
audit of controls around the calculation
responded of performance fees;
to the
risk -- Calculating an expectation of the
fees by following the calculation methodology
detailed in the agreements entered
into by the Company and comparing this
to the Company's records. For our expectation
of the fees, we utilised third party
market data in respect of the performance
fee benchmark and checked the calculation
of the Company's NAV total return;
and
-- Reviewing the Company's own calculation
of the performance fees and agreeing
the prior year fee to the invoice and
bank statements to ensure no historic
issues with its payment.
================= ===============================================
Key observations Based on our procedures above, we conclude
that performance fees have been accurately
stated.
================= ===============================================
These matters were addressed in the context
of our audit of the financial statements as
a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on
these matters.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Our application of materiality
=====================================================================
We define materiality as the magnitude of misstatement
in the financial statements that makes it probable
that the economic decisions of a reasonably
knowledgeable person would be changed or influenced.
We use materiality both in planning the scope
of our audit work and in evaluating the results
of our work.
Based on our professional judgement, we determined
materiality for the financial statements as
a whole as follows:
Materiality GBP468,000 (2015: GBP419,000)
------------------- ==========================================
Basis for 1% (2015: 1%) of net assets
determining
materiality
------------------- ==========================================
Rationale In determining materiality, we considered
for the benchmark the balances on which the users
applied of the financial statements would
judge the performance of the Company.
As the investment objective of the
Company is primarily to invest for
capital appreciation, we consider
the net asset value of the Company
to be a key performance indicator
for shareholders.
=================== ==========================================
Please click on the link below to view the Auditor
Report graph
http://www.rns-pdf.londonstockexchange.com/rns/0513D_-2017-4-21.pdf
We agreed with the Audit Committee that we would
report to the Committee all audit differences
in excess of GBP9k (2015: GBP8k), as well as
differences below that threshold that, in our
view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure
matters that we identified when assessing the
overall presentation of the financial statements.
An overview of the scope of our audit
=========================================================
Our audit was scoped by obtaining an understanding
of the entity and its environment, including
internal control, and assessing the risks of
material misstatement. Audit work to respond
to the risks of material misstatement was performed
directly by the audit engagement team.
The Administrator maintains the books and records
of the entity. Our audit therefore included
obtaining an understanding of this service organisation
(including obtaining and reviewing their controls
assurance report) and its relationship with
the entity.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Matters on which we are required to report by
exception
=========================================================================================
Adequacy of explanations received
and accounting records We have nothing
Under the Companies (Guernsey) to report in respect
Law, 2008 we are required to of these matters.
report to you if, in our opinion:
* we have not received all the information and
explanations we require for our audit; or
* proper accounting records have not been kept; or
* the financial statements are not in agreement with
the accounting records.
Corporate Governance Statement
Under the Listing Rules we We have nothing
are also required to review to report arising
part of the Corporate Governance from our review.
Statement relating to the company's
compliance with certain provisions
of the UK Corporate Governance
Code.
Our duty to read other information
in the Annual Report We confirm that
Under International Standards we have not identified
on Auditing (UK and Ireland), any such inconsistencies
we are required to report to or misleading statements.
you if, in our opinion, information
in the annual report is:
* materially inconsistent with the information in the
audited financial statements; or
* apparently materially incorrect based on, or
materially inconsistent with, our knowledge of the
company acquired in the course of performing our
audit; or
* otherwise misleading.
In particular, we are required
to consider whether we have
identified any inconsistencies
between our knowledge acquired
during the audit and the directors'
statement that they consider
the annual report is fair,
balanced and understandable
and whether the annual report
appropriately discloses those
matters that we communicated
to the audit committee which
we consider should have been
disclosed.
Respective responsibilities of directors and
auditor
===========================================================
As explained more fully in the Directors' Responsibilities
Statement, the directors are responsible for
the preparation of the financial statements
and for being satisfied that they give a true
and fair view. Our responsibility is to audit
and express an opinion on the financial statements
in accordance with applicable law and International
Standards on Auditing (UK and Ireland). We
also comply with International Standard on
Quality Control 1 (UK and Ireland). Our audit
methodology and tools aim to ensure that our
quality control procedures are effective, understood
and applied. Our quality controls and systems
include our dedicated professional standards
review team and independent partner reviews.
This report is made solely to the company's
members, as a body, in accordance with Section
of The Companies (Guernsey) Law, 2008. Our
audit work has been undertaken so that we might
state to the company's members those matters
we are required to state to them in an auditor's
report and for no other purpose. To the fullest
extent permitted by law, we do not accept or
assume responsibility to anyone other than
the company and the company's members as a
body, for our audit work, for this report,
or for the opinions we have formed.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THREADNEEDLE UK
SELECT TRUST LIMITED (continued)
Scope of the audit of the financial statements
===========================================================
An audit involves obtaining evidence about the
amounts and disclosures in the financial statements
sufficient to give reasonable assurance that
the financial statements are free from material
misstatement, whether caused by fraud or error.
This includes an assessment of: whether the
accounting policies are appropriate to the company's
circumstances and have been consistently applied
and adequately disclosed; the reasonableness
of significant accounting estimates made by
the directors; and the overall presentation
of the financial statements. In addition, we
read all the financial and non-financial information
in the annual report to identify material inconsistencies
with the audited financial statements and to
identify any information that is apparently
materially incorrect based on, or materially
inconsistent with, the knowledge acquired by
us in the course of performing the audit. If
we become aware of any apparent material misstatements
or inconsistencies we consider the implications
for our report.
David Becker
for and on behalf of Deloitte LLP
Chartered Accountants and Recognised Auditor
Guernsey, Channel Islands
21 April 2017
Statement of Comprehensive Income
for the year ended 31 December 2016
2016 2015
Notes Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Dividend revenue 3 1,745 - 1,745 1,507 - 1,507
Other income 3 3 - 3 - - -
Net gains on financial
assets at fair
value through
profit or loss 10 - 4,443 4,443 - 1,698 1,698
Net foreign exchange
gains - - - - 1 1
------- ------- ------- ------- --------------- -------
1,748 4,443 6,191 1,507 1,699 3,206
Expenses
Investment management
fees 4 54 163 217 53 159 212
Performance fees 4 4 13 17 26 78 104
Administration
fees 108 - 108 108 - 108
Registrar's
fees 31 - 31 16 - 16
Auditor's fees 26 - 26 26 - 26
Directors' fees
and expenses 16 114 - 114 115 - 115
Other expenses 147 - 147 252 - 252
------- ------- ------- ------- --------------- -------
Total operating
expenses before
finance costs 484 176 660 596 237 833
------- ------- ------- ------- --------------- -------
Operating profit
before finance
costs 1,264 4,267 5,531 911 1,462 2,373
Finance costs
Interest and
other finance
cost 12 15 44 59 16 48 64
------- ------- ------- ------- --------------- -------
Profit for the
year 1,249 4,223 5,472 895 1,414 2,309
======= ======= ======= ======= =============== =======
Basic and diluted
return per ordinary
share 7 5.61p 18.97p 24.58p 4.05p 6.40p 10.45p
------- ------- ------- ------- --------------- -------
The total column of this statement is the Statement of
Comprehensive Income of the Company, with the revenue and capital
columns representing supplementary information.
All revenue and capital items in the above statement derive from
continuing operations. All income is attributable to the ordinary
Shareholders of the Company.
The notes on pages 43 to 59 are an integral part of these
financial statements.
Statement of Financial Position
as at 31 December 2016
Notes 2016 2015
GBP'000 GBP'000
Assets
Cash and cash equivalents 8 1,565 2,266
Other receivables and
accrued income 9 104 94
Financial assets at fair
value through profit or
loss 10 48,397 42,827
----------- -----------
Total assets 50,066 45,187
----------- -----------
Liabilities
Other payables and
accrued expenses 11 178 247
Borrowings 12 3,000 3,000
----------- -----------
Total liabilities 3,178 3,247
----------- -----------
Net assets attributable
to shareholders 46,888 41,940
=========== ===========
Represented by:
Share Capital 14 2,430 2,430
Treasury share reserve 14 (3,404) (3,879)
Other reserves 47,862 43,389
----------- -----------
Net assets attributable
to shareholders 46,888 41,940
=========== ===========
Number of ordinary shares
in issue (net of treasury
shares) 15 22,426,621 22,143,066
Net asset value per share 15 209.07 189.40
These financial statements were approved by the Board on [Date]
and are signed on behalf of the Board by:
D J Warr S A Farnon
21 April 2017
The notes on pages 43 to 59 are an integral part of these
financial statements.
Statement of Changes in Net Assets Attributable to
Shareholders
for the year ended 31 December 2016
Issued Treasury Share Capital Capital
share share premium redemption Capital reserve- Revenue
capital reserve reserve reserve reserve-realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 2,430 (3,879) 11,307 4,308 17,511 5,472 4,791 41,940
Cash dividends:
-2015
second
interim
dividend - - - - - - (316) (316)
-2016
first
interim
dividend - - - - - - (208) (208)
Shares
issued
for scrip
dividends - 475 - - (475) - - -
Profit/(Loss)
for the
year - - - - (114) 4,337 1,249 5,472
--------- --------- --------- ------------ ----------------- ------------ --------- --------
At 31
December
2016 2,430 (3,404) 11,307 4,308 16,922 9,809 5,516 46,888
--------- --------- --------- ------------ ----------------- ------------ --------- --------
There were no other recognised income and expenses for the year
ended 31 December 2016.
for the year ended 31 December 2015
Issued Treasury Share Capital Capital
share share premium redemption Capital reserve- Revenue
capital reserve reserve reserve reserve-realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2015 2,430 (3,724) 11,307 4,308 16,714 5,296 4,425 40,756
Shares
repurchased - (596) - - - - - (596)
Cash dividends:
-2014
second
interim
dividend - - - - - - (302) (302)
-2015
first
interim
dividend - - - - - - (227) (227)
Shares
issued
for scrip
dividends - 441 - - (441) - - -
Profit
for the
year - - - - 1,238 176 895 2,309
--------- --------- --------- ------------ ----------------- ------------ --------- --------
At 31
December
2015 2,430 (3,879) 11,307 4,308 17,511 5,472 4,791 41,940
--------- --------- --------- ------------ ----------------- ------------ --------- --------
There were no other recognised income and expenses for the year
ended 31 December 2015.
The notes on pages 43 to 59 are an integral part of these
financial statements.
Statement of Cash Flows
for the year ended 31 December 2016
Notes 2016 2015
GBP'000 GBP'000
Cash flows from operating
activities
Payments for purchase
of financial investments (7,925) (5,232)
Proceeds from sale of
financial investments 6,799 8,053
Dividend received from
investments 1,738 1,507
Investment management
fee paid (213) (209)
Other operating expenses (517) (615)
Net cash (outflow)/inflow
from operating activities (118) 3,504
-------- --------
Cash flows from financing
activities
Interest paid (59) (84)
Share repurchase 14 - (596)
Equity dividends paid 6 (524) (529)
Decrease in borrowings 12 - (1,000)
-------- --------
Net cash outflow from
financing activities (583) (2,209)
-------- --------
Net (decrease)/increase in
cash and cash equivalents (701) 1,295
Effect of exchange rate
changes on cash and cash
equivalents - 1
Cash and cash equivalents
at the beginning of the
year 2,266 970
Cash and cash equivalents
at the end of the year 8 1,565 2,266
-------- --------
The notes on pages 43 to 59 are an integral part of these
financial statements.
Notes to the Financial Statements
1. General information
The Company is an authorised closed-ended investment Company
incorporated under The Companies (Guernsey) Law, 2008, as amended,
with its registered office situated at Ground Floor Dorey Court,
Admiral Park, St Peter Port, Guernsey GY1 2HT. The Company's shares
have been admitted to the Official List of the UK Listing Authority
with a premium listing and to trading on the London Stock
Exchange's Main Market for listed securities.
The objective of the Company is to provide Shareholders with a
total return in excess of the total return on the FTSE All-Share
Index, together with a progressive dividend policy.
The Company has no employees.
2. Accounting policies
a. Basis of preparation
The financial statements have been prepared in accordance with
the applicable International Financial Reporting Standards ("IFRS")
and interpretations adopted by the International Accounting
Standards Board ("IASB"), and in accordance with the guidelines
included in the AIC Statement of Recommended Practice for Financial
Statements of Investment Trust Companies issued in January 2003 and
revised in January 2014 ("AIC SORP") to the extent that it is not
in conflict with IFRS. The financial statements have been prepared
on a historical cost basis except for financial assets held at fair
value through profit or loss, which have been measured at fair
value.
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC,
supplementary information which analyses the Statement of
Comprehensive Income between items of a revenue and capital nature
has been presented alongside the Statement of Comprehensive
Income.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results may differ
from those estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised if the revision
affects only that period or in the period of the revision and
future periods if the revision affects both the current and future
periods.
The critical judgments and key sources of estimation uncertainty
are detailed within the accounting policies note below.
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
b. Going concern
In the opinion of the directors, the Company has adequate
resources to continue in operational existence for the foreseeable
future. For this reason the financial statements have been prepared
using the going concern basis.
The directors have arrived at this opinion by considering, inter
alia, the following factors:
-- the Company had sufficient liquidity to meet all on-going expenses at 31 December 2016;
-- the portfolio of investments held by the Company materially
consists of listed investments which are readily realisable and
therefore the Company will have sufficient resources to meet its
liquidity requirements; and
-- As at 31 December 2016, the Company had GBP3 million of
external borrowings. Since the year end, the Company allowed the
loan facility with Lloyds Bank Plc to mature on 26 March 2017 and
all outstanding amounts under that facility, including accrued
interest, were repaid. As at the date of approval of this report,
the Company had no external borrowings or other material financial
indebtedness.
In accordance with the Company's articles of incorporation, the
Shareholders are due to have an opportunity to vote on the
Company's continuation at the 2017 annual general meeting. However,
the Board is intending to publish a circular in late May 2017
including a notice convening an extraordinary general meeting of
the Company (the "EGM") to be held in late June 2017, at which
Shareholders will be asked to approve proposals in relation to the
reconstruction and winding up of the Company. If those proposals
are approved by Shareholders and become effective, the 2017 AGM
will not be held and no continuation vote will take place. This
creates material uncertainty that may cast significant doubt on the
Company's ability to continue as a going concern. If the proposals
are passed, the Company will be restructured and after completion
of the restructuring, the liquidator will commence the orderly wind
up of the Company.
c. Adoption of new and revised standards
Standards not yet affecting the reported results nor the
financial position
The same accounting policies, presentation and methods of
computation are followed in these annual financial statements as
those followed in the preparation of the Company's audited
financial statements for the year ended 31 December 2015.
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective.
IFRS 9 Financial instruments - effective 1 January 2018
IFRS 15 Revenue from Contracts from Customers - effective 1
January 2018
IFRS 16 Leases - effective 1 January 2019; early adoption
permitted only if entity adopts IFRS 15
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements in future periods, except that IFRS 9 may impact both
the measurement and disclosures of financial instruments and IFRS
15 may have an impact on revenue recognition and related
disclosures. Beyond the information above, it is not practicable to
provide a reasonable estimate of the effect of IFRS 9 and IFRS 15
until a detailed review has been completed.
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
d. Other receivables
Other receivables do not carry any interest, are short-term in
nature, and are accordingly stated at their nominal value as
reduced by appropriate allowances for estimated irrecoverable
amounts.
Sales of financial assets are recognised at the trade date.
Where trades have been executed but are awaiting settlement from
the broker, these are accounted for as due from brokers on the
Statement of Financial Position.
e. Financial assets
(i) Classification
The Company classifies its investments at fair value through
profit or loss in accordance with IAS 39. All other financial
assets are held at amortised cost.
(ii) Recognition
Financial assets are recognised on the trade date where a
purchase is under contract whose terms require delivery within the
timeframe established by the market concerned.
(iii) Initial measurement
As the Company's business is investing in financial assets with
a view to profiting from their total return in the form of
interest, dividends or increases in fair value and are managed on a
portfolio basis to meet the objectives of the Company, listed
equities and fixed income securities are designated as fair value
through profit or loss on initial recognition and material
transaction costs on acquisition and all transaction costs on
disposal of the financial asset are expensed as a capital item.
(iv) Subsequent measurement
After initial measurement, the Company measures its financial
assets, which are classified as fair value through profit or loss
at fair value. In accordance with IFRS 13, the Company has applied
the definition of fair value as set out under fair value
measurement.
Subsequent changes in the fair value of the Company's financial
assets are recorded in the Statement of Comprehensive Income under
net gains/(losses) on financial assets at fair value through profit
or loss. Foreign exchange gains and losses for financial assets at
fair value through profit or loss are included within the changes
in its fair value.
(v) Derecognition
Financial assets are derecognised where:
-- a sale is under contract whose terms require delivery within
the timeframe established by the market concerned; or
-- it is evident, following an impairment review, that the
Company can no longer recover any value from the financial
asset.
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
(vi) Impairment
The Company is required to evaluate the financial assets in its
portfolio to determine if any of the securities are impaired.
Fair value and impairment estimates are made at a specific point
in time based on market conditions and information about the
financial asset. These estimates are subjective in nature and
involve uncertainties and matters of significant judgement.
The Company materially invests in listed or quoted equities and
therefore at the reporting date, there were no sources of
significant judgement or uncertainty.
(vii) Fair value measurement
'Fair value' is the price that would be received to sell an
asset in an orderly transaction between market participants at the
measurement date in principal or, in its absence, the most
advantageous market to which the Company has access at that date.
When available, the Company measures the fair value of an
instrument using the quoted price in an active market for that
instrument. A market is regarded as 'active' if transactions for
the asset take place with sufficient frequency and volume to
provide pricing information on an ongoing basis. The Company
measures financial assets quoted in an active market at bid
price.
If there is no quoted price in an active market, then the
Company uses valuation techniques that maximise the use of relevant
observable inputs and minimise the use of unobservable inputs. The
chosen valuation techniques incorporate all of the factors that
market participants would take into account in pricing a
transaction.
The Company recognises transfers between levels of fair value
hierarchy as at the end of the accounting period during which the
change has occurred.
f. Net gains/(losses) on financial assets at fair value through profit or loss
Net gains/(losses) on financial assets at fair value through
profit or loss includes changes in the fair value of financial
assets held at fair value through profit or loss.
Unrealised gains and losses comprise changes in the fair value
of financial assets for the year and from reversal of prior year's
unrealised gains and losses for financial assets which were
realised in the reporting period.
Realised gains and losses on disposals of financial assets
classified as fair value through profit or loss are calculated
using the average method. They represent the difference between a
financial asset's initial carrying amount and its disposal
amount.
g. Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. A financial liability is any liability that contractually
obligates the Company to deliver cash or another financial asset or
exchange financial assets or financial liabilities that are
potentially unfavourable to the Company, or a contract that will or
may be settled in the Company's own equity instruments. An equity
instrument is any contract that evidences a residual interest in
the assets of the Company after deducting all of its liabilities.
As the ordinary shares have no fixed rights to redemption or income
they are classified as equity.
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
h. Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs, finance charges,
including premiums payable on settlement or redemption and direct
issue costs. Interest is accounted for on an accruals basis in the
Statement of Comprehensive Income using the effective interest
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they
arise.
i. Other payables
Other payables are not interest-bearing and are stated at their
nominal value.
Purchases of financial assets are recognised at the trade date.
Where trades have been executed but the Broker requires funds for
settlement of the trade, these have been accounted for as due to
Brokers on the Statement of Financial Position.
j. Dividend revenue, interest revenue and other revenue
Dividend revenue is brought into the Statement of Comprehensive
Income as a revenue item on the ex-dividend date or, where no
ex-dividend date is quoted, when the Company's right to receive
payment is established. All dividends are shown gross of
withholding tax.
Where the Company has elected to receive its dividends in the
form of additional shares rather than in cash, the amount of the
cash dividend is recognised as dividend revenue in the Statement of
Comprehensive Income.
Fixed returns on non-equity investments and on debt securities
are recognised as a revenue item in the Statement of Comprehensive
Income on a time apportionment basis so as to reflect the effective
yield on the investment. Other returns on non-equity shares are
recognised when the right to the return is established.
Deposit interest is recognised as interest revenue and is
included in the Statement of Comprehensive Income on an accruals
basis.
Other revenue, such as underwriting commission, is recognised on
a received basis as the timing of receipts of this nature is
uncertain and therefore the received basis is deemed the most
appropriate method to account for this revenue.
k. Functional and presentation currency
The Company's functional and presentation currency is Sterling,
which is the currency of the primary economic environment in which
the Company operates. The Company's performance is evaluated and
its liquidity is managed in Sterling, therefore Sterling is
considered as the currency that most faithfully represents the
economic effects of the underlying transactions, events and
conditions.
l. Foreign currency translations
Foreign currency monetary assets and liabilities are translated
into Sterling at the rate of exchange ruling at the Statement of
Financial Position date. Transactions during the year in foreign
currencies are translated into Sterling at the rate ruling at the
date of the transaction. Realised and unrealised foreign exchange
gains and losses are recognised in the Statement of Comprehensive
Income.
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
m. Statement of Cash Flows
The Company is required to prepare a Statement of Cash Flows in
accordance with IFRS and has elected to prepare the Statement of
Cash Flows on a direct basis.
n. Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged through the Statement of Comprehensive Income as
revenue except as follows:
-- expenses which are incidental to the acquisition of an
investment are deducted from gains on investments through the
Statement of Comprehensive Income as capital;
-- expenses which are incidental to the disposal of an
investment are deducted from the disposal proceeds of the
investment; and
-- expenses are charged to the Statement of Comprehensive Income
as capital realised where a connection with the maintenance or
enhancement of the value of the investments can be demonstrated. In
this respect, the Investment Manager's fee and performance fee have
been allocated 75% to the capital reserve - realised and 25% to the
revenue reserve in line with the Board's expected long-term split
of returns in the form of capital gains and income respectively
from the investment portfolio of the Company.
o. Finance costs
Finance costs are accounted for on an accruals basis. Finance
costs are allocated, insofar as they relate to the financing of the
Company's investments, 75% to capital reserve - realised and 25% to
revenue account, in line with the Board's expected long-term split
of returns, as outlined in the expenses note above.
p. Segment Reporting
A business segment is a distinguishable component of the Company
that is engaged in providing products and services and that is
subject to risks and returns that are different from those of other
business segments. A geographical segment is a distinguishable
component of the Company that is engaged in providing products and
services and that is subject to risks and returns that are
different from those of other economic environments. The Board is
of the opinion that the Company is organised in one main business
segment, namely the management of the Company's investments in
order to achieve the Company's investment objectives as described
in note 1 to the financial statements. The Board is further of the
opinion that the Company's secondary segment reporting format is
also organised into one main geographical unit as the location of
all investments is materially all within the United Kingdom.
q. Treasury shares
Where the Company purchases its own share capital, the
consideration paid, which includes any directly attributable costs,
is recognised as a deduction from net assets attributable to
Shareholders through the treasury share reserve.
When such shares are subsequently sold or reissued, any
consideration received, net of any directly attributable
incremental transaction costs, is recognised as an increase in
equity and the resulting surplus or deficit on the transaction is
transferred to/from the treasury share reserve.
Notes to the Financial Statements (continued)
3. Dividend and other income
2016 2015
GBP'000 GBP'000
Dividend revenue from investments
designated at fair value
through profit or loss:
Dividends 1,745 1,507
Other income 3 -
Total income 1,748 1,507
======== ========
4. Investment management and performance fees
Threadneedle Asset Management Limited was appointed as
Investment Manager under an Investment Management Agreement with
the Company dated 27 July 2012. On 23 September 2014, the
Investment Management Agreement was amended and restated. No
changes to the management or performance fees were made. The
investment management fee is calculated as 0.5% per annum of the
value of the funds under management on each Valuation Date in
respect of each quarter or such other date or fee as shall be
agreed from time to time between the Company and the Manager. The
first Valuation Date for the purpose of the management fee was 31
December 2012.
The Investment Manager is also entitled to a performance fee,
which is calculated as 10% of the total return NAV out-performance
of the FTSE All-Share Index (total return) both expressed as a
percentage of that as indicated at the end of that year and that of
the immediately preceding financial year. The performance fee
percentage calculated may not exceed 0.25% over a period of 12
months. A performance fee of GBP17,000 is attributable for the year
ended 31 December 2016 (31 December 2015: GBP104,000). This
performance fee shall be payable within 23 days of 31 March
2017.
5. Taxation
The Company is exempt from Guernsey income tax under the Income
Tax (Exempt Bodies) (Guernsey) Ordinances 1989 to 1997 and is
charged an annual exemption fee of GBP1,200, which is included
within other expenses in the Statement of Comprehensive Income.
The Company suffered GBP25,239 (2015: GBP148,400) of withholding
tax on foreign dividends during the year and this expense has been
included in other expenses in the statement of comprehensive
income.
6. Dividends
2016 2015
GBP'000 GBP'000
Equity dividends
Ordinary shares
Second interim dividend for 2015: 2.55p (gross) on 12,424,144 shares paid in 2016 316 302
Second interim dividend for 2015 taken as scrip dividend issued in 2016: 153,932 shares issued
at a cost of 161.07p per share 248 249
First interim dividend for 2016: 1.95p (gross) on 10,658,551 shares paid in 2016 208 227
First interim dividend for 2016 taken as scrip dividend issued in 2016: 129,623 shares issued
at a cost of 175.00p per share 227 192
999 970
======== ========
Notes to the Financial Statements (continued)
7. Basic return per ordinary share
2016 2015
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
Return 5.61 18.97 24.58 4.05 6.40 10.45
======== ======== ====== ======== ======== ======
Return per ordinary share is based on the net revenue on
ordinary activities of GBP1,249,000 (2015: return GBP895,000) and
on 22,262,244 ordinary shares, being the weighted average number of
ordinary shares in issue during the year (2015: 22,097,140).
Capital return per ordinary share is based on a net capital
profit for the financial year of GBP4,223,000 (2015: return
GBP1,414,000) and on 22,262,244 ordinary shares, being the weighted
average number of ordinary shares in issue during the year (2015:
22,097,140).
8. Cash and cash equivalents
Cash and cash equivalents comprises bank balances and cash held
by the Company including short-term deposits with an original
maturity of three months or less. The carrying amount of these
assets approximates to their fair value.
9. Other receivables and accrued income
Other receivables 2016 2015
GBP'000 GBP'000
Accrued income 93 83
Prepayments 11 11
-------- --------
104 94
======== ========
The directors consider that the carrying amount of receivables
approximates to their fair value.
10. Financial assets at fair value through profit or loss
2016 2015
% of net Fair % of
Fair Value assets Value net assets
GBP'000 % GBP'000 %
Financial assets at
fair value through
profit or loss
- Listed equity securities 48,397 103.22 42,827 102.11
--------- -------- ------------
Net gains on financial
assets at fair value
through profit or loss
2016 2015
GBP'000 GBP'000
Realised gains 106 1,522
Unrealised gains 4,337 176
-------- --------
4,443 1,698
-------- --------
Notes to the Financial Statements (continued)
10. Financial assets at fair value through profit or loss (continued)
Fair value measurements
The Company adopted the amendment to IFRS 13, effective 1
January 2014. IFRS 13 establishes a fair value hierarchy that
prioritises the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value
hierarchy under IFRS 13 are as follows:
Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices); and
Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (that is, unobservable
inputs).
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement in its entirety. For this purpose, the
significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses
observable inputs that require significant adjustment based on
unobservable inputs, that measurement is a level 3 measurement.
Assessing the significance of a particular input to the fair value
measurement in its entirety requires judgment, considering factors
specific to the asset or liability.
The determination of what constitutes 'observable' requires
significant judgment by the Company. The Company considers
observable data to be market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The following tables present the Company's financial assets and
liabilities by level within the valuation hierarchy as of 31
December 2016 and 2015:
Percentage Percentage
of net of net
2016 assets 2015 assets
Level 1 fair value GBP'000 % GBP'000 %
assets
Investments valued
at fair value 48,397 103.22 42,827 102.11
-------- ----------- -------- -----------
Notes to the Financial Statements (continued)
11. Other payables and accrued expenses
Other payables 2016 2015
GBP'000 GBP'000
Administrative fees 54 54
Audit fees 14 19
Investment management fees 56 52
Loan facility fee and interest
payable 12 13
Performance fee 17 104
Registrars fees 10 1
Sundry expenses 15 4
-------- --------
178 247
======== ========
The directors consider that the carrying amount of payables
approximates to their fair value.
12. Loan facility
On 26 March 2014 the Company entered into a one year GBP5
million revolving loan facility with Lloyds Bank Plc (the "Bank"),
secured on the assets of the Company, for investment purposes,
which was extended on 19 March, 2015 until 26 March 2017. The Board
resolved not to seek renewal of the loan facility upon its expiry
on 26 March, 2017 and all amounts outstanding under the facility,
including interest accrued thereon, have already been repaid. As at
31 December 2016, GBP3,000,000 of the loan facility was being
utilised. Interest was payable at a rate of Sterling LIBOR plus
1.1%, payable quarterly in arrears, and the borrowing was held at
amortised cost. Loan interest of GBP51,000 was paid during the
year. A fee of 0.39% per annum was payable on the undrawn amount of
this facility, resulting in GBP4,500 being paid for the year under
review. GBP3,700 of the GBP10,000 loan arrangement fee was
amortised over the year and also included in finance costs. In
addition, the Company was required to comply with the following
covenants imposed by the Bank:
-- the Company was required to ensure that the borrowing did not
at any time exceed 20% of the Adjusted Gross Asset Value*;
-- the Company was required to maintain the Net Worth (meaning
net asset value adjusted for such items as intangible assets and
unrealised gains or losses accrued since the date of the audited
annual financial reports) at not less that GBP20,000,000;
-- the Company was required to ensure that the investment
portfolio included holdings in not less than 25 separate
businesses; and
-- the Company was required not to change its investment policy
without the written permission of the Bank.
* Adjusted Gross Asset Value meant the market value of Total
Gross Assets adjusted by deducting:
a) The value of unlisted investments;
b) The amount by which any single investment exceeded 7.5% of
the investment portfolio;
c) The amount by which the investment in a single ICB Investment
Sector exceeded 20% of the investment
portfolio; and
d) The amount by which the largest 10 investments exceeded 50%
of the investment portfolio.
Notes to the Financial Statements (continued)
13. Business and geographical segments
As described in the accounting policies in note 2 to the
financial statements, the Board is of the opinion that the Company
is organised in one main business segment, namely the management of
the Company's investments in order to achieve the Company's
investment objectives as described in note 1 to the financial
statements, and considers this to be the primary reporting format
for segment information and no further business segment information
not already included in other parts of the financial statements is
required.
The Board is also of the opinion that the Company's secondary
segment reporting format is also organised into one main
geographical unit as the location of all of its investments is
materially all within the United Kingdom.
Income Net Assets
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 1,748 1,507 46,888 41,940
1,748 1,507 46,888 41,940
======== ======== ======== ========
Geographical locations are determined by the Company based on
the country of primary listing for listed instruments and the
country of incorporation for unlisted instruments.
14. Share capital
2016 2015
GBP'000 GBP'000
Authorised
Unlimited number of shares - -
-------- --------
The holders of the ordinary shares are entitled to receive
notice of and to attend and vote at general meetings of the
Company. At such meetings on a show of hands each Shareholder shall
have one vote and on a poll each Shareholder shall have one vote
for each share held by them. The Company is not entitled to any
votes in respect of any ordinary shares held in treasury.
On a winding-up, any surplus assets remaining after the payment
of all creditors shall be divided amongst the Shareholders in the
same proportion as the capital attributable to them on the
winding-up date.
Notes to the Financial Statements (continued)
14. Share capital (continued)
2016 2015
GBP'000 GBP'000
Issued, called up and
fully paid:
24,302,092 (2015: 24,302,092)
ordinary shares of 10p each
including 1,875,471 treasury
shares (2015: 2,159,026) 2,430 2,430
2016
Treasury share Shares in Share
reserve issue Premium
Shares Cost Shares Cost Cost
Nominal GBP'000 Nominal GBP'000 GBP'000
Balance at 1 January
2016 2,159,026 3,879 24,302,092 2,430 11,307
Shares purchased and
held in treasury - - - - -
Shares sold from treasury
in lieu of dividends (283,555) (475) - - -
Balance at 31 December
2016 (1,875,471) (3,404) 24,302,092 2,430 11,307
-------------------- ---------------- ----------- -------- ---------
2015
Treasury share Shares in Share
reserve issue Premium
Shares Cost Shares Cost Cost
Nominal GBP'000 Nominal GBP'000 GBP'000
Balance at 1 January
2015 2,070,920 3,724 24,302,092 2,430 11,307
Shares purchased and
held in treasury 343,000 596 - - -
Shares sold from treasury
in lieu of dividends (254,894) (441) - - -
Balance at 31 December
2015 2,159,026 3,879 24,302,092 2,430 11,307
-------------------- ---------------- ----------- -------- ---------
During 2016 and 2015 no shares were purchased
for cancellation.
15. Net asset value per share
The net asset value per ordinary share is calculated based on
net assets attributable to the ordinary Shareholders of
GBP46,888,000 (2015: GBP41,940,000) and on 22,426,621 (2015:
22,143,066) ordinary shares, being the number of ordinary shares in
issue at the end of the year, excluding treasury shares.
Notes to the Financial Statements (continued)
16. Related party transactions
The members of the Board are listed on page 4 of the annual
report. Fees earned by the directors of the Company during the year
were GBP114,000 (2015: GBP114,300), of which GBPNil (2015: GBPnil)
was outstanding at the period end. Allowable expenses claimed by
the directors in the course of their duties amounted to GBP2,000
for the year (2015: GBP1,000).
Ameriprise Financial Inc. ("Ameriprise"), the parent of the
Investment Manager, controlled the voting rights attached to 22.13%
of the Company's shares as at 31 December 2016. Ameriprise
exercises discretion over these shares held on behalf of its
clients.
The Investment Manager earned investment management fees of
GBP217,000-- (2015: GBP212,000) during the year, of which GBP56,000
(2015: GBP52,000) was outstanding at the reporting date. In
addition GBP17,000 performance fees were accrued for the year
(2015: GBP104,000).
17. Financial risk management
Introduction
The Company's objective in managing risk is the creation and
protection of Shareholder value. Risk is inherent in the Company's
activities, but is managed through a process of ongoing
identification, measurement and monitoring, subject to risk limits
and other controls. The process of risk management is critical to
the Company's continuing profitability. The Company is exposed to
market risk (which includes interest rate risk and price risk),
credit risk and liquidity risk arising from the financial assets it
holds.
Capital risk management
The capital structure of the Company consists of the cash and
cash equivalents, borrowings and equity attributable to ordinary
Shareholders, comprising issued share capital, treasury share
reserve, share premium reserve, capital redemption reserve, capital
reserves and revenue reserve as disclosed in the Statement of
Changes in Net Assets Attributable to Shareholders. The Company
does not have any externally imposed capital requirements.
The investment objective of the Company is to invest over 80% of
its gross assets by value in the UK and the investment policy aims
to provide a total return to Shareholders in excess of the net
total return on the FTSE All-Share Index and a progressive dividend
policy. The Company aims to deliver its objective by investing
available cash and using leverage whilst maintaining sufficient
liquidity to meet ongoing expenses and dividend payments.
The Company's policy is to provide net income for distribution
from the dividend income earned from a portfolio of mainly UK
equity securities which are listed on the London Stock Exchange.
Further, the Company has allocated to capital 75% of its investment
management fee and performance fee in line with the Board's
expectation of long-term returns in the form of capital gains from
the investment portfolio of the Company.
During the year under review, the assets of the Company were
invested in accordance with the Company's Investment Manager's
strategy. The Company invests in various sectors and businesses to
mitigate the primary risk of the Company, price risk. In addition,
price-volatility levels are reviewed and monitored daily.
Notes to the Financial Statements (continued)
17. Financial risk management (continued)
Concentration risk
Concentration risk is the risk that the Company's portfolio is
not suitably diversified and therefore the Company could become
materially exposed to sector specific price fluctuations.
As at 31 December 2016, the Company's portfolio consisted of 61
investments spread over 9 industries. Further, the portfolio only
held investments issued in the United Kingdom.
The Board has also adopted investment restrictions to manage the
risk profile, which are:
-- The top five holdings in the Company's portfolio may not
exceed 40 per cent of the total value of the portfolio.
-- The top three ICB sectors represented in the portfolio may
not exceed 50 per cent of the total value of the portfolio.
-- The securities of no one company may represent more than 10
per cent of the value of the Company's portfolio measured at the
time of acquisition and subsequently, when additions are made to
the holding.
-- The Company will not hold more than 5 per cent of the issued
share capital (or voting shares) in any one company.
While the Company may hold shares in other investment companies
(including investment trusts), the Company will not invest more
than 10 per cent, in aggregate, of the value of its total assets in
other listed closed-ended investment funds (save to the extent that
such closed-ended investment funds have published investment
policies to invest no more than 15 per cent of their total assets
in such other listed closed-ended investment funds).
-- The Board monitors investment restrictions by utilising the
Investment Manager's and the Administrator's compliance functions.
Investment strategy and allocation is monitored by the Board
through the use of an Investment Manager.
Credit risk
Credit risk is the risk that an issuer or counterparty may be
unable or unwilling to meet a commitment that it has entered into
with the Company.
The Company's principal financial assets are bank balances and
cash, other receivables and investments as set out in the Statement
of Financial Position which represents the Company's maximum
exposure to credit risk in relation to the financial assets. The
credit risk on bank balances is limited because the counterparties
are banks with high credit ratings of A-1+ assigned by
international credit-rating agencies.
All transactions in listed securities are settled upon delivery
using approved brokers. The risk of default is considered minimal
as delivery of securities sold is only made once the broker has
received payment. Payment is made on a purchase once the securities
have been received by the broker. The trade will fail if either
party fails to meet its obligations.
Notes to the Financial Statements (continued)
17. Financial risk management (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its liabilities as they fall due.
The Company's assets comprise securities that can be readily
realised to meet obligations. As a result, the Company is able to
realise its investments in these instruments at an amount close to
their fair value in order to meet its liquidity requirements.
Dividend income is also expected to be sufficient to cover
short-term liquidity requirements.
The loan facility expires on 26 March 2017.
No liquidity analysis for the Company's financial assets and
liabilities has been provided for in the current or prior year as
liquidity risk is not considered material.
Country risk
The Board has reviewed the disclosures contained within the
annual financial report and believes that no additional disclosures
are required since the Company is primarily invested in UK listed
equities.
Market risk
Market risk is the possibility that future changes in market
prices may make a financial instrument less valuable or more
onerous.
The Company's market risk is managed by the Investment Manager
through diversification of the investment portfolio in accordance
with the Company's investment policy.
a) Price risk
Price risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market prices whether those changes are caused by factors specific
to the individual financial instrument or its issuers, or factors
affecting similar financial instruments traded in the market.
In accordance with the Company's investment objectives, the
Company does not hedge against its exposure to market price
risk.
Notes to the Financial Statements (continued)
17. Financial risk management (continued)
a) Price risk (continued)
The investment strategy of the Company has been delegated to the
Company's Investment Manager under an agreement dated 27 July 2012,
as amended and restated on 23 September 2014. The Investment
Manager operates under agreed parameters and the Board monitors its
performance on a regular basis.
Price sensitivity
The following table details the Company's sensitivity to a 10%
increase and decrease in the market prices while all other
variables were held constant. 10% is the sensitivity rate used when
reporting price risk internally to key management personnel and
represents management's assessment of the possible change in market
prices. A positive number indicates an increase in net assets
attributable to holders of shares where the market price of the
relevant financial instrument increases and a negative number
indicates a decrease where the market price of the relevant
financial instrument decreases.
Net Assets Net Assets
10% increase 10% decrease
in price in price
Impact on financial Impact on financial
assets at fair assets at fair
value through value through
profit or loss profit or loss
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
Increase/(decrease)
in net assets attributable
to shareholders
-Designated as
at fair value through
profit or loss 4,840 4,283 (4,840) (4,283)
-------------------- --------- -------------------- --------
4,840 4,283 (4,840) (4,283)
==================== ========= ==================== ========
In practice the actual trading results may differ from the
sensitivity analysis above and the difference could be
material.
b) Interest rate risk
Interest rate risk is the risk that future cash flows of a
financial instrument will fluctuate because of changes in interest
rates associated with that financial instrument.
The Company's interest rate sensitive assets and liabilities
mainly comprise of cash and cash equivalents and borrowings. The
cash and cash equivalents and borrowings are subject to floating
rates and are considered to be part of the investment strategy of
the Company. No other hedging is undertaken in respect of this
interest rate risk. As such, the Board does not believe the Company
suffers any material interest rate risk.
Notes to the Financial Statements (continued)
18. Parent and ultimate controlling party
The Board is of the opinion that there is no immediate parent or
ultimate controlling party of the Company.
19. Events after the reporting date
A second interim dividend of 2.60p per Ordinary Share has been
declared for 2016 (2015: 2.55p). In accordance with the
requirements of IFRS, as this was not declared until after the
Statement of Financial Position date, no accrual has been reflected
in these financial statements for this amount. This dividend will
be payable on Friday, 12 May 2017, to Shareholders on the register
as at close of business on Friday, 17 March 2017. This, together
with the first interim dividend of 1.95p (six months ended 30 June
2015: 1.90p) paid during the year, makes a total of 4.55p for the
year. Subject to the approval by Shareholders and implementation of
the proposed reconstruction and winding up of the Company (further
details of which can be found in the Chairman's Statement), the
Company intends to continue with the policy of paying a second
interim dividend each year to Shareholders in May of the following
year in place of a final dividend. Scrip election forms were sent
to all Shareholders on Friday, 24 March 2017 and the latest date
for receipt by the Registrar of scrip elections is Tuesday, 25
April 2017.
The loan facility granted to the Company by Lloyds Bank Plc
expired on 26 March, 2017 and all outstanding amounts under the
loan facility, including interest accrued thereon, were repaid on
that date.
In accordance with the Company's articles of incorporation,
Shareholders are due to have an opportunity to vote on the
Company's continuation at the 2017 annual general meeting. However,
the Board is intending to publish a circular in late May 2017
(including a notice convening an extraordinary general meeting to
be held in late June 2017 (the "EGM")) in relation to the approval
by Shareholders of proposals concerning the reconstruction and
winding up of the Company. If those proposals are approved by
Shareholders and implemented, the 2017 AGM will not be held and no
continuation vote will take place.
In the light of the proposed reconstruction and winding up of
the Company, the Company has served notice on the Investment
Manager, such termination of appointment to be effective from 11.59
p.m. on 27 June 2017 or such later date as the scheme of
reconstruction and winding up shall become effective.
Ten Year Record- Unaudited
The Ten Year Record set out below has been prepared from the
accounting records of the Company. While it does not form part of
the financial statements, it should be read in conjunction with
them and the Auditor's report thereon.
Ordinary
Revenue Gross share Net
Net return dividends capital asset
revenue per per eligible value
Gross after ordinary ordinary for of ordinary
revenue taxation share share dividends shares
(Ex-div)
Year ended GBP'000
31 December (1&2) GBP'000 p p(3) GBP'000 p
2006 1,041 648 3.12 3.10 2,083 152.9
2007 1,241 824 3.96 3.25 2,071 158.3
2008 1,449 1,042 5.04 3.63 2,073 106.9
2009 1,075 746 3.61 3.75 2,058 149.8
2010 1,043 692 3.36 3.90 2,069 161.7
2011 1,307 907 4.38 4.10 2,074 142.1
2012 834 354 1.72 4.15 2,066 147.4
2013 1,152 704 3.30 4.25 2,189 181.3
2014 1,434 850 3.83 4.35 2,223 183.3
2015 1,507 895 4.05 4.45 2,214 189.4
2016 1,748 1,248 5.61 4.55 2,243 209.1
Notes:
(1) The information provided prior to 2006 in the above
statement is prepared in accordance with UK GAAP and not IFRS.
(2) Following the introduction of FRS 16 (IAS 12) all dividends
receivable from 1999 have been shown gross of withholding tax
whereas previously they were shown net.
(3) Following the introduction of FRS 21 (IAS 10) all dividends
paid by the Company from 2004 are accounted for in the period in
which the Company is liable to pay them. Such treatment is also
consistent with International Financial Reporting Standards. In
previous years, the Company accrued dividends in the period in
which the net revenue, to which those dividends related, was
accounted for.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKDDDOBKDQQB
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April 21, 2017 13:32 ET (17:32 GMT)
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