Half-year Report

RIGHTS AND ISSUES INVESTMENT TRUST PLC
For the six months ended 30th June 2018

A copy of the Company's Half Yearly Financial Report for the six months ended 30th June 2018 will shortly be available to view and download from www.maitlandgroup.com/investments-trusts/rights-and-issues-investment-trust-plc/.  Neither the contents of this website nor the contents of any website accessible from hyperlinks on this website (or any other website) is incorporated into or forms part of this announcement.

Printed copies of the Report will be sent to shareholders shortly. Additional copies may be obtained from the Corporate Secretary – Maitland Administration services Limited, Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW.

INTERIM DIVIDEND
An interim dividend of 10.50p per share has been approved by the Board and is payable on 28th September 2018 to shareholders on the register as at 31st August 2018 (ex-dividend 30th August 2018).

The following text is copied from the Half Yearly Financial Report.

CHAIRMAN’S STATEMENT
Markets have stalled in 2018 with a 0.5% fall in the FTSE All-Share Index in the six months. UK Smaller Companies performed marginally better with a 1.5% increase in the relevant indices.

The Trust again made progress with the net asset value of the income shares increasing by 4.9% to 2487.9p. Total equity again exceeds £200m despite significant expenditure on share repurchases.

The share buy-back programme has continued in the half year with a further £5.8m of purchases and the issued equity has now been reduced by over 10% since commencement of the programme.

The interim income dividend is being raised by 2.4% to 10.5p.

Brexit remains the dominating political consideration in the UK and, even at this late stage in the exit process, it is unclear what end state will result.

Dr D. M. BRAMWELL
Chairman
27th July 2018

You can view or download copies of the Half Yearly and the Annual Reports from our website at www.maitlandgroup.com/investment-trusts/rights-and-issues-investment-trust-plc/

The Half Yearly Report will be posted to shareholders and copies are available at the registered office of the Company.

Risks and uncertainties
Cautionary statement

This Half Yearly Report contains forward-looking statements that involve risk and uncertainty. These have been made by the Directors in good faith based on the information available to them at the time of their approval of this Report. Due to the inherent uncertainties, including stock market risk factor, actual results may differ materially from those expressed or implied by these forward-looking statements.

There are a number of potential risks and uncertainties which could have a material impact on the Company’s performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Company’s results continue to be exposed to market price risk. Further information on the principal long-term risks and uncertainties of the Company is included in the latest Annual Report.

STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30th June 2018

			Six months ended 30th June 2018			Six months ended 30th June 2017
	Notes	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	2	1,814	–	1,814	1,359	–	1,359
Other operating income	2	8	–	8	1	–	1
Total income		1,822	–	1,822	1,360	–	1,360
Gains on fair value through profit or loss assets		–	8,873	8,873	–	30,968	30,968
Gains on subsidiary holding		–	–	–	–	–	–
		1,822	8,873	10,695	1,360	30,968	32,328
Expenses
Investment management fee		–	–	–	–	–	–
Other expenses		395	44	439	372	45	417
		395	44	439	372	45	417
Profit before tax		1,427	8,829	10,256	988	30,923	31,911
Tax –			–	–	–	–	–
Profit for the period		1,427	8,829	10,256	988	30,923	31,911
Earnings per share
Return per Income
Share		17.30p	107.30p	124.60p	11.20p	351.00p	362.20p

Return per share is calculated using the weighted average number of Income shares in issue during the period ended 30th June 2018 of 8,228,933 (2017: 8,810,500).

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards as adopted by the EU. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement are those of the single entity and derive from continuing operations.

The profit for the period disclosed above represents the Company’s total Comprehensive Income. The Company does not have any other Comprehensive Income.

An interim dividend of 10.50p (2017: 10.25p) per share and amounting to £845,870 (calculated as at 26th July 2018 (2017: £884,000) is payable on 28th September 2018 to shareholders on the register as at 31st August 2018 (ex-dividend 30th August 2018).

			Year ended 31st December 2017
	Notes	Revenue £'000	Capital £'000	Total £'000
Investment income	2	3,329	–	3,329
Other operating income	2	3	–	3
Total income		3,332	–	3,332
Gains on fair value through profit or loss assets		–	31,083	31,083
Gains on subsidiary holding		–	151	151
		3,332	31,234	34,566
Expenses
Investment management fee		–	–	–
Other expenses		810	89	899
		810	89	899
Profit before tax		2,522	31,145	33,667
Tax		–	–	–
Profit for the period		2,522	31,145	33,667
Earnings per share
Return per Income
Share		29.10p	359.50p	388.60p

Return per share is calculated using the weighted average number of Income shares in issue during the year ended 31st December 2017 of 8,662,424.

The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 – 436 of the Companies Act 2006. The information for the six months to 30th June 2018 and 30th June 2017 has not been audited.

The information for the year ended 31st December 2017 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2) or (4) of the Companies Act 2006.

The auditors have reviewed the financial information for the six months ended 30th June 2018 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information and their report is on subsequent pages.

BALANCE SHEET
as at 30th June 2018

Non-current assets	30th June 2018 £'000	30th June 2017 £'000	31st December 2017 £'000
Investments – fair value through profit or loss	188,173	184,168	179,144
	188,173	184,168	179,144
Current assets
Trade and other receivables	937	2,182	579
Amounts due from Group undertakings	78	78	78
Cash and cash equivalents	12,302	17,529	19,069
	13,317	19,789	19,726
Total assets	201,490	203,957	198,870
Current liabilities
Trade and other payables	65	228	180
	65	228	180
Total assets less current liabilities	201,425	203,729	198,690
Net assets	201,425	203,729	198,690
Equity
Called up share capital	2,025	2,164	2,094
Capital redemption reserve	230	91	161
Retained reserves:
Capital reserve	62,096	65,784	65,434
Revaluation reserve	134,491	133,496	128,151
Revenue reserve	2,583	2,194	2,850
Total equity	201,425	203,729	198,690
Net asset value per share
Income shares	2,487.90p	2,353.60p	2,372.30p

STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June 2018

For the six months ended 30th June 2017 Balance at	Share capital £'000	Capital redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2016	2,241	14	62,695	111,580	2,973	179,503
Profit for the period	–	–	9,007	21,916	988	31,911
Total recognised income and expense	2,241	14	71,702	133,496	3,961	211,414
Income shares bought back and cancelled	(77)	77	(5,918)	–	–	(5,918)
Dividends (Note 3)	–	–	–	–	(1,767)	(1,767)
Balance at 30th June 2017	2,164	91	65,784	133,496	2,194	203,729

For the year ended 31st December 2017 Balance at	Share capital £'000	Capital redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2016	2,241	14	62,695	111,580	2,973	179,503
Profit for the year	–	–	14,574	16,571	2,522	33,667
Total recognised income and expense	2,241	14	77,269	128,151	5,495	213,170
Income shares bought back and cancelled	(147)	147	(11,835)	–	–	(11,835)
Dividends (Note 3)	–	–	–	–	(2,645)	(2,645)
Balance at 31st December 2017	2,094	161	65,434	128,151	2,850	198,690

For the six months ended 30th June 2018 Balance at	Share capital £'000	Capital redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2017	2,094	161	65,434	128,151	2,850	198,690
Profit for the period	–	–	2,489	6,340	1,427	10,256
Total recognised income and expense	2,094	161	67,923	134,491	4,277	208,946
Income shares bought back and cancelled	(69)	69	(5,827)	–	–	(5,827)
Dividends (Note 3)	–	–	–	–	(1,694)	(1,694)
Balance at 30th June 2018	2,025	230	62,096	134,491	2,583	201,425

STATEMENT OF CASH FLOWS
for the six months ended 30th June 2018

Cashflows from operating activities	30th June 2018 £'000	30th June 2017 £'000	31st December 2017 £'000
Profit before tax	10,256	31,911	33,667
Adjustments for:
Gains on investments	(8,873)	(30,968)	(31,083)
Gains on revaluation of subsidiary	–	–	(151)
Purchases of investments	(4,018)	(7,226)	(8,338)
Proceeds on disposal of investments	3,862	12,199	20,249
Operating cash flows before movements in working capital	1,227	5,916	14,344
(Increase)/decrease in receivables	(358)	198	154
(Decrease)/increase in payables	(33)	(33)	7
Net cash from operating activities	836	6,081	14,505
Cashflows from financing activities
Income shares bought back and cancelled	(5,909)	(5,856)	(11,862)
Dividends paid	(1,694)	(1,767)	(2,645)
Net cash used in financing activities	(7,603)	(7,623)	(14,507)
Net decrease in cash and cash equivalents	(6,767)	(1,542)	(2)
Cash and cash equivalents at beginning of period	19,069	19,071	19,071
Cash and cash equivalents at end of period	12,302	17,529	19,069

NOTES TO THE HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June 2018

1.        Accounting Standards

The condensed interim financial report has been prepared in accordance with International Financial Reporting Standards (IFRSs), including IAS 34 “Interim financial reporting” as adopted by the European Union. The same accounting policies and methods of computation are followed in the interim financial report as those used in the Company’s latest published annual financial statements.

2.        Income	30th June		30th June	31st December
	2018		2017	2017
	£'000		£'000	£'000
Total income comprises:
Dividends	1,814		1,359	3,329
Interest	8		1	3
Total income	1,822		1,360	3,332
3.        Dividends
		30th June 2018 £'000	30th June 2017 £'000	31st December 2017 £'000
Amounts recognised as distributions to equity holders in the year:
Income (Paid)
Interim dividend for the year ended 31st December 2017 of 10.25p per share		–	–	879
Final dividend for the year ended 31st December 2017 of 20.50p per share (year ended 31st December 2016: 20.00p)		1,694	1,767	1,766
		1,694	1,767	2,645

Income

846

Income	30th June 2018 £'000
Proposed interim dividend of 10.50p per share	846
	846

This proposed interim dividend was approved by the Board on 27th July 2018, has been calculated based on shares in issue at 26th July 2018, and has not been included as a liability at 30th June 2018.

4.      Valuation of financial instruments

IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note 1 Investments, as set out in the Company’s Annual Report and Financial Statements for the year ended 31st December 2017.

The fair value hierarchy has the following levels:

Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.

Level 2 – Having inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (ie as prices) or indirectly (ie derived from prices).

Level 3 – Having inputs for the asset or liability that are not based on observable data.

30th June 2018 Financial assets at fair value through profit or loss		Level 1 £000	Level 2 £000		Level 3 £000		Total £000
UK Equity Listed		143,791	–		–		143,791
AIM traded stocks		43,655	–		–		43,655
Delisted stock		–	21		–		21
Investment in subsidiary undertaking		–	–		706		706
Net fair value		187,446	21		706		188,173
30th June 2017		Level 1	Level 2		Level 3		Total
		£000	£000		£000		£000
Financial assets at fair value through profit or loss
UK Equity Listed		135,979	–		–		135,979
AIM traded stocks		47,634	–		–		47,634
Investment in subsidiary undertaking		–	–		555		555
Net fair value		183,613	–		555		184,168
31st December 2017		Level 1	Level 2		Level 3		Total
Financial assets at fair value through profit or loss	£000			£000		£000	£000
UK Equity Listed	134,367			–		–	134,367
AIM traded stocks	44,050			–		–	44,050
Delisted stock	–			21		–	21
Investment in subsidiary undertaking	–			–		706	706
Net fair value	178,417			21		706	179,144

There were no transfers between Level 1 and Level 2 during the period.

A reconciliation of fair value measurements in Level 3 is set out in the following table.

	30th June 2018 £'000	30th June 2017 £'000	31st December 2017 £'000
Opening Balance	706	555	555
Purchases	–	–	–
Sales	–	–	–
Total gains or losses included in gains on investments in the Income Statement:
– on assets sold	–	–	–
– on assets held at period end	–	–	151
Closing Balance	706	555	706

The Level 3 investment relates to the Company’s subsidiary, Discretionary Unit Fund Managers Limited, which has been valued based on the most recent estimated NAV.

5.        Related Party Transactions

Under IFRS, the Directors have been identified as related parties. Their fees and interests for the year ended 31st December 2017 have been disclosed in the Directors’ Annual Remuneration Report within the 2017 Annual Report and Financial Statements.

During the period the Company had the following transactions with Discretionary Unit Fund Managers Limited, its subsidiary undertaking:

	30th June	30th June	31st December
	2018	2017	2017
	£'000	£'000	£'000
Dividends received	-	-	-
	-	-	-
Amounts owed by subsidiary undertaking	78	78	78

6.        Going Concern

The Company's assets comprise mainly realisable equity securities and cash and the value of its assets is greater than its liabilities. Additionally, after reviewing the Company's budget including the current financial resources and projected expenses for the next twelve months and its medium-term plans, the Directors believe that the Company's resources are adequate for continuing in business for the foreseeable future. Accordingly it is appropriate to continue to prepare accounts on a going concern basis.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

DIRECTORS’ STATEMENT OF RESPONSIBILITY FOR THE HALF YEARLY FINANCIAL REPORT

The Directors are responsible for preparing the Half Yearly financial report in accordance with applicable law and regulations.

The Directors confirm that to the best of their knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 “Interim financial reporting”; and

• the Half Yearly management report includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

This report was approved on 27th July 2018.

Dr D. M. BRAMWELL
Chairman

PORTFOLIO STATEMENT

Details of the twenty largest investments as at 30th June 2018 are given below by market value:

UK Investments	Holdings			Market Value
	30th June 2018	31st December 2017	30th June 2018 £’000	31st December 2017 £’000
Scapa Group	6,250,000	6,350,000	27,075	27,765
Hill & Smith Holdings	1,434,230	1,434,230	21,212	19,204
Treatt	4,700,000	4,750,000	20,586	21,577
Vp	1,800,000	1,800,000	18,540	15,570
Macfarlane Group	17,250,000	17,250,000	18,285	13,283
RPC Group	2,400,000	2,400,000	17,947	21,156
Colefax Group	2,250,000	2,436,979	11,475	12,429
Electrocomponents	1,300,000	1,300,000	9,849	8,132
Spirax-Sarco Engineering	120,714	120,714	7,865	6,784
Renold	27,000,000	12,300,000	7,749	5,719
Menzies (John)	882,142	882,142	5,531	5,941
Vitec Group	400,000	400,000	5,240	4,520
Elecosoft	4,520,781	4,520,781	3,345	1,854
Low & Bonar	6,000,000	6,000,000	2,868	3,195
Titon Holdings	1,265,000	1,265,000	2,404	1,923
Castings	400,000	400,000	1,620	1,763
Dialight	238,095	238,095	1,190	1,310
National Grid	137,500	137,500	1,153	1,202
GlaxoSmithKline	70,000	70,000	1,071	893
Chamberlin	1,000,000	1,000,000	900	640
			185,905	174,860
Balance held in other investments			2,268	4,284
			188,173	179,144

Unless otherwise specified, the actual holdings are, in each case, of ordinary shares or stock units and of the nominal value for which listing has been granted.

INDEPENDENT REVIEW REPORT TO RIGHTS AND ISSUES INVESTMENT TRUST PLC

INTRODUCTION

We have been engaged by the Company to review the financial statements in the Half Yearly Financial Report for the six months ended 30th June 2018 which comprises the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and the related explanatory notes 1 to 6. We have read the other information contained in the Half Yearly Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

The report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

DIRECTORS’ RESPONSIBILITIES

The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 1, the Annual Financial Statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial statements included in this Half Yearly Financial Report have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” as adopted by the European Union.

OUR RESPONSIBILITY

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than in an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the financial statements in the Half Yearly Financial Report for the six months ended 30th June 2018 are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

JEREMY STAINES
For and on behalf of Begbies
Chartered Accountants
9 Bonhill Street
London EC2A 4DJ
27th July 2018