Notes:
1. Meets target that at least 40% of Directors are women as set
out in LR 9.8.6R (9)(a)(i).
2. Meets target that at least one
Director is from a minority ethnic background as set out in LR
9.8.6R (9)(a)(iii).
3. This column is not applicable as the
Company is externally managed and does not have any executive
staff, specifically it does not have either a CEO or CFO. The
Company considers that the roles of Chair of the Board, Senior
Independent Director and Chair of the Audit Committee are senior
board positions and accordingly that the Company meets in spirit
the requirement that at least one of the senior board positions is
held by a woman. The Company notes that, with effect from the
conclusion of the AGM on 5 November 2024, one of the four senior
board positions, as set out in LR 9.8.6R
(9)(a)(ii), will be occupied by a woman.
Directors' Insurance and
Indemnities
The Company's Articles of Association indemnify
each of the Directors out of the assets of the Company against any
liabilities incurred by them as a Director of the Company in
defending proceedings, or in connection with any application to the
Court in which relief is granted. In addition, the Directors have
been granted qualifying indemnity provisions by the Company which
are currently in force. Directors' and Officers' liability
insurance cover has been maintained throughout the Year at the
expense of the Company.
Corporate Governance
The Company is committed to high standards of
corporate governance and its Statement of Corporate
Governance.
Matters Reserved for the Board
The Board sets the Company's objectives and
ensures that its obligations to its shareholders are met. It has
formally adopted a schedule of matters which are required to be
brought to it for decision, thus ensuring that it maintains full
and effective control over appropriate strategic, financial,
operational and compliance issues.
These matters include:
· the
maintenance of clear investment objectives and risk management
policies;
· the monitoring
of the business activities of the Company ranging from analysis of
investment performance through to review of quarterly management
accounts;
· monitoring
requirements such as approval of the Half-Yearly Report and Annual
Report and financial statements and approval and recommendation of
any dividends;
· setting the
range of gearing in which the Manager may operate;
· major changes
relating to the Company's structure including share buybacks and
share issuance;
· Board
appointments and removals and the related terms;
· authorisation
of Directors' conflicts or possible conflicts of
interest;
· terms of
reference and membership of Board Committees;
· appointment
and removal of the Manager and the terms and conditions of the
Management Agreement relating thereto; and
· London Stock
Exchange/Financial Conduct Authority - responsibility for approval
of all circulars, listing particulars and other releases concerning
matters decided by the Board.
Full and timely information is provided to the
Board to enable it to function effectively and to allow the
Directors to discharge their responsibilities.
Board Committees
The Board has appointed a number of Committees
as set out below. Copies of their terms of reference, which define
the responsibilities and duties of each Committee, are available on
the Company's website.
Audit Committee
The Audit Committee Report is set out
below.
Management Engagement Committee
The terms and conditions of the Company's
agreement with the Manager, set out above, are considered by the
Management Engagement Committee which comprises the whole Board and
was chaired by Neil Rogan until 7 November 2023 and by Peter Tait
thereafter. The key responsibilities of the Management Engagement
Committee include:
· monitoring and
evaluating the performance of the Manager;
· assessing the
Manager's discharge of its responsibilities under Consumer
Duty;
· reviewing, at
least annually, the continued retention of the Manager;
and
· reviewing, at
least annually, the terms of appointment of the Manager including,
but not limited to, the level and methodology of the management
fees as well as the notice period of the Manager.
In monitoring the performance of the Manager,
the Committee considers the investment record of the Company over
the short and long term, taking into account its performance
against the Benchmark, peer group investment trusts and open-ended
funds, and against its delivery of the investment objective to
shareholders. The Committee also reviews the management processes,
risk control mechanisms and promotional activities of the
Manager.
At its meeting in May 2024, the Committee
reviewed covering all of the services provided to the Company by
the Manager including investment management, risk management and
internal controls, marketing and investor relations, company
secretarial and administration services, and also included
consideration as to the appropriateness of the management fee
arrangements. In light of the outcome of the review, the Directors
consider the continuing appointment of the Manager, on the current
terms (see above), to be in the best interests of shareholders
because they believe that the Manager has the investment
management, promotional and associated secretarial and
administrative skills required for the effective operation of the
Company.
Consumer Duty
The FCA's Consumer Duty rules, published in July
2022, are a fundamental component of the FCA's consumer protection
strategy and aim to improve outcomes for retail customers across
the entire financial services industry through the assessment of
various outcomes, one of which is an assessment of whether a
product provides value. Under the Consumer Duty, the Manager is the
product 'manufacturer' of the Company and therefore the Manager was
required to publish an annual assessment of value from April 2023.
The Manager uses its proprietary assessment methodology to assess
the Company as 'expected to provide fair value for the reasonably
foreseeable future'. The Committee reviewed the Manager's basis of
assessment and no concerns were identified with either the
assessment method or the outcome of the assessment.
Nomination Committee
The Board has established a Nomination
Committee, comprising all of the Directors, with Neil Rogan as
Chair until 7 November 2023 and Peter Tait thereafter. The
Committee is responsible for:
· determining
the overall size and composition of the Board (including the
skills, knowledge, experience and diversity);
· undertaking
longer term succession planning, including setting a policy on
tenure for Directors;
· undertaking an
annual evaluation of the Directors, including establishing that
each Director possesses the capacity to commit sufficient time to
discharge their responsibilities;
· oversight of
appointments to the Board, including open advertising or engagement
of independent search consultants, with a view to attracting
candidates from a wide range of backgrounds and with different
experience, with due regard to the benefits of diversity on the
Board;
· assessing,
annually, the effectiveness and independence of each Director;
and
· making
recommendations for the election or re-election of any Director,
having evaluated their individual performance, capacity and
contribution.
The Committee's overriding priority in
appointing new Directors is to identify the candidate with the
optimal range of skills and experience to complement the existing
Directors. The Board also recognises the benefits, and is
supportive, of the principle of diversity in its recruitment of new
Directors. Nurole Limited, an independent search firm with no
connection with the Company, was engaged in the search which
resulted in the appointment of Angus Franklin as a Director during
the Year.
The Committee has reviewed the Board succession
plan and has commenced the recruitment of a new Director who is
expected to be appointed by early 2025.
During the Year, through the work of
the Nomination Committee, the Directors undertook a review of the
Board, its Committees and the performance of individual Directors.
The process involved the completion of questionnaires by each
Director with the results discussed by the Board thereafter, with
appropriate action points agreed. Following the
evaluation process, the Board concluded that it operates
effectively to promote the success of the Company and that each
Director makes a significant contribution to the collective Board.
The review of the Chair was undertaken by the Senior Independent
Director.
The biographies of each of the Directors seeking
re-election are shown on the Company's website and include their
experience, length of service and the contribution that each
Director makes to the Board. Each Director
has the requisite high level and range of business and financial
experience which enables the Board to provide clear and effective
leadership and proper stewardship of the Company.
Policy on Tenure
The Committee has adopted a policy whereby all
Directors will stand for re-election at each AGM. In addition
Directors, including the Chair, will not stand for re-election as a
Director of the Company later than the AGM following the ninth
anniversary of their appointment to the Board unless in relation to
exceptional circumstances.
Re-election of
Directors
During the Year, each Director attended all
meetings for which they were eligible, as set out in the table.
The Board meets more frequently when business needs
require:
|
|
Board Meetings
(7)
|
Audit Committee
Meetings
(3)
|
Management
Engagement
Committee
Meetings
(1)
|
Nomination Committee
Meetings
(3)
|
Remuneration Committee
Meetings
(1)
|
|
Peter TaitA
|
7
|
1
|
1
|
3
|
1
|
|
Alan Giles
|
7
|
3
|
1
|
3
|
1
|
|
Stephanie Eastment
|
7
|
3
|
1
|
3
|
1
|
|
Nandita Sahgal Tully
|
7
|
3
|
1
|
3
|
1
|
|
Angus Franklin B
|
3
|
2
|
1
|
2
|
1
|
|
Neil RoganA, C
|
3
|
-
|
-
|
-
|
-
|
|
Merryn Somerset Webb C
|
3
|
1
|
-
|
-
|
-
|
|
A The Chair of the
Board is not a member of the Audit Committee but attended all of
the meetings at the invitation of the Committee Chair. Peter Tait
succeeded Neil Rogan as Chair of the Board on 7 November
2023.
B Appointed a Director
on 1 January 2024.
C Resigned as a
Director on 7 November 2023.
|
|
|
|
|
|
|
|
| |
The Board as a whole believes that Peter Tait,
Stephanie Eastment, Nandita Sahgal Tully and Angus Franklin each
remains independent of the Manager and free of any relationship
which could materially interfere with the exercise of his or her
independent judgement on issues of strategy, performance, resources
and standards of conduct and confirms that, following formal
performance evaluations, the individuals' performance continues to
be effective and demonstrates commitment to the role.
Alan Giles is not standing for re-election as a
Director and will retire from the Board at the conclusion of the
AGM. Peter Tait, Stephanie Eastment and Nandita Sahgal Tully, each
being eligible, offer themselves for re-election as Directors of
the Company at the AGM on 5 November 2024. Angus Franklin, being
eligible, offers himself for election as a Director of the
Company.
Remuneration Committee
The Board has established a Remuneration
Committee, comprising all of the Directors, whose Chair was Peter
Tait, until 7 November 2023, when he was succeeded by Alan Giles.
The Directors' Remuneration Report on 47 to 50 sets out the
responsibilities of the Committee and work undertaken by the
Committee during the Year.
Accountability and Audit
The responsibilities of the Directors and the
auditor in connection with the financial statements appear in the
Statement of Responsibilities of Directors and in the Independent
Auditor's Report.
The Directors who held office at the date of
this Report each confirm that, so far as they are aware, there is
no relevant audit information of which the Company's auditor is
unaware and that they have taken all the steps that they could
reasonably be expected to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish
that the Company's auditor is aware of that information. Further,
there have been no important, additional events since the year end
which warrant disclosure. The Directors confirm that no non-audit
services were provided by the auditor during the Year and, after
reviewing the auditor's procedures in connection with the provision
of any such services, remain satisfied that the auditor's
objectivity and independence is being safeguarded.
Going Concern
The Directors have undertaken a
rigorous review and consider both that there are no material
uncertainties and that the adoption of the going concern basis of
accounting is appropriate. This conclusion is consistent with
the longer term Viability Statement.
The Company's assets consist primarily of a
diverse portfolio of listed equity shares nearly all of which, in
most circumstances, are realisable within a short timescale. The
Board has set limits for borrowing and regularly reviews the level
of any gearing, cash flow projections and compliance with banking
and loan note covenants.
The Directors are mindful of the principal risks
and uncertainties and have reviewed forecasts detailing revenue and
liabilities. The Directors are satisfied that the Company has
adequate resources to continue in operational existence for the
foreseeable future, being at least 12 months from the date of
approval of this Annual Report.
Relations with Shareholders
The Directors place great importance on
communication with shareholders noting that the Company's
shareholder register is retail-dominated. The Manager, together
with the Company's broker, regularly meets with current and
prospective shareholders to discuss performance. The Board receives
investor relations updates from the Manager on at least a quarterly
basis. Any changes in the shareholder register as well as
shareholder feedback is discussed by the Directors at each Board
meeting.
Regular updates are provided to shareholders
through the Annual Report, Half Yearly Report, monthly factsheets
and company announcements, including daily net asset values, all of
which are available through the Company's website at:
murray-income.co.uk. The Annual
Report is also widely distributed to other parties who have an
interest in the Company's performance. Shareholders and investors
may obtain up-to-date information on the Company through its
website or by contacting the Company via email to:
new.india@abrdn.com.
The Board's policy is to communicate directly
with shareholders and their representative bodies without the
involvement of the management group (either the Company Secretary
or abrdn) in situations where direct communication is required and
representatives from the Board offer to meet with major
shareholders on an annual basis in order to gauge their views. The
Company Secretary acts on behalf of the Board, not the Manager, and
there is no filtering of communication. At each Board meeting the
Board receives full details of any communication from shareholders
to which the Chair responds, as appropriate, on behalf of the
Board.
In addition, in relation to institutional
shareholders, members of the Board may be either accompanied by the
Manager or conduct meetings in the absence of the
Manager.
The Company's Annual General Meeting ordinarily
provides a forum, both formal and informal, for shareholders to
meet and discuss issues with the Directors and Investment Manager.
The Notice of AGM included within the Annual Report is normally
sent out at least 20 working days in advance of the
meeting.
The Company will also hold an online
presentation for existing and potential shareholders on 17 October
2024. Further information on how to register may be found in the
Chair's Statement.
Relations with Suppliers, Customers and
Others
The Directors have regard to the need to foster
the Company's business relationships with suppliers, customers and
others, and the effect of that regard, including on the principal
decisions taken by the Company during the financial year; further
information on the Company's responsibilities under Section 172 of
Companies Act 2006 may be found below.
Independent Auditor
Shareholders approved the re-appointment of
PricewaterhouseCoopers LLP as the Company's auditor at the AGM on 7
November 2023 and resolutions to approve its re-appointment for the
year to 30 June 2025, and to authorise the Audit Committee to
determine its remuneration, will be proposed at the forthcoming
AGM.
Substantial Interests
As at 30 June 2024 and 31 August 2024 the
following interests over 3% in the issued Ordinary share capital of
the Company (excluding treasury shares) had been disclosed in
accordance with the requirements of the FCA's Guidance and
Transparency Disclosure Rules:
|
|
30 June 2024
|
31 August 2024
|
|
Shareholder
|
Number of shares held
|
%
held
|
Number of shares held
|
%
held
|
|
Interactive Investor
(execution only)
|
24,953,313
|
23.8
|
24,652,971
|
23.7
|
|
Hargreaves Lansdown
(execution only)
|
15,848,366
|
15.1
|
15,782,138
|
15.2
|
|
Rathbones
|
10,361,162
|
9.9
|
10,129,234
|
9.7
|
|
A J Bell
(execution only)
|
4,214,331
|
4.0
|
4,252,875
|
4.1
|
|
Halifax Share Dealing
(execution only)
|
3,543,971
|
3.4
|
3,504,149
|
3.4
|
The Company had not been notified of any
change to the above interests, at 31 August 2024, as at the date of
approval of this Report.
Future Developments of the Company
Disclosures relating to the future developments
of the Company may be found in the Chair's Statement.
Disclosures Required by FCA Listing Rule
9.8.4
This rule requires listed companies to report
certain information in a single identifiable section of their
annual financial reports. None of the prescribed information is
applicable to the Company in the Year.
Financial Instruments
The financial risk management objectives and
policies arising from financial instruments and the exposure of the
Company to risk are disclosed in note 18 to the financial
statements.
Annual General Meeting ("AGM")
Among the special business being put at the AGM
of the Company to be held on 5 November 2024, the following
resolutions will be proposed:
Authority to allot shares and disapply pre-emption rights
(Resolutions 10 and 11)
Ordinary resolution 10 will renew the authority
to allot the unissued share capital up to an aggregate nominal
amount of £1.3m (equivalent to approximately 5.2m Ordinary shares,
or, if less, 5% of the Company's existing issued share capital
(excluding treasury shares) on the date of passing of this
resolution). Such authority will expire on the date of the AGM in
2025 or on 31 December 2025, whichever is earlier. This means that
the authority will require to be renewed at the next
AGM.
When shares are to be allotted for cash, Section
561 of the Companies Act 2006 (the "Act") provides that existing
shareholders have pre-emption rights and that the new shares to be
issued, or sold from treasury, must be offered first to such
shareholders in proportion to their existing holding of shares.
However, shareholders can, by special resolution, authorise the
Directors to allot shares or sell from treasury otherwise than by a
pro rata issue to existing shareholders. Special resolution 11
will, if passed, give the Directors power to allot for cash or sell
from treasury equity securities up to an aggregate nominal amount
of £2.6m (equivalent to approximately 10.4m Ordinary shares, or, if
less, 10% of the Company's existing issued share capital
(excluding treasury shares) on the date of passing of this
resolution, as if Section 561 of the Act does not apply). This
authority will also expire on the date of the AGM in 2025 or on 31
December 2025, whichever is earlier. This authority will not be
used in connection with a rights issue by the Company.
The Directors intend to use the authorities
given by resolutions 10 and 11 to allot shares or sell shares from
treasury and disapply pre-emption rights only in circumstances
where this will be clearly beneficial to shareholders as a whole.
The issue proceeds would be available for investment in line with
the Company's investment policy. No issue of shares will be made
which would effectively alter the control of the Company without
the prior approval of shareholders in general meeting. It is the
intention of the Board that any issue of shares or any re-sale of
treasury shares would only take place at a price not less than 0.5%
above the NAV per share prevailing at the date of sale. It is also
the intention of the Board that sales from treasury would only take
place when the Board believes that to do so would assist in the
provision of liquidity to the market.
Purchase of the Company's own Ordinary shares
(Resolution 12)
At the AGM held on 7 November 2023, shareholders
approved the renewal of the authority permitting the Company to
repurchase its Ordinary shares. The Directors wish to renew the
authority given by shareholders at the previous AGM. A share
buyback facility enhances shareholder value by acquiring shares at
a discount to NAV as and when the Directors consider this to be
appropriate. The purchase of shares, when they are trading at a
discount to NAV per share, should result in an increase in the NAV
per share for the remaining shareholders. This authority, if
conferred, will only be exercised if to do so would result in an
increase in the NAV per share for the remaining shareholders and if
it is in the best interests of shareholders generally. Any purchase
of shares will be made within guidelines established from time to
time by the Board. It is proposed to seek shareholder authority to
renew this facility for another year at the AGM.
Under the FCA's Listing Rules, the maximum price
that may be paid on the exercise of this authority must not exceed
the higher of (i) 105% of the average of the middle market
quotations for the shares over the five business days immediately
preceding the date of purchase and (ii) the higher of the last
independent trade and the highest current independent bid on the
trading venue where the purchase is carried out. The minimum price
which may be paid is 25p per share. Shares which are purchased
under this authority will either be cancelled or held as treasury
shares. Special resolution 12 will renew the authority to purchase
in the market a maximum of 14.99% of shares in issue at the date of
passing of the resolution (amounting to approximately 15.5m
Ordinary shares). Such authority will expire on the date of the AGM
in 2025, or on 31 December 2025, whichever is earlier. This means
in effect that the authority will have to be renewed at the next
AGM, or earlier, if the authority has been exhausted. No dividends
may be paid on any shares held in treasury and no voting rights
will attach to such shares. The benefit of the ability to hold
treasury shares is that such shares may be sold at short notice.
This should give the Company greater flexibility in managing its
share capital, and improve liquidity in its shares.
Recommendation
The Directors believe that the resolutions to be
proposed at the AGM are in the best interests of the Company and
its shareholders as a whole, and recommend that shareholders vote
in favour of the resolutions, as the Directors intend to do in
respect of their own beneficial shareholdings, amounting to 21,404
Ordinary shares, representing 0.02% of the Company's issued share
capital (excluding treasury shares) at 30 June 2024.
On behalf of the Board
Peter Tait
Chair
17 September 2024
Statement of Corporate Governance
Murray Income Trust PLC (the "Company") is
committed to high standards of corporate governance. The Board is
accountable to the Company's shareholders for good governance and
this statement describes how the Company has applied the principles
identified in the UK Corporate Governance Code as published in July
2018 (the "UK Code"), which is available on the Financial Reporting
Council's (the "FRC") website: frc.org.uk, and is applicable for the Company's
Year.
The Board has also considered the principles and
provisions of the AIC Code of Corporate Governance as published in
February 2019 (the "AIC Code"). The AIC Code addresses the
principles and provisions set out in the UK Code, as well as
setting out additional provisions on issues that are of specific
relevance to the Company. The AIC Code is available on the AIC's
website: theaic.co.uk.
The Board considers that reporting against the
principles and provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders.
The Board confirms that, during the Year, the
Company has complied with the principles and provisions of the AIC
Code and the relevant provisions of the UK Code, except for those
provisions relating to:
· the role and
responsibility of the chief executive;
· executive
directors' remuneration; and
· the
requirement for an internal audit function.
The Board considers that these provisions are
not relevant to the position of the Company being an externally
managed investment company. In particular, all of the Company's
day-to-day management and administrative functions are outsourced
to third parties. As a result, the Company has no executive
directors, employees or internal operations. The Company has
therefore not reported further in respect of these
provisions.
Information on how the Company has applied the
AIC Code, the UK Code, the Companies Act 2006 and the FCA's DTR
7.2.6 can be found in the published Annual Report:
· the
composition and operation of the Board and its Committees are
detailed in the Directors' Report and Report of the Audit
Committee;
· the Board's
policy on diversity, and related information, is in the Directors'
Report;
· the Company's
approach to internal control and risk management is detailed in the
Report of the Audit Committee;
· the
contractual arrangements with the Manager and details of the annual
assessment of the Manager may be found in the Directors' Report and
section on the Management Engagement Committee;
· the Company's
capital structure and voting rights are summarised in the
Directors' Report;
· the
substantial interests disclosed in the Company's shares are listed
in the Directors' Report;
· the rules
concerning the appointment and replacement of Directors are
contained in the Company's Articles of Association and are
summarised in the Directors' Remuneration Report. There are no
agreements between the Company and its Directors concerning
compensation for loss of office; and
· the powers to
issue or buyback the Company's ordinary shares, which are sought
annually, and any amendments to the Company's Articles of
Association require a special resolution (75% majority) to be
passed by shareholders and information on these resolutions may be
found in the Directors' Report.
By order of the Board
abrdn Holdings Limited, Secretaries
1 George Street
Edinburgh
EH2 2LL
17 September 2024
Directors' Remuneration Report
The Remuneration Committee, established by the
Board, has prepared this Directors' Remuneration Report which
consists of three parts:
a) a Remuneration Policy,
which is subject to a binding shareholder vote every three years,
was most recently voted on at the AGM on 7 November 2023 where the
result of the poll on the relevant resolution was: For - 33,554,452
votes (99.2%); Against - 277,825 votes (0.8%); and Withheld -
217,548 votes. The Remuneration Policy will be put to a shareholder
vote no later than the AGM in 2026;
b) an annual Implementation
Report, which is subject to an advisory vote; and
c) an Annual
Statement.
The fact that the Remuneration Policy is subject
to a binding vote at least every three years does not imply any
change on the part of the Company. The principles remain the
same as for previous years. There has been no change to the
Remuneration Policy during the period of this Report, since the AGM
on 7 November 2023.
The law requires the Company's auditor to audit
certain of the disclosures provided in this report. Where
disclosures have been audited, they are indicated as such. The
independent auditor's opinion is included in the published Annual
Report.
Remuneration Policy
This part of the Report provides details of the
Company's Policy for Directors of the Company, which takes into
consideration corporate governance principles, and which was
approved by shareholders at the AGM on 7 November 2023. The Board
considers, where raised, shareholders' views on Directors'
remuneration.
Fees for Directors are determined by the Board
within the limit stated in the Company's Articles of Association
(the "Articles"). The Articles limit aggregate fees to £250,000 per
annum. The limit can be amended by shareholder resolution and was
last increased at the AGM in 2017.
The remuneration of Directors is reviewed
annually, although such review may not necessarily result in any
change. The annual review ensures that remuneration supports the
strategic objectives of the Company, reflects Directors' duties and
responsibilities, expected time commitment, the level of skills and
experience required, and the need for Directors to maintain on an
ongoing basis an appropriate level of knowledge of regulatory and
compliance requirements in an industry environment of increasing
complexity. Remuneration should be fair and comparable to that of
similar investment trusts.
The Policy applies to any new Directors who
will be paid the appropriate fee based on the Directors' fees level
in place at the date of appointment.
· The Company
has no employees and consequently has no policy on the remuneration
of employees.
· All the
Directors are non-executive and are appointed under the terms of
letters of appointment.
· Directors do
not have service contracts.
· No incentive
or introductory fees will be paid to encourage a
directorship.
· Directors'
remuneration is not subject to any performance-related
fee.
· Directors are
not eligible for bonuses, pension benefits, share options, long
term incentive schemes or other benefits.
· Directors are
not entitled to exit payments or any compensation for loss of
office.
· Directors are
entitled to be reimbursed for any reasonable expenses properly
incurred in the performance of their duties.
· Directors can
be paid additional discretionary payments for services which , in
the opinion of the Directors, are outside of the scope of the
ordinary duties of a Director.
· The terms of
appointment provide that a Director may be removed subject to three
months' written notice.
· Directors must
retire and be subject to re-election at the first AGM after their
appointment; the Company has also determined that every Director
will stand for re-election at each AGM.
· No Director
will stand for re-election as a Director of the Company later than
the AGM following the ninth anniversary of their appointment to the
Board unless in relation to exceptional circumstances.
· The Company
indemnifies its Directors for all costs, charges, losses together
with certain expenses and liabilities which may be incurred in the
discharge of duties, as a Director of the Company.
Directors' & Officers' liability insurance
cover is maintained by the Company on behalf of the
Directors.
Implementation Report
Directors' Fees
The level of fees for the Year and the preceding
year are set out in the table below. There are no further fees to
disclose as the Company has no employees, Chief Executive or
Executive Directors.
|
|
30 June 2024
£
|
30 June 2023
£
|
|
Chair
|
43,125
|
41,200
|
|
Audit Committee Chair
|
35,950
|
34,300
|
|
Senior Independent Director
|
31,625
|
30,200
|
|
Director
|
28,750
|
27,500
|
Directors' fees were last revised on 1 July
2023. The Board carried out a review of Directors' annual fees
during the Year by reference to inflation, measured by the increase
in the Consumer Prices Index since 1 July 2023, and taking account
of peer group comparisons by sector and by market capitalisation.
Following this review, it was decided that the Directors' base fee
would be increased by approximately 3.5% (2023 - 4.5%), with
similar increases for other positions. With effect from 1 July
2024, Directors' fees are £44,625 for the Chair, £37,200 for the
Audit Committee Chair, £32,725 for the Senior Independent Director
and £29,750 for the other Directors.
These increased fees are considered to reflect
increases in inflation and to be commensurate with the time
commitment required of Directors of the Company to adequately
discharge their responsibilities, taking into account increasingly
complex and onerous regulatory requirements.
Company Performance
The graph (in the published Annual Report) shows
the share price total return (assuming all dividends are
reinvested) to Ordinary shareholders compared to the total return
from the FTSE All-Share Index for the ten year period ended 30 June
2024 (rebased to 100 at 30 June 2014). This index was chosen for
comparison purposes, as it is the benchmark used for investment
performance measurement purposes.
Statement of Proxy Voting at Annual General
Meeting
At the Company's latest AGM, held on 7 November
2023, shareholders approved the Directors' Remuneration Report
(other than the Directors' Remuneration Policy) in respect of the
year ended 30 June 2023, where the result of the poll on the
relevant resolution was: For - 33,676,593 (99.4%); Against -
192,560 votes (0.6%); and Withheld - 180,672 votes.
Audited Information
Directors' Remuneration
The Directors received remuneration in the form
of fees and taxable expenses as set out in the tables
below
The Directors' remuneration excludes any
employers' national insurance contributions, if applicable. All
remuneration is fixed in nature and there is no variable
remuneration. Fees are pro-rated where a change takes place during
a financial year. No payments were made to third parties. There are
no other fees to disclose as the Company has no employees, chief
executive or executive directors. Taxable expenses refer to amounts
claimed by Directors for travelling to attend meetings.
Directors' Remuneration Table
(audited)
|
|
Year ended 30 June 2024
|
Year ended 30 June 2023
|
|
|
Fees
£
|
Taxable Expenses
£
|
Total
£
|
Fees
£
|
Taxable Expenses
£
|
Total
£
|
|
Peter Tait (appointed Chair on 7 November
2023)
|
39,068
|
573
|
39,641
|
30,200
|
907
|
31,107
|
|
Stephanie Eastment
|
35,950
|
511
|
36,461
|
34,300
|
188
|
34,488
|
|
Alan Giles (appointed SID on 7
November 2023)
|
30,611
|
371
|
30,982
|
27,500
|
91
|
27,591
|
|
Nandita Sahgal Tully
|
28,750
|
476
|
29,226
|
27,500
|
204
|
27,704
|
|
Angus Franklin (appointed a Director on 1
January 2024)
|
14,375
|
-
|
14,375
|
n/a
|
n/a
|
n/a
|
|
Neil Rogan (retired as a Director on 7 November
2023)
|
15,213
|
1,446
|
16,659
|
41,200
|
502
|
41,702
|
|
Merryn Somerset Webb (retired as a Director on
7 November 2023)
|
10,142
|
-
|
10,142
|
27,500
|
1,312
|
28,812
|
|
Total
|
174,109
|
3,377
|
177,486
|
188,200
|
3,204
|
191,404
|
|
|
|
|
|
|
|
|
|
|
| |
Annual Percentage Change in Directors'
Remuneration
The table below sets out, for the Directors who
served during the Year, the annual percentage change in Directors'
fees for the past five years.
|
|
Year ended 30 June 2024
|
Year ended 30 June 2023
|
Year ended 30 June 2022
|
Year ended 30 June 2021
|
Year ended 30 June 2020
|
|
|
Fees
%
|
Fees
%
|
Fees
%
|
Fees
%
|
Fees
%
|
|
Peter Tait (appointed SID on 2 November 2021
and Chair on 7 November 2023)
|
29.4 C
|
5.6
|
12.1
|
0.0
|
0.0
|
|
Stephanie Eastment
|
4.8
|
2.4
|
11.7
|
0.0
|
14.3
|
|
Alan Giles (appointed on 17 November
2020)
|
11.3 C
|
2.6
|
68.9 B
|
See note A
|
n/a
|
|
Nandita Sahgal Tully (appointed on 3 November
2021)
|
4.5
|
55.2 B
|
See note A
|
n/a
|
n/a
|
|
Angus Franklin (appointed on 1 January
2024)
|
See note A
|
n/a
|
n/a
|
n/a
|
n/a
|
|
Neil Rogan (retired on 7 November
2023)
|
See note A
|
2.5
|
7.2
|
0.0
|
0.0
|
|
Merryn Somerset Webb (appointed on 7 August
2019 and retired on 7 November 2023)
|
See note A
|
2.6
|
5.1
|
11.0 B
|
See note A
|
|
A A meaningful
percentage change figure cannot be calculated in the year of
appointment or for a year when a Director resigns/retires.
B If the Director had been appointed for the whole
of the previous year, the annual change figure would have been nil
for Merryn Somerset Webb, 5.1% for Alan Giles and 2.6% for Nandita
Sahgal Tully.
C In a year of
change to a more senior role, and in the following year, the
percentage change figures will be distorted to show a higher figure
than the 'real' change of fee levels in the year.
|
|
|
|
|
|
|
|
|
Spend on Pay
As the Company has no employees, the Directors
do not consider it appropriate to present a table comparing
remuneration paid to Directors with distributions to shareholders.
However, for ease of reference, the total fees paid to Directors
are shown in the table below while dividends paid to
shareholders are set out in note 7 and share buybacks are detailed
in note 15.
Directors' Interests in the Company (audited)
The Directors are not required to have a
shareholding in the Company. The Directors (including their persons
closely associated) at 30 June 2024, and 30 June 2023, had no
interest in the share capital of the Company other than those
interests shown below, all of which are beneficial interests,
unless indicated otherwise:
|
|
30 June 2024
|
30 June 2023
|
|
Director
|
Ord 25p
|
Ord 25p
|
|
Peter Tait
|
7,000
|
7,000
|
|
Alan Giles
|
5,000
|
5,000
|
|
Stephanie Eastment
|
4,500 A
|
4,500 A
|
|
Nandita Sahgal Tully
|
560
|
560
|
|
Angus Franklin
|
6,044
|
n/a
|
|
Neil Rogan
|
44,719 B
|
44,719
|
|
Merryn Somerset Webb
|
3,449 B
|
3,449
|
|
A Of which 1,700
shares were held non-beneficially
B As at date of
retirement on 7 November 2023
|
There have been no changes to the Directors'
interests in the share capital of the Company since the year end up
to the date of approval of this Report.
Annual Statement
On behalf of the Board and in accordance with
Part 2 of Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013, I
confirm that the above Report on Remuneration Policy and
Remuneration Implementation summarises, as applicable, for the
Year:
· the major
decisions on Directors' remuneration;
· any
substantial changes relating to Directors' remuneration made during
the Year; and
· the context
in which the changes occurred and in which decisions have been
taken.
On behalf of the Board
Alan Giles
Chair of the Remuneration Committee
17 September 2024
Audit Committee Report
Stephanie Eastment is Chair of the audit
committee, membership of which comprises all of the Directors of
the Company, with the exception of the Chair of the Board. In
compliance with the July 2018 UK Code on Corporate Governance (the
"Code"), the Chair of the Board is not a member of the committee
but attends the committee by invitation of the committee
Chair.
The Directors have satisfied themselves that at
least two of the committee's members have recent and relevant
financial experience - Stephanie Eastment and Nandita Sahgal Tully
are both Fellows, and Angus Franklin is a Member, of the Institute
of Chartered Accountants in England & Wales - and that,
collectively, the committee possesses competence relevant to
investment trusts.
The committee meets at least twice each year, in
line with the cycle of annual and half-yearly reports, which is
considered by the Directors to be a frequency appropriate to the
size and complexity of the Company.
Role of the Audit Committee
In summary, the committee's main audit review
functions are:
· to review and
monitor the internal control systems and risk management systems
(including review of non-financial risks) on which the Company is
reliant (see "Internal Controls and Risk Management",
below);
· to consider
annually whether there is a need for the Company to have its own
internal audit function;
· to monitor the
integrity of the half-yearly and annual financial statements of the
Company by reviewing, and challenging where necessary, the actions
and judgements of the Manager;
· to review, and
report to the Board on, the significant financial reporting issues
and judgements made in connection with the preparation of the
Company's financial statements, half-yearly reports, announcements
and related formal statements;
· to review the
content of the Annual Report and financial statements and advise
the Board on whether, taken as a whole, it is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy;
· to meet with
the external auditor to review their proposed audit programme of
work and the findings as auditor;
· to develop and
implement a policy on the engagement of the auditor to supply
non-audit services;
· to review a
statement from the Manager detailing the arrangements in place for
the Manager's staff, in confidence, to escalate concerns about
possible improprieties in matters of financial reporting or other
matters ("whistleblowing");
· to oversee and
manage audit tenders and selection processes, to make
recommendations to the Board in relation to the appointment of the
auditor and removal of the auditor and to approve the remuneration
and terms of engagement of the auditor;
· to monitor and
review annually the auditor's independence, objectivity,
effectiveness, resources and qualification; and
· to investigate
the reasons giving rise to any resignation of the auditor and
consider whether any action is required.
The committee fulfilled all the above required
roles and responsibilities during the Year.
Internal Controls and Risk Management
Through the committee, the Board is ultimately
responsible for the Company's system of internal control and risk
management and for reviewing its effectiveness. The committee
confirms that there is a robust process for identifying, evaluating
and managing the Company's significant business and operational
risks, that it has been in place for the Year and up to the date of
approval of the Annual Report and Financial Statements, and that it
is regularly reviewed by the Board and accords with the risk
management and internal control guidance for directors in the
Code.
The design, implementation and maintenance of
controls and procedures to safeguard the assets of the Company and
to manage its affairs extends to operational and compliance
controls and risk management.
The Directors have delegated the investment
management of the Company's assets to the Manager within overall
guidelines and this embraces implementation of the system of
internal control, including financial, operational and compliance
controls and risk management. Internal control systems are
monitored and supported by the Manager's Internal Audit department
which undertakes periodic examination of business processes and
ensures that recommendations to improve controls are
implemented.
Risks are identified and documented through a
risk management framework by each function within the Manager's
activities. Risk is considered in the context of the FRC and AIC
Code guidance, and includes financial, regulatory, market,
operational and reputational risks. This helps the internal audit
risk assessment model identify those functions for review. Any
weaknesses identified are reported to the Board, and timetables are
agreed for implementing improvements to systems. The implementation
of any remedial action required is monitored and feedback provided
to the Board.
The principal risks and uncertainties facing the
Company are identified in the Overview of Strategy.
The key components designed to provide effective
internal control are outlined below:
· the Manager
prepares forecasts and management accounts which allow the Board to
assess the Company's activities and review its performance; the
emphasis is on obtaining the relevant degree of assurance and not
merely reporting by exception;
· the Board and
Manager have agreed clearly-defined investment criteria, specified
levels of authority and exposure limits. Reports on these,
including performance statistics and investment valuations, are
regularly submitted to the Board and there are meetings with the
Manager as appropriate;
· as a matter of
course, the Manager's compliance department continually reviews the
Manager's operations;
· written
agreements are in place which specifically define the roles and
responsibilities of the Manager and other third-party service
providers and the committee reviews, where relevant, ISAE3402
Reports, a global assurance standard for reporting on internal
controls for service organisations; in particular, the Board
receives equivalent assurance from Link Group, the Company's
Registrar; and
· at
its September 2024 meeting, the committee carried out its annual
assessment of internal controls for the Year including the internal
audit and compliance functions, and taking account of events since
30 June 2024.
In addition, the Manager ensures that clearly
documented contractual arrangements exist in respect of any
activities that have been delegated to external professional
organisations. A senior member of the Manager's Internal Audit
department reports six-monthly to the committee and has direct
access to the Directors at any time.
Internal control systems are designed to meet
the Company's particular needs and the risks to which it is
exposed. Accordingly, the internal control systems are designed to
manage, rather than eliminate, the risk of failure to achieve
business objectives and, by their nature, can only provide
reasonable, and not absolute, assurance against misstatement and
loss.
Significant Risks for the Audit Committee
During its review of the Company's financial
statements for the Year, the committee considered the following
significant risks including, in particular, those communicated by
the auditor as key areas of audit emphasis during their planning
and reporting of the year end audit:
Valuation and Existence of
Investments
How the risk was
addressed
The valuation of investments is undertaken in
accordance with the accounting policies, disclosed in note 2(e) to
the financial statements. All investments are considered liquid and
quoted in active markets and have been categorised as Level 1
within the FRS 102 fair value hierarchy and can be verified against
daily market prices. The portfolio is reviewed and verified by the
Manager on a regular basis and management accounts, including a
full portfolio listing, are prepared each month and circulated to
the Board. The Company used the services of an independent
depositary (BNP Paribas Trust Corporation UK Limited
until 31 May 2024 and BNP Paribas SA, London Branch
thereafter) through which the assets of the Company were held. The
depositary confirmed that the accounting records correctly
reflected all investee holdings and that these agreed to custodian
records.
Income Recognition
How the risk was
addressed
The recognition of investment income is
undertaken in accordance with accounting policy note 2(b) to the
financial statements. Special dividends are allocated to the
capital or revenue accounts according to the nature of the payment
and the intention of the underlying company. The Directors also
review, at each meeting, the Company's income, including income
received, revenue forecasts and dividend comparisons.
Internal Auditor
The Board has considered the need for an
internal audit function but, because the Company is
externally-managed, the Board has decided to place reliance on the
Manager's risk management/internal controls systems and internal
audit procedures.
External Auditor
Review of the Auditor
The committee has reviewed the effectiveness
of the auditor including:
· independence -
the auditor discusses with the committee, at least annually, the
steps it takes to ensure its independence and objectivity,
including the level of non-audit fees it has received from the
Company, and makes the committee aware of any potential issues,
explaining all relevant safeguards;
· quality of
audit work including the ability to resolve issues in a timely
manner - identified issues are satisfactorily and promptly
resolved;
· its
communications/presentation of outputs - the explanation of the
audit plan, any deviations from it and the subsequent audit
findings are comprehensive and comprehensible, and working
relationship with management - the auditor has a constructive
working relationship with the Manager; and
· quality of
people and service including continuity and succession plans - the
audit team is made up of sufficient, suitably experienced staff
with provision made for knowledge of the investment trust sector
and retention of that knowledge on rotation of the
partner.
For the Year, the committee was satisfied with
the auditor's effectiveness, independence and the objectivity of
the audit process.
Re-appointment of the Auditor
This year's audit of the Company's Annual Report
is the fifth performed by PricewaterhouseCoopers LLP since their
appointment following an audit tender process held by the Company
in 2019.
Shareholders will have the opportunity to vote
on the re-appointment of PricewaterhouseCoopers LLP as auditor and
to authorise the committee to approve the auditor's remuneration,
as Ordinary Resolutions 8 and 9, at the AGM on 5 November
2024.
Provision of Non-Audit Services
The committee has put in place a policy on the
supply of non-audit services provided by the auditor. Such services
are considered on a case-by-case basis and may only be provided if
the service is at a reasonable and competitive cost and does not
constitute a conflict of interest or potential conflict of interest
or prevent the auditor from remaining objective and independent.
All non-audit services require the pre-approval of the committee.
No non-audit fees were paid to the auditor during the Year (2023 -
nil). The committee confirms that it has complied with Part 5.1 of
the Competitions and Market Authority's Order 2014.
Stephanie Eastment,
Chair of the Audit Committee
17 September 2024
Statement of Directors'
Responsibilities
The Directors are responsible for preparing the
Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law)
including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland'. Under company law the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
period.
In preparing these financial statements, the
Directors are required to:
· select
suitable accounting policies and then apply them
consistently;
· make
judgements and accounting estimates that are reasonable and
prudent;
· state whether
applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
· adopt a going
concern basis of accounting for the financial statements unless it
is inappropriate to assume that the Company will continue in
business.
The Directors are responsible for keeping
adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to
ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing a Directors' Report,
Directors' Remuneration Report, Strategic Report and Statement of
Corporate Governance that comply with that law and those
regulations.
The financial statements are published on
murray-income.co.uk which is a
website maintained by the Company's Manager. The work carried out
by the auditor does not involve consideration of the maintenance
and integrity of the website and, accordingly, the auditor accepts
no responsibility for any changes that have occurred to the
financial statements since being initially presented on the
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Each of the Directors confirms to the best of
his or her knowledge that:
· the financial
statements, prepared in accordance with the applicable accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company;
· the Annual
Report includes a fair review of the development and performance of
the business and
the position of the Company, together with a description of the
principal risks and uncertainties that the Company
faces;
· in the opinion
of the Board, the Annual Report and financial statements taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy;
and
· the financial
statements are prepared on an ongoing concern basis.
For and on behalf of the Board of
Murray Income Trust PLC
Peter Tait
Chair
17 September 2024
Statement of Comprehensive Income
|
|
|
Year ended 30 June 2024
|
Year ended 30 June 2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Gains on investments
|
10
|
-
|
58,747
|
58,747
|
-
|
32,602
|
32,602
|
|
Currency gains
|
|
-
|
-
|
-
|
-
|
733
|
733
|
|
Income
|
3
|
43,899
|
-
|
43,899
|
48,879
|
-
|
48,879
|
|
Investment management fees
|
4
|
(1,108)
|
(2,584)
|
(3,692)
|
(1,141)
|
(2,663)
|
(3,804)
|
|
Administrative expenses
|
5
|
(1,334)
|
-
|
(1,334)
|
(1,390)
|
-
|
(1,390)
|
|
Net return before finance costs and
tax
|
|
41,457
|
56,163
|
97,620
|
46,348
|
30,672
|
77,020
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
6
|
(770)
|
(1,797)
|
(2,567)
|
(735)
|
(1,714)
|
(2,449)
|
|
Net return before tax
|
|
40,687
|
54,366
|
95,053
|
45,613
|
28,958
|
74,571
|
|
|
|
|
|
|
|
|
|
|
Taxation
|
8
|
(274)
|
-
|
(274)
|
(1,085)
|
-
|
(1,085)
|
|
Net return after tax
|
|
40,413
|
54,366
|
94,779
|
44,528
|
28,958
|
73,486
|
|
|
|
|
|
|
|
|
|
|
Return per Ordinary share
|
9
|
37.4p
|
50.2p
|
87.6p
|
38.7p
|
25.2p
|
63.9p
|
|
|
|
|
|
|
|
|
|
|
The total column of this statement represents
the profit and loss account of the Company prepared in accordance
with FRS 102. The 'Revenue' and 'Capital' columns represent
supplementary information prepared under guidance issued by the
Association of Investment Companies.
|
|
All revenue and capital items in the above
statement derive from continuing operations.
|
|
No operations were acquired or discontinued in
the year.
|
|
The accompanying notes are an integral part of
the financial statements.
|
Statement of Financial Position
|
|
|
As at
|
As at
|
|
|
|
30 June 2024
|
30 June 2023
|
|
|
Notes
|
£'000
|
£'000
|
|
Non-current assets
|
|
|
|
|
Investments at fair value through profit or
loss
|
10
|
1,073,534
|
1,098,311
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Other debtors and receivables
|
11
|
12,512
|
7,274
|
|
Cash and cash equivalents
|
12
|
25,148
|
15,115
|
|
|
|
37,660
|
22,389
|
|
|
|
|
|
|
Creditors: amounts falling due within one
year
|
|
|
|
|
Other payables
|
|
(7,056)
|
(5,997)
|
|
Bank loans
|
|
(6,282)
|
(6,378)
|
|
|
13
|
(13,338)
|
(12,375)
|
|
Net current assets
|
|
24,322
|
10,014
|
|
Total assets less current
liabilities
|
|
1,097,856
|
1,108,325
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Creditors: amounts falling due after more than
one year
|
|
|
|
|
2.51% Senior Loan Notes
|
|
(39,955)
|
(39,941)
|
|
4.37% Senior Loan Notes
|
|
(67,619)
|
(69,200)
|
|
|
14
|
(107,574)
|
(109,141)
|
|
Net assets
|
|
990,282
|
999,184
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Share capital
|
15
|
29,882
|
29,882
|
|
Share premium account
|
|
438,213
|
438,213
|
|
Capital redemption reserve
|
|
4,997
|
4,997
|
|
Capital reserve
|
|
484,787
|
489,428
|
|
Revenue reserve
|
|
32,403
|
36,664
|
|
Total Shareholders' funds
|
|
990,282
|
999,184
|
|
|
|
|
|
|
Net asset value per Ordinary share
|
16
|
|
|
|
Debt at fair value
|
|
957.9p
|
911.7p
|
|
Debt at par value
|
|
946.0p
|
894.4p
|
|
|
|
|
|
|
The financial statements were approved by the
Board of Directors and authorised for issue on 17 September 2024
and were signed on its behalf by:
|
|
Peter Tait
|
|
|
|
|
Chairman
|
|
|
|
|
The accompanying notes are an integral part of
the financial statements.
|
Statement of Changes in Equity
For the year ended 30 June
2024
|
|
|
|
|
Share
|
Capital
|
|
|
|
|
|
|
Share
|
premium
|
redemption
|
Capital
|
Revenue
|
|
|
|
|
capital
|
account
|
reserve
|
reserve
|
reserve
|
Total
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Balance at 1 July 2023
|
|
29,882
|
438,213
|
4,997
|
489,428
|
36,664
|
999,184
|
|
Net return after tax
|
|
-
|
-
|
-
|
54,366
|
40,413
|
94,779
|
|
Buyback of Ordinary shares for
treasury
|
15
|
-
|
-
|
-
|
(59,007)
|
-
|
(59,007)
|
|
Dividends paid
|
7
|
-
|
-
|
-
|
-
|
(44,674)
|
(44,674)
|
|
Balance at 30 June 2024
|
|
29,882
|
438,213
|
4,997
|
484,787
|
32,403
|
990,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended 30 June 2023
|
|
|
|
|
Share
|
Capital
|
|
|
|
|
|
|
Share
|
premium
|
redemption
|
Capital
|
Revenue
|
|
|
|
|
capital
|
account
|
reserve
|
reserve
|
reserve
|
Total
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Balance at 1 July 2022
|
|
29,882
|
438,213
|
4,997
|
502,672
|
33,491
|
1,009,255
|
|
Net return after tax
|
|
-
|
-
|
-
|
28,958
|
44,528
|
73,486
|
|
Buyback of Ordinary shares for
treasury
|
15
|
-
|
-
|
-
|
(42,202)
|
-
|
(42,202)
|
|
Dividends paid
|
7
|
-
|
-
|
-
|
-
|
(41,355)
|
(41,355)
|
|
Balance at 30 June 2023
|
|
29,882
|
438,213
|
4,997
|
489,428
|
36,664
|
999,184
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
the financial statements.
|
Statement of Cash Flows
|
|
|
Year ended
|
Year ended
|
|
|
|
30 June 2024
|
30 June 2023
|
|
|
Notes
|
£'000
|
£'000
|
|
Operating activities
|
|
|
|
|
Net return before finance costs and
taxation
|
|
97,620
|
77,020
|
|
(Decrease)/increase in accrued
expenses
|
|
(703)
|
783
|
|
Overseas withholding tax
|
|
(1,332)
|
(1,458)
|
|
Increase in dividend income
receivable
|
|
(422)
|
(324)
|
|
Decrease/(increase) in interest income
receivable
|
|
32
|
(54)
|
|
Interest paid
|
|
(2,858)
|
(2,196)
|
|
Gains on investments
|
10
|
(58,747)
|
(32,602)
|
|
Amortisation of loan note expenses
|
6
|
14
|
12
|
|
Accretion of loan note book cost
|
6
|
(1,581)
|
(1,581)
|
|
Foreign exchange gains
|
|
-
|
(733)
|
|
(Increase)/decrease in other debtors
|
|
(2)
|
47
|
|
Stock dividends included in investment
income
|
3
|
-
|
(1,006)
|
|
Net cash inflow from operating
activities
|
|
32,021
|
37,908
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Purchases of investments
|
|
(177,080)
|
(180,130)
|
|
Sales of investments
|
|
259,782
|
218,912
|
|
Net cash inflow from investing
activities
|
|
82,702
|
38,782
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Dividends paid
|
7
|
(44,674)
|
(41,355)
|
|
Buyback of Ordinary shares for
treasury
|
|
(59,920)
|
(40,955)
|
|
Repayment of bank loans
|
|
(6,327)
|
(6,755)
|
|
Draw down of bank loans
|
|
6,270
|
6,664
|
|
Net cash outflow from financing
activities
|
|
(104,651)
|
(82,401)
|
|
Increase/(decrease) in cash
|
|
10,072
|
(5,711)
|
|
|
|
|
|
|
Analysis of changes in cash during the
year
|
|
|
|
|
Opening balance
|
|
15,115
|
20,131
|
|
Effect of exchange rate fluctuations on cash
held
|
17
|
(39)
|
695
|
|
Increase/(decrease) in cash as above
|
17
|
10,072
|
(5,711)
|
|
Closing balance
|
|
25,148
|
15,115
|
|
|
|
|
|
|
Represented by:
|
|
|
|
|
Cash at bank and in hand
|
12
|
1,045
|
1,227
|
|
Money market funds
|
12
|
24,103
|
13,888
|
|
|
|
25,148
|
15,115
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these financial statements.
|
|
|
|
Notes to the Financial Statements
For the year ended 30 June 2024
1.
|
Principal activity
|
|
|
The Company is a closed-end investment company,
registered in Scotland No SC012725, with its Ordinary shares being
listed on the London Stock Exchange.
|
2.
|
Accounting policies
|
|
|
(a)
|
Basis of preparation.
The financial statements have been prepared in accordance with
Financial Reporting Standard 102, the Companies Act 2006 and with
the Statement of Recommended Practice 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued in
July 2022. The financial statements are prepared in Sterling which
is the functional currency of the Company and rounded to the
nearest £'000. They have also been prepared on the assumption that
approval as an investment trust will continue to be granted. The
accounting policies applied are unchanged from the prior year and
have been applied consistently.
|
|
|
|
The Directors have undertaken a rigorous review
and consider both that there are no material uncertainties and that
the adoption of the going concern basis of accounting is
appropriate. This conclusion is consistent with the longer
term Viability Statement.
|
|
|
|
The Company's assets consist primarily of a
diverse portfolio of listed equity shares nearly all of which, in
most circumstances, are realisable within a very short timescale.
The Board has set limits for borrowing and regularly reviews the
level of any gearing, cash flow projections and compliance with
banking and loan note covenants. The Directors are mindful of the
principal risks and uncertainties disclosed in the Overview of
Strategy, and have reviewed forecasts detailing revenue and
liabilities. The Directors are satisfied that the Company has
adequate resources to continue in operational existence for the
foreseeable future being at least 12 months from the date of
approval of this Annual Report.
|
|
|
(b)
|
Income. Dividends
receivable on equity shares are treated as revenue for the year on
an ex-dividend basis. Where no ex-dividend date is available
dividends receivable on or before the year end are treated as
revenue for the year. Where the Company has elected to receive
dividends in the form of additional shares rather than cash, the
amount of the cash dividend foregone is recognised as revenue and
any residual amount is recognised as capital. Provision is made for
any dividends not expected to be received. Special dividends are
credited to capital or revenue, according to the circumstances.
Dividend revenue is presented gross of any non-recoverable
withholding taxes, which are disclosed separately within the
Statement of Comprehensive Income.
|
|
|
|
Interest receivable from cash and short-term
deposits and stock lending income is recognised on an accruals
basis.
|
|
|
(c)
|
Expenses. All expenses
are accounted for on an accruals basis. All expenses are charged
through the revenue column of the Statement of Comprehensive Income
except as follows:
|
|
|
|
- transaction costs on the acquisition or
disposal of investments are recognised as a capital item in the
Statement of Comprehensive Income.
|
|
|
|
- expenses are charged as a capital item in the
Statement of Comprehensive Income where a connection with the
maintenance or enhancement of the value of the investments can be
demonstrated. In this respect the investment management fee has
been allocated 30% to revenue and 70% to capital to reflect the
Company's investment policy and prospective income and capital
growth.
|
|
|
(d)
|
Taxation. Taxation
represents the sum of tax currently payable and deferred tax. Any
tax payable is based on the taxable profit for the year. Taxable
profit differs from net profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that were
applicable at the Statement of Financial Position date.
|
|
|
|
Deferred taxation is recognised in respect of
all timing differences that have originated but not reversed at the
Statement of Financial Position date, where transactions or events
that result in an obligation to pay more tax in the future or right
to pay less tax in the future have occurred at the Statement of
Financial Position date. This is subject to deferred tax assets
only being recognised if it is considered more likely than not that
there will be suitable profits from which the future reversal of
the underlying timing differences can be deducted. Timing
differences are differences arising between the Company's taxable
profits and its results as stated in the financial statements which
are capable of reversal in one or more subsequent periods. Deferred
tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences are
expected to reverse, based on tax rates and laws enacted or
substantively enacted at the Statement of Financial Position
date.
|
|
|
|
Due to the Company's status as an investment
trust company and the intention to continue meeting the conditions
required to obtain approval in the foreseeable future, the Company
has not provided deferred tax on any capital gains and losses
arising on the revaluation or disposal of
investments.
|
|
|
|
The tax effect of different items of
income/gain and expenditure/loss is allocated between capital and
revenue within the Statement of Comprehensive Income on the same
basis as the particular item to which it relates using the
Company's effective rate of tax for the year, based on the marginal
basis.
|
|
|
(e)
|
Valuation of
investments. The Company has chosen to apply the
recognition and measurement provisions of IAS 39 Financial
Instruments: Recognition and Measurement. All investments have been
designated upon initial recognition at fair value through profit or
loss. This is done because all investments are considered to form
part of a group of financial assets which is evaluated on a fair
value basis, in accordance with the Company's documented investment
strategy, and information about the grouping is provided internally
on that basis. Investments are recognised and de-recognised at
trade date where a purchase or sale is under a contract whose terms
require delivery within the timeframe established by the market
concerned, and are measured initially at fair value. Subsequent to
initial recognition, investments are valued at fair value through
profit or loss. For listed investments, this is deemed to be bid
market prices or closing prices for stocks traded on recognised
stock exchanges. Gains and losses arising from changes in fair
value are included in the net return for the period as a capital
item in the Statement of Comprehensive Income and are ultimately
recognised in the capital reserve.
|
|
|
(f)
|
Cash and cash equivalents.
Cash comprises cash in hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject
to insignificant risk of change in value.
|
|
|
(g)
|
Borrowings and finance
costs. Borrowings of interest bearing bank loans and
2.51% Senior Loan Notes are recognised initially at the fair value
of the consideration received, net of any issue expenses, and
subsequently at amortised cost using the effective interest method.
Borrowings of 4.37% Senior Loan Notes, which were novated to the
Company on the merger with Perpetual Income and Growth Investment
Trust plc, were recorded initially at their fair value of
£73,344,000 and are amortised over the remaining life of the loan
towards their redemption value of £60,000,000. The amortisation
adjustment is presented as a finance cost. Finance costs accrue
using the effective interest rate over the life of the borrowings
and are allocated 30% to revenue and 70% to capital.
|
|
|
(h)
|
Traded options. The
Company may enter into certain derivative contracts (eg options) to
gain exposure to the market. The option contracts are classified as
fair value through profit or loss, held for trading, and accounted
for as separate derivative contracts and are therefore shown in
other assets or other liabilities at their fair value ie market
value. The premium on the option (as with written options
generally) is treated as the option's initial fair value and is
recognised over the life of the option in the revenue column of the
Statement of Comprehensive Income along with fair value changes in
the open position which occur due to the movement in underlying
securities. Losses realised on the exercise of the contracts are
recorded in the capital column of the Statement of Comprehensive
Income as they arise. Where the Company enters into derivative
contracts to manage market risk, gains or losses arising on such
contracts are recorded in the capital column of the Statement of
Comprehensive Income.
|
|
|
(i)
|
Segmental reporting.
The Directors are of the opinion that the Company is engaged
in a single segment of business activity, being investment
business. Consequently, no business segmental analysis is
provided.
|
|
|
(j)
|
Nature and purpose of reserves
|
|
|
|
Share capital. The
Ordinary share capital on the Statement of Financial Position
relates to the number of shares in issue and in treasury. Only when
the shares are cancelled, either from treasury or directly, is a
transfer made to the capital redemption reserve. This is a
non-distributable reserve.
|
|
|
|
Share premium account.
The balance classified as share premium includes the premium
above nominal value from the proceeds on issue of any equity share
capital comprising Ordinary shares of 25p and includes the premium
arising following the issue of shares on the combination with
Perpetual Income and Growth Investment Trust plc on 17 November
2020. This is a non-distributable reserve.
|
|
|
|
Capital redemption reserve.
The capital redemption reserve reflects the cancellation of
Ordinary shares, when an amount equal to the par value of the
Ordinary share capital is transferred from the share capital
reserve to the capital redemption reserve. This is a
non-distributable reserve.
|
|
|
|
Capital reserve. This
reserve reflects any gains or losses on investments realised in the
period along with any movements in the fair value of investments
held that have been recognised in the Statement of Comprehensive
Income. These include gains and losses from foreign currency
exchange differences. Additionally, expenses, including finance
costs, are charged to this reserve in accordance with (b) and (f)
above. When making a distribution to shareholders, the Directors
determine profits available for distribution by reference to
'Guidance on realised and distributable profits under the Companies
Act 2006' issued by the Institute of Chartered Accountants in
England and Wales and the Institute of Chartered Accountants
of Scotland in April 2017. The availability of distributable
reserves in the Company is dependent on those distributions meeting
the definition of qualifying consideration within the guidance and
on available cash resources of the Company and other accessible
sources of funds. The distributable reserves are therefore subject
to any future restrictions or limitations at the time such
distribution is made.
|
|
|
|
The capital reserve, to the extent it
constitutes realised profits, is distributable. This may include
unrealised (losses)/gains on investments where these are readily
convertible to cash. The amount of the capital reserve that is
distributable is complex to determine and is not necessarily the
full amount of the reserve as disclosed within these financial
statements of £484,787,000 as at 30 June 2024 as this is subject to
fair value movements and may not be readily realisable at short
notice.
|
|
|
|
Revenue reserve. This
reserve reflects all income and costs which are recognised in the
revenue column of the Statement of Comprehensive Income. The
revenue reserve is distributable by way of dividend.
|
|
|
(k)
|
Treasury shares. When
the Company buys back the Company's equity share capital as
treasury shares, the amount of the consideration paid, including
directly attributable costs and any tax effects, is recognised as a
deduction from equity. When these shares are sold or reissued
subsequently, the net amount received is recognised as an increase
in equity, and the resulting surplus or deficit on the transaction
is transferred to or from the capital reserve.
|
|
|
(l)
|
Dividends payable.
Final dividends are recognised from the date on which they
are approved by Shareholders. Interim dividends are recognised when
paid. Dividends are shown in the Statement of Changes in
Equity.
|
|
|
(m)
|
Foreign currency.
Transactions in foreign currencies are converted to Sterling
at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities and non-monetary assets held at
fair value denominated in foreign currencies are translated into
Sterling at rates of exchange ruling at the Statement of Financial
Position date. Exchange gains and losses are taken to the Statement
of Comprehensive Income as a capital or revenue item depending on
the nature of the underlying item.
|
|
|
(n)
|
Significant estimates and
judgements. The Directors do not believe that any
accounting estimates or judgements have been applied to these
financial statements that have a significant risk of causing
material adjustment to the carrying amount of assets and
liabilities.
|
3.
|
Income
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Income from investments
|
|
|
|
|
UK dividends (all listed):
|
|
|
|
|
- ordinary
|
27,115
|
32,132
|
|
|
- special
|
-
|
353
|
|
|
Property income dividends
|
681
|
814
|
|
|
Overseas dividends (all listed)
|
|
|
|
|
- ordinary
|
12,277
|
10,343
|
|
|
- special
|
-
|
756
|
|
|
Stock dividends
|
-
|
1,006
|
|
|
|
40,073
|
45,404
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
Deposit interest
|
64
|
34
|
|
|
Money Market interest
|
926
|
682
|
|
|
Traded option premiums
|
2,836
|
2,759
|
|
|
|
3,826
|
3,475
|
|
|
Total income
|
43,899
|
48,879
|
|
|
|
|
|
|
|
There were no special dividends in the year
(2023 - £1,109,000) which were recognised as being revenue in
nature.
|
|
|
During the year, the Company received premiums
totalling £2,836,000 (2023 - £2,759,000) in exchange for entering
into derivative transactions. At the year end there were no open
positions (2023 - none).
|
4.
|
Investment management fees
|
|
|
|
2024
|
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Management fee
|
1,108
|
2,584
|
3,692
|
1,141
|
2,663
|
3,804
|
|
|
|
|
|
|
|
|
|
|
|
The management fee is based on 0.55% per annum
for net assets up to £350 million, 0.45% per annum on the next £100
million of net assets and 0.25% per annum for net assets over £450
million, calculated and payable monthly. The fee has been allocated
30% to revenue and 70% to capital. The management agreement is
terminable on three months' notice. The fee payable to the Manager
at the year end was £622,000 (2023 - £1,273,000).
|
|
|
Under the terms of the management agreement,
the value of the Company's investments in other funds managed by
abrdn is excluded from the calculation of the management fee. The
Company held no such other funds managed by abrdn at the year end
(2023 - none).
|
|
|
Subsequent to the year end, the Company and the
Manager agreed to a change in the management fee arrangements. With
effect from 1 July 2024, the management fee is to based on 0.35%
per annum for net assets up to £1.1 billion and 0.25% per annum for
net assets over £1.1 billion, calculated and payable
monthly.
|
5.
|
Administrative expenses
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Shareholders' servicesA
|
406
|
418
|
|
|
Directors' remunerationB
|
174
|
188
|
|
|
Secretarial feesC
|
75
|
75
|
|
|
Registrars fees
|
68
|
76
|
|
|
Depositary fees
|
78
|
90
|
|
|
Custody fees
|
72
|
68
|
|
|
Printing and postage
|
41
|
61
|
|
|
Auditors' remuneration:
|
|
|
|
|
- fees payable to the Company's auditors for
the audit of the Company's annual financial statements
|
54
|
42
|
|
|
Legal and professional fees
|
50
|
38
|
|
|
Irrecoverable VAT
|
137
|
164
|
|
|
Other expenses
|
179
|
170
|
|
|
|
1,334
|
1,390
|
|
|
A Includes savings scheme and other
wrapper administration and promotion expenses, paid to the Manager
under a delegation agreement with the Manager to cover promotional
activities during the year. There was £98,000 (2023 - £106,000) due
to the Manager in respect of these promotional activities at the
year end.
|
|
|
B Refer to the Directors'
Remuneration section of the Directors' Remuneration Report.
|
|
|
C Payable to the Manager, balance
outstanding of £38,000 (2023 - £19,000) at the year end.
|
6.
|
Finance costs
|
|
|
|
2024
|
2023
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Bank loans and overdraft interest
|
152
|
356
|
508
|
118
|
274
|
392
|
|
|
2.51% Senior Loan Note
|
301
|
703
|
1,004
|
301
|
703
|
1,004
|
|
|
4.37% Senior Loan Note
|
787
|
1,835
|
2,622
|
787
|
1,835
|
2,622
|
|
|
Amortisation of 2.51% Senior Loan Note issue
expenses
|
4
|
10
|
14
|
3
|
9
|
12
|
|
|
Amortisation of 4.37% Senior Loan
Note
|
(474)
|
(1,107)
|
(1,581)
|
(474)
|
(1,107)
|
(1,581)
|
|
|
|
770
|
1,797
|
2,567
|
735
|
1,714
|
2,449
|
|
|
|
|
|
|
|
|
|
|
|
Details of the Loan Notes and their
amortisation are set out in note 14. Finance costs are allocated
30% to revenue and 70% to capital.
|
|
|
|
|
|
|
|
|
|
| |
7.
|
Ordinary dividends on equity shares
|
|
|
|
2024
|
2023
|
|
|
|
Rate
|
£'000
|
Rate
|
£'000
|
|
|
Fourth interim dividend previous
year
|
12.75p
|
14,100
|
11.25p
|
13,128
|
|
|
First interim dividend current year
|
9.50p
|
10,334
|
8.25p
|
9,556
|
|
|
Second interim dividend current year
|
9.50p
|
10,208
|
8.25p
|
9,431
|
|
|
Third interim dividend current year
|
9.50p
|
10,032
|
8.25p
|
9,337
|
|
|
Return of unclaimed dividends
|
|
-
|
|
(97)
|
|
|
|
|
44,674
|
|
41,355
|
|
|
|
|
|
|
|
|
|
The fourth interim dividend for 2024 of 10.00p
per Ordinary share has not been included as a liability in these
financial statements as it was not paid until after the reporting
date (12 September 2024).
|
|
|
The following table sets out the total
dividends paid and proposed in respect of the financial year, which
is the basis on which the requirements of Section 1158-1159 of the
Corporation Tax Act 2010 are considered. The revenue available for
distribution by way of dividend for the year is £40,413,000 (2023 -
£44,528,000).
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
Rate
|
£'000
|
Rate
|
£'000
|
|
|
Three interim dividends of 9.50p each (2023:
three interim dividends of 8.25p each)
|
28.50p
|
30,574
|
24.75p
|
28,324
|
|
|
Fourth interim dividend
|
10.00p
|
10,428
|
12.75p
|
14,088
|
|
|
|
38.50p
|
41,002
|
37.50p
|
42,412
|
8.
|
Taxation
|
|
|
|
|
2024
|
2023
|
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
(a)
|
Analysis of charge for the year
|
|
|
|
|
|
|
|
|
|
Overseas tax incurred
|
1,104
|
-
|
1,104
|
2,244
|
-
|
2,244
|
|
|
|
Overseas tax reclaimable
|
(830)
|
-
|
(830)
|
(1,159)
|
-
|
(1,159)
|
|
|
|
Total tax charge for the year
|
274
|
-
|
274
|
1,085
|
-
|
1,085
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Factors affecting the tax charge for the year.
The UK corporation tax rate is 25% (2023 - 25%). The tax charge for
the year is lower than the corporation tax rate (2023 - lower). The
differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
Net return before taxation
|
40,687
|
54,366
|
95,053
|
45,613
|
28,958
|
74,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net return multiplied by the effective rate of
corporation tax of 25% (2023 - 20.5%)
|
10,172
|
13,592
|
23,764
|
9,351
|
5,936
|
15,287
|
|
|
|
Effects of:
|
|
|
|
|
|
|
|
|
|
Non-taxable UK dividends
|
(6,853)
|
|
(6,853)
|
(6,057)
|
|
(6,057)
|
|
|
|
Non-taxable overseas dividends
|
(3,069)
|
|
(3,069)
|
(3,008)
|
|
(3,008)
|
|
|
|
Expenses not deductible for tax
purposes
|
11
|
|
11
|
2
|
|
2
|
|
|
|
Movement in unutilised management
expenses
|
(261)
|
1,095
|
834
|
(288)
|
897
|
609
|
|
|
|
Realised and unrealised gains on investments
held
|
-
|
(14,687)
|
(14,687)
|
-
|
(6,683)
|
(6,683)
|
|
|
|
Currency movements not taxable
|
-
|
-
|
-
|
-
|
(150)
|
(150)
|
|
|
|
Overseas tax payable
|
274
|
-
|
274
|
1,085
|
-
|
1,085
|
|
|
|
Total tax charge
|
274
|
-
|
274
|
1,085
|
-
|
1,085
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Factors that may affect future tax charges. No
provision for deferred tax has been made in the current or prior
accounting period.
|
|
|
|
The Company has not provided for deferred tax
on capital gains or losses arising on the revaluation or disposal
of investments as it is exempt from tax on these items because of
its status as an investment trust company.
|
|
|
|
At the year end, the Company has, for taxation
purposes only, accumulated unrelieved management expenses and loan
relationship deficits of £77,761,000 (2023 - £74,422,000). A
deferred tax asset at the standard rate of corporation of 25% (2023
- 25%) of £19,440,000 (2023 - £18,606,000) has not been recognised
and these expenses will only be utilised if the Company has profits
chargeable to corporation tax in the future. It is considered too
uncertain that the Company will generate such profits and therefore
no deferred tax asset has been recognised.
|
9.
|
Return per Ordinary share
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
p
|
£'000
|
p
|
|
|
Returns are based on the following
figures:
|
|
|
|
|
|
|
Revenue return
|
40,413
|
37.4
|
44,528
|
38.7
|
|
|
Capital return
|
54,366
|
50.2
|
28,958
|
25.2
|
|
|
Total return
|
94,779
|
87.6
|
73,486
|
63.9
|
|
|
|
|
|
|
|
|
|
Weighted average number of Ordinary shares in
issue
|
|
108,144,845
|
|
114,958,339
|
10.
|
Investments at fair value through profit or
loss
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Opening book cost
|
989,936
|
1,017,087
|
|
|
Opening investment holdings gains
|
108,375
|
81,706
|
|
|
Opening fair value
|
1,098,311
|
1,098,793
|
|
|
Analysis of transactions made during the
year
|
|
|
|
|
Purchases at cost
|
180,045
|
183,338
|
|
|
Sales proceeds received
|
(263,569)
|
(216,422)
|
|
|
Gains on investments
|
58,747
|
32,602
|
|
|
Closing fair value
|
1,073,534
|
1,098,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Closing book cost
|
922,927
|
989,936
|
|
|
Closing investment gains
|
150,607
|
108,375
|
|
|
Closing fair value
|
1,073,534
|
1,098,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
Gains on investments
|
£'000
|
£'000
|
|
|
Realised gains on sale of investments at fair
value
|
16,515
|
5,988
|
|
|
Realised loss on exercise of put
options
|
-
|
(55)
|
|
|
Net movement in investment holdings
gains
|
42,232
|
26,669
|
|
|
|
58,747
|
32,602
|
|
|
The Company received £263,569,000 (2023 -
£216,422,000) from investments sold in the year. The book cost of
these investments when they were purchased was £247,054,000 (2023 -
£210,434,000). These investments have been revalued over time and
until they were sold any unrealised gains/(losses) were included in
the fair value of the investments.
|
|
|
The Company may write and purchase both
exchange traded and over the counter derivative contracts as part
of its investment policy. The Company pledges collateral greater
than the market value of the traded options in accordance with
standard commercial practice. At 30 June 2024 there were no shares
pledged as part of the option underwriting programme (30 June 2023
- none). The liability of collateral held at the year end was £nil
as no open positions existed (30 June 2023 - £nil).
|
|
|
Transaction costs.
During the year expenses were incurred in acquiring or disposing of
investments classified at fair value through profit or loss. These
have been expensed through capital and are included within gains on
investments in the Statement of Comprehensive Income. The total
costs were as follows:
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Purchases
|
842
|
797
|
|
|
Sales
|
114
|
144
|
|
|
|
956
|
941
|
|
|
|
|
|
|
|
The above transaction costs are calculated in
line with the AIC SORP. The transaction costs in the Company's Key
Information Document are calculated on a different basis and in
line with the PRIIPs regulations.
|
11.
|
Other debtors and receivables
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Amounts due from brokers
|
3,787
|
-
|
|
|
Accrued income
|
3,471
|
3,080
|
|
|
Taxation recoverable
|
5,228
|
4,170
|
|
|
Prepayments
|
26
|
24
|
|
|
|
12,512
|
7,274
|
12.
|
Cash and cash equivalents
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
Cash at bank and in hand
|
1,045
|
1,227
|
|
|
Money market funds
|
24,103
|
13,888
|
|
|
|
25,148
|
15,115
|
|
|
|
|
|
|
|
The Company holds £24,103,000 (2023 -
£13,888,000) in Aberdeen Standard Liquidity Fund (Lux) - Sterling
Fund which is managed and administered by abrdn.
|
13.
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
£'000
|
£'000
|
|
|
Other creditors
|
|
|
1,563
|
2,548
|
|
|
Amounts due to brokers for purchase of
investments
|
5,167
|
2,202
|
|
|
Amounts due to brokers for Ordinary shares
bought back
|
326
|
1,247
|
|
|
|
|
|
7,056
|
5,997
|
|
|
Bank loans
|
|
|
6,282
|
6,378
|
|
|
|
|
|
13,338
|
12,375
|
|
|
|
|
|
|
|
|
|
The Company has a three year £50 million
multi-currency unsecured revolving bank credit facility with Bank
of Nova Scotia Limited, committed until 27 October 2024. Under the
terms of the agreement, advances from the facility may be made for
periods of up to six months or for such longer periods agreed by
the lender.
|
|
|
As at 30 June 2024, the Company had drawn down
the following amounts from the facility, all with a maturity date
of 29 July 2024 (2023 - 26 July 2023):
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
Currency
|
£'000
|
Currency
|
£'000
|
|
|
Swiss Franc at an all-in rate of 2.55% (2023:
2.798%)
|
363,000
|
319
|
1,200,000
|
1,055
|
|
|
Euro at an all-in rate of 4.79% (2023:
4.563%)
|
4,050,000
|
3,434
|
3,300,000
|
2,832
|
|
|
Norwegian Krone at an all-in rate of 5.78%
(2023: 5.11%)
|
4,275,000
|
318
|
6,360,000
|
467
|
|
|
Danish Krona at an all-in rate of 4.75% (2023:
4.56%)
|
2,750,000
|
313
|
6,850,000
|
789
|
|
|
US Dollar at an all-in rate of 6.57% (2023:
6.314%)
|
2,400,000
|
1,898
|
1,570,000
|
1,235
|
|
|
|
|
6,282
|
|
6,378
|
|
|
|
|
|
|
|
|
|
At the date this Report was approved, the
Company had drawn down the following amounts from the facility, all
with a maturity date of 30 September 2024:
|
|
|
- Swiss Franc 363,000 at an all-in rate of
2.55716%, equivalent to £328,000.
|
|
|
- Euro 4,050,000 at an all-in rate of 4.734%,
equivalent to £3,418,000.
|
|
|
- Norwegian Krone 4,275,000 at an all-in rate
of 5.79%, equivalent to £302,000.
|
|
|
- Danish Krona 2,750,000 at an all-in rate of
4.6367%, equivalent to £311,000.
|
|
|
- US Dollar 2,400,000 at an all-in rate of
6.5745%, equivalent to £1,838,000.
|
|
|
Financial covenants contained within the
facility agreement provide, inter alia, that the ratio of net
assets to borrowings must be greater than 3.5:1 and that net assets
must exceed £550 million. All financial covenants were met during
the year and also during the period from the year end to the date
of this report.
|
|
|
|
|
|
|
|
|
|
| |
14.
|
Creditors: amounts falling due after more than one
year
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
2.51% Senior Loan Note
|
40,000
|
40,000
|
|
|
Unamortised 2.51% Senior Loan Note issue
expenses
|
(45)
|
(59)
|
|
|
|
39,955
|
39,941
|
|
|
4.37% Senior Loan Note at fair value
|
73,344
|
73,344
|
|
|
Amortisation of 4.37% Senior Loan
Note
|
(5,725)
|
(4,144)
|
|
|
|
67,619
|
69,200
|
|
|
|
107,574
|
109,141
|
|
|
|
|
|
|
|
On 8 November 2017 the Company issued
£40,000,000 of 10 year Senior Loan Notes at a fixed rate of 2.51%.
Interest is payable in half yearly instalments in May and November
and the Loan Notes are due to be redeemed at par on 8 November
2027.
|
|
|
As a result of the transaction with Perpetual
Income and Growth Investment Trust plc on 17 November 2020,
£60,000,000 of 15 year Senior Loan Notes at a fixed rate of 4.37%
issued on 8 May 2014 were novated to the Company. Under FRS 102 the
loan notes are required to be recorded initially at their fair
value of £73,344,000 in the Company's Financial Statements and are
then amortised over the remaining life of the loan towards their
redemption value of £60,000,000. The amortisation adjustment is
presented as a finance cost, split 70% to capital and 30% to
revenue. Interest is payable in half yearly instalments in May and
November and the Loan Notes are due to be redeemed at par on 8 May
2029.
|
|
|
Both the Loan Notes are secured by a floating
charge over the whole of the assets of the Company and rank pari
passu. The Company has complied with the Senior Loan Note Purchase
Agreements covenants throughout the year that the ratio of net
assets to gross borrowings must be greater than 3.5:1, and that net
assets will not be less than £550,000,000 throughout the
year.
|
15.
|
Share capital
|
|
|
|
2024
|
|
2023
|
|
|
|
|
Shares
|
£'000
|
Shares
|
£'000
|
|
|
Allotted, called-up and fully-paid:
|
|
|
|
|
|
|
Ordinary shares of 25p each: publicly
held
|
104,685,001
|
26,171
|
111,720,001
|
27,930
|
|
|
Ordinary shares of 25p each: held in
treasury
|
14,844,531
|
3,711
|
7,809,531
|
1,952
|
|
|
|
119,529,532
|
29,882
|
119,529,532
|
29,882
|
|
|
|
|
|
|
|
|
|
During the year 7,035,000 Ordinary shares were
bought back (2023 - 4,970,471) to be held in treasury by the
Company at a total cost of £59,007,000 (2023- £42,202,000)
representing 6.3% (2023 - 4.3%) of called-up share capital
excluding Ordinary shares held in treasury at the start of the
year.
|
16.
|
Net asset value per Ordinary share
|
|
|
|
|
|
|
The net asset value per Ordinary share and the
net asset value attributable to the Ordinary shares at the year end
follow. These were calculated using 104,685,001 (2023 -
111,720,001) Ordinary shares in issue at the year end (excluding
treasury shares).
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
Net Asset Value Attributable
|
Net Asset Value Attributable
|
|
|
|
£'000
|
pence
|
£'000
|
pence
|
|
|
Net asset value - debt at par
|
990,282
|
946.0
|
999,184
|
894.4
|
|
|
Add: amortised cost of 2.51% Senior Loan
Notes
|
39,955
|
38.2
|
39,941
|
35.8
|
|
|
Less: fair value of 2.51% Senior Loan
Notes
|
(36,530)
|
(34.9)
|
(34,928)
|
(31.3)
|
|
|
Add: amortised cost of 4.37% Senior Loan
Notes
|
67,619
|
64.5
|
69,200
|
61.9
|
|
|
Less: fair value of 4.37% Senior Loan
Notes
|
(58,535)
|
(55.9)
|
(54,900)
|
(49.1)
|
|
|
Net asset value - debt at fair value
|
1,002,791
|
957.9
|
1,018,497
|
911.7
|
17.
|
Analysis of changes in net debt
|
|
|
|
At
|
Currency
|
|
Non-cash
|
At
|
|
|
|
1 July 2023
|
differences
|
Cash flows
|
movements
|
30 June 2024
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Cash and cash equivalents*
|
15,115
|
(39)
|
10,072
|
-
|
25,148
|
|
|
Debt due within one year
|
(6,378)
|
39
|
57
|
-
|
(6,282)
|
|
|
Debt due after more than one year
|
(109,141)
|
-
|
-
|
1,567
|
(107,574)
|
|
|
|
(100,404)
|
-
|
10,129
|
1,567
|
(88,708)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
Currency
|
|
Non-cash
|
At
|
|
|
|
1 July 2022
|
differences
|
Cash flows
|
movements
|
30 June 2023
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Cash and cash equivalents*
|
20,131
|
695
|
(5,711)
|
-
|
15,115
|
|
|
Debt due within one year
|
(6,507)
|
38
|
91
|
-
|
(6,378)
|
|
|
Debt due after more than one year
|
(110,710)
|
-
|
-
|
1,569
|
(109,141)
|
|
|
|
(97,086)
|
733
|
(5,620)
|
1,569
|
(100,404)
|
|
|
* An analysis of cash and cash equivalents
between cash at bank and in hand and money market funds is provided
in note 12.
|
|
|
A statement reconciling the movement in net
funds to the net cash flow has not been presented as there are no
differences from the above analysis.
|
18.
|
Financial instruments
|
|
|
This note summarises the risks deriving from
the financial instruments that comprise the Company's assets and
liabilities.
|
|
|
The Company's investment activities expose it
to various types of financial risk associated with the financial
instruments and markets in which it invests. The Company's
financial instruments, other than derivatives, comprise securities
and other investments, cash balances, liquid resources, loans and
debtors and creditors that arise directly from its operations; for
example, in respect of sales and purchases awaiting settlement, and
debtors for accrued income. The Company also has the ability to
enter into derivative transactions in the form of forward foreign
currency contracts, futures and options, subject to Board approval,
for the purpose of enhancing portfolio returns and for hedging
purposes in a manner consistent with the Company's broader
investment policy. As at 30 June 2024 there were no open positions
in derivatives transactions (2023 - same).
|
|
|
Risk management
framework. The directors of abrdn Fund Managers
Limited collectively assume responsibility for the Manager's
obligations under the AIFMD including reviewing investment
performance and monitoring the Company's risk profile during the
year.
|
|
|
The Manager is a wholly owned subsidiary of the
abrdn Group ("the Group"), which provides a variety of services and
support to the Manager in the conduct of its business activities,
including in the oversight of the risk management framework for the
Company. The Manager has delegated the day to day administration of
the investment policy to abrdn Limited, which is responsible for
ensuring that the Company is managed within the terms of its
investment guidelines and the limits set out in its pre-investment
disclosures to investors (details of which can be found on the
Company's website). The Manager has retained responsibility for
monitoring and oversight of investment performance, product risk
and regulatory and operational risk for the Company.
|
|
|
The Manager conducts its risk oversight
function through the operation of the Group's risk management
processes and systems which are embedded within the Group's
operations. The Group's Risk Division ("the Division") supports
management in the identification and mitigation of risks and
provides independent monitoring of the business. The Division
includes Compliance, Business Risk, Market Risk, Risk Management
and Legal. The team is headed up by the Group's Chief Risk Officer,
who reports to the Chief Executive Officer ("CEO") of the Group.
The Risk Division achieves its objective through embedding the Risk
Management Framework throughout the organisation using the Group's
operational risk management system ("SHIELD").
|
|
|
The Group's Internal Audit Department is
independent of the Risk Division and reports directly to the Group
CEO and to the Audit Committee of the Group's Board of Directors.
The Internal Audit Department is responsible for providing an
independent assessment of the Group's control
environment.
|
|
|
The Group's corporate governance structure is
supported by several committees to assist the board of directors,
its subsidiaries and the Company to fulfil their roles and
responsibilities. The Group's Risk Division is represented on all
committees, with the exception of those committees that deal with
investment recommendations. The specific goals and guidelines on
the functioning of those committees are described in the
committees' terms of reference.
|
|
|
Risk management of the financial
instruments. The main risks the Company faces from
these financial instruments are (a) market risk (comprising (i)
interest rate, (ii) foreign currency and (iii) other price risk),
(b) liquidity risk and (c) credit risk.
|
|
|
In order to mitigate risk, the investment
strategy is to select investments for their fundamental value.
Stock selection is therefore based on disciplined accounting,
market and sector analysis. It is the Board's policy to hold an
appropriate spread of investments in the portfolio in order to
reduce the risk arising from factors specific to a particular
sector. The Attribution Analysis, detailing the allocation of
assets and the stock selection, is shown in the Performance
Attribution table in the Investment Manager's Report. The
Investment Manager actively monitors market prices throughout the
year and reports to the Board, which meets regularly in order to
consider investment strategy. The Company's strategy is detailed in
the Chair's Statement, in the Investment Manager's Report, and in
Overview of Strategy.
|
|
|
The Board has agreed the parameters for net
gearing, which was 9.1% of net assets as at 30 June 2024 (2023 -
10.4%). The Manager's policies for managing these risks are
summarised below and have been applied throughout the current and
previous year. The numerical disclosures in the tables listed below
exclude short-term debtors and creditors.
|
|
|
18 (a) Market risk.
The Company's investment portfolio is exposed to market price
fluctuations, which are monitored by the Manager in pursuance of
the investment objective as set out on page 1. Adherence to
investment guidelines and to investment and borrowing powers set
out in the management agreement mitigates the risk of exposure to
any particular security or issuer. Further information on the
investment portfolio is set out in the Investment Manager's
Report.
|
|
|
Market price risk arises mainly from
uncertainty about future prices of financial instruments used in
the Company's operations. It represents the potential loss the
Company might suffer through holding market positions as a
consequence of price movements. It is the Board's policy to hold
equity investments in the portfolio in a broad spread of sectors in
order to reduce the risk arising from factors specific to a
particular sector.
|
|
|
18 (a)(i) Interest rate risk. Interest rate
movements may affect:
|
|
|
- the level of income receivable on cash
deposits;
|
|
|
- interest payable on the Company's variable
rate borrowings; and
|
|
|
- the fair value of any investments in fixed
interest rate securities.
|
|
|
Management of the
risk. The possible effects on fair value and cash
flows that could arise as a result of changes in interest rates are
taken into account when making investment and borrowing decisions.
Details of the bank loan and interest rates applicable can be found
in note 13.
|
|
|
The Board imposes borrowing limits to ensure
gearing levels are appropriate to market conditions and reviews
these on a regular basis. Interest rate risk is the risk of
movements in the value of financial instruments as a result of
fluctuations in interest rates.
|
|
|
Financial assets. The
interest rate risk of the portfolio of financial assets at the
reporting date was as follows:
|
|
|
|
|
|
|
|
|
|
|
Floating rate
|
Non-interest bearing
|
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Danish Krona
|
-
|
-
|
9,923
|
22,239
|
|
|
Euro
|
-
|
-
|
104,139
|
69,528
|
|
|
Norwegian Krone
|
-
|
-
|
10,535
|
9,323
|
|
|
Singapore Dollars
|
-
|
-
|
27,374
|
21,124
|
|
|
Sterling
|
25,148
|
15,115
|
853,898
|
898,427
|
|
|
Swedish Krone
|
-
|
-
|
18,454
|
16,694
|
|
|
Swiss Francs
|
-
|
-
|
9,486
|
36,060
|
|
|
Taiwan Dollars
|
-
|
-
|
10,827
|
7,051
|
|
|
US Dollars
|
-
|
-
|
28,898
|
17,865
|
|
|
Total
|
25,148
|
15,115
|
1,073,534
|
1,098,311
|
|
|
|
|
|
|
|
|
|
The floating rate assets consist of cash at
bank and cash held in money market funds earning interest at
prevailing market rates.
|
|
|
The non-interest bearing assets represent the
equity element of the portfolio.
|
|
|
Financial liabilities.
The Company has floating rate borrowings by way of its loan
facility and fixed rate senior loan note issues, details of which
are in notes 13 and 14.
|
|
|
Interest rate sensitivity.
The sensitivity analysis below has been determined based on
the exposure to interest rates for both derivative and
non-derivative instruments at the reporting date and the stipulated
change taking place at the beginning of the financial year and held
constant in the case of instruments that have floating
rates.
|
|
|
Interest rate
sensitivity. The sensitivity analysis below has been
determined based on the exposure to interest rates for both
derivative and non-derivative instruments at the reporting date and
the stipulated change taking place at the beginning of the
financial year and held constant in the case of instruments that
have floating rates.
|
|
|
If interest rates had been 1% higher or lower
and all other variables were held constant, the Company's profit
before tax for the year ended 30 June 2024 and net assets would
increase/decrease by £175,000 (2023 - £53,000) respectively. This
is mainly attributable to the Company's exposure to interest rates
on its floating rate cash balances and borrowings.
|
|
|
18 (a)(ii) Foreign currency
risk. A proportion of the Company's investment
portfolio is invested in overseas securities whose values are
subject to fluctuation due to changes in foreign exchange rates. In
addition, the impact of changes in foreign exchange rates upon the
profits of investee companies can result, indirectly, in changes in
their valuations. Consequently, the Statement of Financial Position
can be affected by movements in exchange rates.
|
|
|
Management of the
risk. The revenue account is subject to currency
fluctuations arising on dividends receivable in foreign currencies
and, indirectly, due to the impact of foreign exchange rates upon
the profits of investee companies. It is not the Company's policy
to hedge this currency risk but the Board keeps under review the
currency returns in both capital and income.
|
|
|
Foreign currency risk exposure by currency of
denomination falling due within one year is set out in the table
below. Net monetary assets/(liabilities) comprise cash and loan
balances and exclude other debtors and receivables and other
payables (including amounts due to or from brokers).
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2024
|
30 June 2023
|
|
|
|
|
Net
|
|
|
Net
|
|
|
|
|
|
monetary
|
Total
|
|
monetary
|
Total
|
|
|
|
|
assets/
|
currency
|
|
assets/
|
currency
|
|
|
|
Investments
|
(liabilities)
|
exposure
|
Investments
|
(liabilities)
|
exposure
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Danish Krona
|
9,923
|
(313)
|
9,610
|
22,239
|
(789)
|
21,450
|
|
|
Euro
|
104,139
|
(3,434)
|
100,705
|
69,528
|
(2,832)
|
66,696
|
|
|
Norwegian Krone
|
10,535
|
(318)
|
10,217
|
9,323
|
(467)
|
8,856
|
|
|
Singapore Dollars
|
27,374
|
-
|
27,374
|
21,124
|
-
|
21,124
|
|
|
Swedish Krone
|
18,454
|
-
|
18,454
|
16,694
|
-
|
16,694
|
|
|
Swiss Francs
|
9,486
|
(319)
|
9,167
|
36,060
|
(1,055)
|
35,005
|
|
|
Taiwan Dollars
|
10,827
|
-
|
10,827
|
7,051
|
-
|
7,051
|
|
|
US Dollars
|
28,898
|
(1,898)
|
27,000
|
17,865
|
(1,235)
|
16,630
|
|
|
Total
|
219,636
|
(6,282)
|
213,354
|
199,884
|
(6,378)
|
193,506
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
sensitivity. The following table details the impact on
the Company's net assets to a 10% decrease (in the context of a 10%
increase the figures below should all be read as negative) in
Sterling against the foreign currencies in which the Company has
exposure. The sensitivity analysis includes foreign currency
denominated monetary and non-monetary items and adjusts their
translation at the period end for a 10% change in foreign currency
rates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
|
|
£'000
|
£'000
|
|
|
Danish Krona
|
|
|
|
|
961
|
2,145
|
|
|
Euro
|
|
|
|
|
10,071
|
6,670
|
|
|
Norwegian Krone
|
|
|
|
|
1,022
|
886
|
|
|
Singapore Dollars
|
|
|
|
|
2,737
|
2,112
|
|
|
Swedish Krone
|
|
|
|
|
1,845
|
1,669
|
|
|
Swiss Francs
|
|
|
|
|
917
|
3,501
|
|
|
Taiwan Dollars
|
|
|
|
|
1,083
|
705
|
|
|
US Dollars
|
|
|
|
|
2,700
|
1,663
|
|
|
Total
|
|
|
|
|
21,336
|
19,351
|
|
|
|
|
|
|
|
|
|
| |
|
|
18(a)(iii) Other price
risk. Other price risks (ie changes in market prices
other than those arising from interest rate or currency risk) may
affect the value of the quoted investments.
|
|
|
Management of the
risk. It is the Board's policy to hold an appropriate
spread of investments in the portfolio in order to reduce the risk
arising from factors specific to a particular sector. The
allocation of assets to international markets and the stock
selection process, as detailed in the section "Delivering the
Investment Policy", both act to reduce market risk. The Manager
actively monitors market prices throughout the year and reports to
the Board, which meets regularly in order to review investment
strategy.
|
|
|
Other price risk
sensitivity. If market prices at the reporting date
had been 10% higher or lower while all other variables remained
constant, the return attributable to Ordinary shareholders and
equity for the year ended 30 June 2024 would have
increased/decreased by £107,353,000 (2023 - £109,831,000).
|
|
|
18 (b) Liquidity risk.
This is the risk that the Company will encounter difficulty
in meeting obligations associated with financial liabilities as
they fall due in line with the maturity profile analysed as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within
|
Within
|
Within
|
More than
|
|
|
|
|
|
|
1 year
|
1-3 years
|
3-5 years
|
5 years
|
Total
|
|
|
At 30 June 2024
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
Bank loans
|
|
|
6,282
|
-
|
-
|
-
|
6,282
|
|
|
2.51% Senior Loan Note 8/11/27
|
|
|
-
|
-
|
40,000
|
-
|
40,000
|
|
|
4.37% Senior Loan Note 8/5/29
|
|
|
-
|
-
|
60,000
|
-
|
60,000
|
|
|
Interest cash flows on bank loans
|
|
|
10
|
-
|
-
|
-
|
10
|
|
|
Interest cash flows on 2.51% Senior Loan
Note
|
1,004
|
2,008
|
502
|
-
|
3,514
|
|
|
Interest cash flows 4.37% Senior Loan
Note
|
|
|
2,622
|
5,244
|
5,244
|
-
|
13,110
|
|
|
Cash flows on other creditors
|
|
|
7,056
|
-
|
-
|
-
|
7,056
|
|
|
|
|
|
16,974
|
7,252
|
105,746
|
-
|
129,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within
|
Within
|
Within
|
More than
|
|
|
|
|
|
|
1 year
|
1-3 years
|
3-5 years
|
5 years
|
Total
|
|
|
At 30 June 2023
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
Bank loans
|
|
|
6,378
|
-
|
-
|
-
|
6,378
|
|
|
2.51% Senior Loan Note 8/11/27
|
|
|
-
|
-
|
40,000
|
-
|
40,000
|
|
|
4.37% Senior Loan Note 8/5/29
|
|
|
-
|
-
|
-
|
60,000
|
60,000
|
|
|
Interest cash flows on bank loans
|
|
|
3
|
-
|
-
|
-
|
3
|
|
|
Interest cash flows on 2.51% Senior Loan
Note
|
1,004
|
2,008
|
1,506
|
-
|
4,518
|
|
|
Interest cash flows 4.37% Senior Loan
Note
|
|
|
2,622
|
5,244
|
5,244
|
2,622
|
15,732
|
|
|
Cash flows on other creditors
|
|
|
5,997
|
-
|
-
|
-
|
5,997
|
|
|
|
|
|
16,004
|
7,252
|
46,750
|
62,622
|
132,628
|
|
|
|
|
|
|
|
|
|
|
|
|
Management of the
risk. The Company's assets comprise readily realisable
securities which can be sold to meet funding commitments if
necessary. Short-term flexibility is achieved through the use of
committed loan and overdraft facilities.
|
|
|
As at 30 June 2024 the Company utilised
£6,282,000 (2023 - £6,378,000) of a £50,000,000 multi-currency
revolving bank credit facility, which is committed until 27 October
2024. Details of maturity dates and interest charges can be found
in note 13. The aggregate of all future interest payments at the
rate ruling at 30 June 2024 and the redemption of the loan amounted
to £6,292,000 (2023 - £6,381,000).
|
|
|
18 (c) Credit risk.
This is the risk that one party to a financial instrument will fail
to discharge an obligation and cause the other party to incur a
financial loss.
|
|
|
Management of the
risk. The risk is mitigated by the Investment Manager
reviewing the credit ratings of counterparties. The risk attached
to dividend flows is mitigated by the Investment Manager's research
of potential investee companies. The Company's custodian bank is
responsible for the collection of income on behalf of the Company
and its performance is reviewed by the Depositary (on an ongoing
basis) and by the Board on a regular basis. It is the Manager's
policy to trade only with A- and above (Long Term rated) and
A-1/P-1 (Short Term rated) counterparties. The maximum credit risk
at 30 June 2024 is £32,365,000 (2023 - £18,123,000) consisting of
£3,430,000 (2023 - £3,080,000) of dividends receivable from equity
shares, £3,787,000 (2023 - £nil) receivable from brokers and
£25,148,000 (2023 - £15,115,000) in cash and cash
equivalents.
|
|
|
None of the Company's financial assets are past
due or impaired (2023 - none).
|
|
|
|
|
|
|
|
|
|
|
| |
19.
|
Fair value hierarchy
|
|
|
FRS 102 requires an entity to classify fair
value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Categorisation within the hierarchy is determined on the basis of
the lowest level input that is significant to the fair value
measurement of each relevant asset or liability. The fair value
hierarchy has the following levels:
|
|
|
Level 1: unadjusted quoted prices in an active
market for identical assets or liabilities that the entity can
access at the measurement date;
|
|
|
Level 2: inputs other than quoted prices
included within Level 1 that are observable (ie developed using
market data) for the asset or liability, either directly or
indirectly; and
|
|
|
Level 3: inputs are unobservable (ie for which
market data is unavailable) for the asset or liability.
|
|
|
The valuation techniques used by the Company
are explained in the accounting policies note 2(e). The Company's
portfolio consists wholly of quoted equities, all of which are
Level 1.
|
|
|
The fair value of both the 2.51% Senior Loan
Notes and 4.37% Senior Loan Note have been calculated by
aggregating the expected future cash flows for that loans
discounted at a rate based on UK gilts issued with comparable
coupon rates and maturity dates plus a margin representing the
credit risk for Investment Grade A bonds. The fair value and
amortised cost amounts can be found in note 16.
|
|
|
All other financial assets and liabilities of
the Company are included in the Statement of Financial Position at
their book value which in the opinion of the Directors is not
materially different from their fair value.
|
|
|
20.
|
Related party transactions and transactions
with the Manager
|
|
|
|
Fees payable during the year to the Directors
and their interests in shares of the Company are considered to be
related party transactions and are disclosed within the Directors'
Remuneration section of the Directors' Remuneration
Report.
|
|
|
|
The Company has agreements with the Manager for
the provision of management, secretarial, accounting and
administration services and promotional activities. Details of
transactions during the year and balances outstanding at the year
end are disclosed in notes 4 and 5.
|
|
|
| |
21.
|
Capital management policies and procedures
|
|
|
The investment objective of the Company is to
achieve a high and growing income combined with capital growth
through investment in a portfolio principally of UK
equities.
|
|
|
The capital of the Company consists of debt
(comprising loan notes and bank loans) and equity (comprising
issued capital, reserves and retained earnings). The Company
manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to shareholders through
the optimisation of the debt and equity balance.
|
|
|
The Board monitors and reviews the broad
structure of the Company's capital on an ongoing basis. This review
includes:
|
|
|
- the level of equity shares in
issue;
|
|
|
- the planned level of gearing which takes into
account the Investment Manager's views on the market (net gearing
figures can be found in 'Financial Highlights'); and
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- the extent to which revenue in excess of that
which is required to be distributed should be retained.
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The Company's objectives, policies and
processes for managing capital are unchanged from the preceding
accounting period.
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Notes 13 and 14 give details of the Company's
bank facility agreement and loan notes respectively.
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22.
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Subsequent events
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On 30 August 2024, the Company
announced that it had agreed to a change in the management
fee arrangements with the Manager. With effect from 1 July 2024,
the management fee is based on 0.35% per annum for net assets up to
£1.1 billion and 0.25% per annum for net assets over £1.1 billion,
calculated and payable monthly.
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