Final Results

RNS Number : 6703X

Henderson Diversified Income Ltd

23 February 2017

 

23 February 2017

This announcement contains regulated information.                      

HENDERSON DIVERSIFIED INCOME LIMITED

Annual Financial Report for the Year Ended 31 October 2016

STRATEGIC REPORT

Performance Highlights

	2016	2015
NAV per share at year end1	89.71p	88.36p
Share price at year end2	92.00p	90.50p
Dividend for the year3	5.10p	5.10p
Dividend yield	5.54%	5.64%
Ongoing charge for the year4	0.98%	1.10%
Total gearing at year end	19.30%	16.90%
Number of portfolio investments held at year end	108	122
Performance fee5	£882,000	£410,000

1 Calculated using published daily net asset values including current year revenue

2 Mid-market closing price

3 Ordinary dividends paid per share for each financial year ended 31 October (includes dividends declared but not yet paid)

4 The ongoing charge excludes the performance fee. The ongoing charge including the performance fee was 1.58% (2015: 1.39%)

5 The 2015 performance fee was paid in the financial year ended 31 October 2016. The 2016 performance fee will be paid in the financial year ending 31 October 2017

Investment Objective

The Company's investment objective is to provide shareholders with a high level of income and capital growth over the longer term. The Company aims to deliver these outcomes by investing selectively across the full spectrum of fixed income asset classes including secured loans, high yield corporate bonds and investment grade corporate bonds.

Portfolio

The portfolio is managed by reference to a benchmark of three month sterling Libor plus 2.00%. The portfolio is therefore not constrained by concepts such as the size, sector or domicile of the issuer.

Derivatives and gearing

The Company and its wholly-owned subsidiary, Henderson Diversified Income Luxembourg S.a.r.l. (the 'Group') uses synthetic gearing in the form of credit default swaps which are a credit derivative, to enable it to earn additional income by taking the default risk on certain bonds.

The Group may use credit derivatives (including credit default swaps) in addition to interest rate futures and interest rate swaps. Both the credit derivatives and the interest rate futures and swaps are used in order to take a synthetic exposure to, or to hedge, an investment position where the derivative contract is more efficient or cost effective than a position in the underlying physical asset.

The Group's exposure to credit derivatives is capped at a maximum net long or short position of 40% of their net assets. It may employ financial gearing to enhance investment returns but total gearing (both financial gearing and synthetic gearing combined) may not exceed 40% of net assets. The current borrowing facility is for a maximum of £45.5 million.

The interest rate exposure of the Company is currently managed in a range of between 0 and 8 years.

Risk

For more information about the Company's principal risks please see below.

Subsidiary

The subsidiary was consolidated into the Company's financial statements but following changes to accounting standards during the year ended 31 October 2015, it is held at fair value and disclosed as 'investment in subsidiary at fair value through profit or loss' on the Company Balance Sheet.

Once again a summary of key financial information, based on fully aggregated accounts in the Annual Report, provides the key financial information from the fully aggregated accounts and enables a fair comparison to be made with earlier periods.

Chairman's Statement

Introduction

I am pleased to report a positive year for your Company notwithstanding the continued volatility in markets particularly early in 2016. The net asset value per ordinary share rose 1.50% and the total dividend for the year has been maintained. Demand for the Company's shares was strong and we have continued our policy of issuing new shares at a premium to net asset value where there is demand.

In October 2016 we announced that we had undertaken a full review of the structure of your Company noting that the existing structure may involve increased complexity and risk. We have since concluded that it would be in the best interests of shareholders to simplify the tax structure by electing to join the UK investment trust company tax regime, including changing its place of incorporation to the United Kingdom. Details of the proposals to effect this are given below and in the Circular that will be circulated to shareholders with the Annual Report.

Proposals to re-domicile the business of the Company

It is proposed that the re-domicile of the business of your Company to the United Kingdom will be effected by way of a scheme of reconstruction and winding up of the existing Company. Under the scheme the assets and liabilities of the existing Company will be transferred to a newly incorporated, closed-ended, UK resident investment company in consideration for the issue of shares in the new company to shareholders. Shareholders will be issued one share in the new Company for each share they hold in the existing Company. Therefore, the shareholders in the new company will be the same as the shareholders in the existing Company and will each hold the same number of shares in the new Company as they held in the existing Company immediately prior to the completion of the scheme.

The scheme is subject to, amongst other conditions, approval by shareholders at the EGM of the Company to be held immediately following the AGM on Wednesday 26 April 2017 further details below. If the scheme becomes effective the newly incorporated UK resident investment company will be in essence a continuation of the existing portfolio and management arrangements whilst implementing a lower running cost corporate structure.

Dividends and dividend policy

On 31 December 2016 a fourth interim dividend of 1.35p per share for the year ended 31 October 2016 was paid. In this financial year, your Board also paid three interim dividends of 1.25p per share making 5.10p for the financial year under review, which is the same as the prior year.

On 23 February 2017 a first interim dividend of 1.25p per share was declared for the year ending 31 October 2017. The dividend will be paid on 31 March 2017 to shareholders on the register as at 3 March 2017. The shares will be quoted ex-dividend on 2 March 2017.

Performance

Your Company's net asset value per ordinary share rose from 88.36p to 89.71p over the year as did the share price from 90.50p to 92.00p.

Gearing

Your Board maintains an active gearing policy given the attractive arbitrage between the cost of debt and the yields that can be achieved in the portfolio and the desire to at least maintain the dividend at the current level. This is delivered through a combination of traditional financial gearing, which is funded using a loan facility provided by Scotiabank, and synthetic gearing, being the gearing effect of investing in credit derivatives. Over the year under review total gearing rose from 16.90% to 19.30% with the emphasis shifting from synthetic gearing to financial gearing, reflecting the lower risk reward profile of credit derivatives at this point in the cycle.

Share issues

In the year under review your Company issued 11,350,000 shares. A further 3,700,000 shares have been issued between 1 November 2016 and 23 February 2017.

Aggregate financial information

Your Board has once again included a summary of key financial information based on fully aggregated accounts of the Company and its subsidiary below which provides the key financial information from the fully aggregated accounts and enables a fair comparison to be made with earlier periods.

Board

In view of the proposal to change your Company's place of incorporation to the UK, your Board's succession plan has been accelerated. Helen Green will retire as a Director on 28 February 2017 whilst Nigel Parker and myself will retire at the 2017 AGM, which is also the proposed impact day of the proposals. I am very pleased that Angus Macpherson has agreed to succeed me as your Chairman following the AGM. Ian Wright has agreed to succeed Helen Green as Chairman of the Audit Committee following her departure at the end of February 2017. Three new UK based directors have agreed to join the new company Board, alongside Angus Macpherson and Ian Wright -  Stewart Wood, Denise Hadgill and Roderick Davidson.

I should like to thank my fellow Directors for their diligence and wise counsel over the last nine years and wish the new Board every success in the future.

Annual General Meeting

Our ninth AGM will be held on Wednesday 26 April 2017 at 8.30 a.m. at our registered office in Jersey. Your Board recommends unanimously to shareholders that they vote in favour of each of the resolutions, as the Directors intend to do in respect of their own beneficial holdings.

As in previous years a shareholder event, which includes the opportunity to meet the Fund Managers, will be held on Thursday 27 April 2017 at 11.00 a.m. at Henderson's offices in London and will be followed by light refreshments. For those that cannot attend in person the shareholder event will be available to watch online at www.henderson.com/trustslive

Extraordinary General Meeting

As mentioned above an EGM will be convened immediately following the AGM on Wednesday 26 April 2017 at our registered office in Jersey. This is when shareholders will be formally asked to vote on the proposals to re-domicile the business of the Company to the United Kingdom by way of a scheme of reconstruction and winding up of the existing Company.

The EGM will follow the AGM because if shareholders decide to vote against the EGM proposals and winding up of the existing Company, it will then be able to continue in operation for the year ending 31 October 2017 with the usual shareholder approvals obtained.

Outlook

While the Brexit result of the EU referendum last year may yet be a big political crisis in the UK it is not yet a financial crisis. Credit markets are not currently suggesting systemic risk in the banking sector or a move to a higher default rate regime for corporates. Indeed, banks are in a relatively healthy place due to additional regulation and stress testing over the last few years. It would appear that Donald Trump's presidency and politics in Europe, particularly the German and French elections, are going to be key themes in 2017. If Trump cannot invigorate the US economy meaningfully to justify the very large price moves that have been seen in both the equity and bond markets, there is a risk that this would mark a return to secular stagnation. The European elections could threaten the whole European project resulting in increased volatility. In the short term, it looks like a tough outlook for bond managers, but that said there will be opportunities for our Fund Managers.

 

Fund Managers' Report

Portfolio performance

The year under review will be remembered primarily for the rising tide of populist politics that caught many market participants, we included, unawares. The votes for Brexit and uncertainty in the US election had significant repercussions for interest rate sensitive markets specifically currencies and government bonds. However, for credit markets and default risk, which represent the primary exposure in your Company's portfolio, they were essentially non-events. Neither created a fear of systemic failures via the banking sector nor worries about a severe recession which could trigger a traditional default cycle. For your Company the most volatile period of the year proved to be January/February 2016. At this time corporate bond and loan markets experienced a severe sell-off triggered firstly, by concerns about a global economic slowdown (specifically China and emerging markets); secondly, by plummeting commodity prices; and finally, by worries about the health of the global banking system, particularly in Europe. It was a perfect storm that made the political events of 2016 pale in comparison.

Your Company returned 7.6% total return per ordinary share over the course of the year. From a credit selection perspective, the portfolio weathered the challenges of the commodity downturn well, reflecting our aversion to highly cyclical corporate bonds and loans. We are naturally wary of lending to traditional industrial or consumer cyclical sectors where cash flow and leverage are relatively unpredictable. However, we do hold a significant number of financial bonds predominantly issued by UK banks and insurers. The concerns about the financial sector in Europe caused significant volatility in the capital value of our portfolio particularly during the height of the concerns about this sector in early 2016 but ultimately did not result in any real default risk.

Asset allocation

Three broad opportunities presented themselves over the year given the events mentioned above. Firstly, in early 2016 following a significant widening in credit spreads, we found a number of attractive yield opportunities in ten and thirty year maturity quality investment grade corporate bonds in the US. Yields of between 4.0% and 5.5% were on offer in US and other corporate bonds issued by companies such as Walgreens, Sky, Reynolds, Deutsche Telekom, Verizon and AT&T, which we bought and locked in. The next significant move was reducing the holdings in insurance bonds in July 2016 following the Brexit vote and concerns about lower interest rates for longer. These bonds tend to be relatively illiquid and have caused us concern in the past so the price rise post the Brexit vote provided an opportunity to reduce exposure. Finally, the equity holdings of the Company were sold down in their entirety in October 2016 with the UK stock market approaching a record high.

Stock selection

In addition to asset allocation, the constant stream of new issues coming to market continued to provide a healthy choice of potential investments for the Company to supplement those from existing issuers. Our long term RAC secured loan holding was refinanced into bonds with attractive coupons of 4.50% and 4.87%. UBS also issued a deeply subordinated AT1 bond with a coupon of 6.875% which we participated in and Eircom, the incumbent Irish telecom provider, also issued Euro bonds at 4.50%. Perhaps the stand out new issue opportunity of the year was the jumbo bond issue from Dell being an 8.10% coupon twenty year secured investment grade bond; we built up a moderate sized position in the new issue and increased it shortly after.

Secured loans

The European secured loan market has delivered strong returns in the last twelve months despite significant periods of volatility in fixed income markets. The market return based on the CS Western European Leveraged Loan Index (hedged to GBP) equated to 5.90%, albeit this has been earned towards the end of the period under review as the return was mildly negative through the first four months as a result of declining loan prices. From March 2016 there has been a significant rally with all three major players back in buying mode (banks, collateralized loan obligations ('CLO') and institutional investors). This has given rise to a significant proportion of the market trading above par and resulted in repricing activity from May 2016 (given the lack of call protection on most loans, borrowers can seek to reprice their loans down in periods of market strength). After a slow start, new loan issuance in Europe has recovered strongly since the Spring and is now tracking marginally ahead of the prior year (+1%) with there being €56bn of issuance year-to-date (source S&P LCD).

The portfolio has experienced a reasonable degree of turn over the period through:

(i) early redemptions from successful IPOs or refinancing's (loans that were repaid in full included RAC, Brake Bros and Polyconcept) and;

(ii) sales of loans that had experienced some volatility in secondary trading price including BMC Software, Formula One and ERM (a global environmental consultancy business impacted by lower oil and gas and commodity related revenues).

Our strategy over the period has been to recycle proceeds into primary loans, with new additions including Tele Columbus (Germany, cable) and Diebold (US, technology), as well as adding to existing positions that have proven resilient. As a consequence of this and the exits from the portfolio mentioned above, the number of loan holdings had reduced from 35 to 29 at the end of the financial year. The secured loan portfolio did not suffer any defaults over the year.

We consider that the portfolio is now more defensively positioned with all of the holdings being first lien senior secured following the exit or early redemptions of a modest number of higher yielding second lien loans. The running yield on the portfolio has reduced to 4.70% from 5.20% compared to the prior period given the above and the repricing activity noted.

Looking forward, we expect loans to deliver a return of 4.0-5.0% over the next twelve months, broadly in line with the coupon in view of the limited scope for capital appreciation and reflective of an ongoing benign default environment.

Outlook

Our primary concern for 2017 is European politics, which carries the potential for significant systemic risk and a genuine credit market event. This is different to the events of 2016 which, as mentioned earlier, were not. The reason Europe provides such risk is the specifically anti-Euro messaging from candidates in core Europe such as Marine Le Pen in France. Should she be elected as President of France we would expect something worse than the vicious sell-off that we saw during the peripheral crises of 2010- 2012. Indeed, in this event, we would be discussing the mechanics of a break-up of the Euro area from the core outwards and the ongoing solvency of the European banking system as a result. Absent this severe political crisis, the outlook for your Company remains relatively benign. We still have not seen the kind of business cycle excesses that sow the seeds for a major default cycle. European companies particularly are being remarkably disciplined in their use of debt. In essence, we have a fundamental environment of low growth, low inflation and low default rates which provides a supportive backdrop for investors in credit markets albeit with the potential for a total meltdown of the European political system. It should be an interesting year ahead.

Portfolio Information

Ten largest investments at 31 October 2016

Ranking 2016	Ranking 2015	Investment	Principal activities	Type of investment	Geographical area	Valuation 2016 £'000	Percentage  of portfolio
1	61	Verizon Communications	Telecommunications	Investment grade bond	US	4,239	2.31
2	1	Lloyds Group	Banks	High yield bond/ Investment grade bond	UK	3,930	2.15
3	4	Virgin Media	Media	High yield bond	UK	3,711	2.03
4	36	Kloeckner Pentaplast	Packaging and containers	Secured loan	Germany	3,629	1.98
5	6	Orange	Telecommunications	Investment grade bond	France	3,529	1.93
6	29	Ardagh	Packaging and containers	High yield bond	Ireland	3,424	1.87
7	20	Co-Operative Group	Food	High yield bond	UK	3,369	1.84
8	3	Nationwide Pref	Banks	Preference stock	UK	3,343	1.83
9	19	BNP Paribas	Banks	Investment grade bond	France	3,318	1.81
10	-	Aramark	Food service	High yield bond	US	3,257	1.78

Principal risks and uncertainties

The Directors have carried out a robust assessment of the principal risks facing the Company. They have subsequently drawn up a matrix of risks facing the Company and put in place a schedule of investment limits and restrictions appropriate to the Company's investment objective and policy, in order to mitigate risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are set out below.

The Board has considered these principal risks in light of the proposals to re-domicile the business of the Company to the United Kingdom by way of a scheme of reconstruction. It has therefore included re-domiciling risk to the matrix from its assessment of the year under review. The Board considers the other principal risks to have remained unchanged throughout the year under review. These principal risks will continue to apply if the proposals to re-domicile the business of the Company are not approved by shareholders.

Risks	Controls and mitigation	Board action/consideration
Market and financial Market risk arises from uncertainty about the future prices of the Company's investments. The fair value or future cash flows of a financial instrument held by the Company may fluctuate due to changes in market prices. The financial risks faced by the Company include currency risk, market price risk, interest rate risk, liquidity risk and credit risk.	Henderson assesses the exposure to market risk when making each investment decision, and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. Henderson and BNP Paribas Securities Services provide an annual ISAE 3402 and AAF 01/06 Report respectively to the Board. The Board also receives quarterly internal controls reports from these service providers as well as the monthly investment limits and restrictions schedule, detailed in investment strategy above.	The Board reviews and agrees policies for managing these risks.
Credit risk including credit default risk The Company will be exposed to credit risk, both with counterparties with which it trades and issuers of financial instruments, if the issuer fails to fulfil its obligations or commitments that it has entered into. The Company's investments expose it to the risk of default on the Company's investments by counterparties and the risk of loss of principal and accrued interest. For example, a bond issuer may fail to meet its operating projections and this could lead to the issuer defaulting interest and/or capital payments. There is also a default risk for any derivative contracts that the Company enters into should the counterparty to the derivative default on its obligations under the contract.	The Fund Managers consider credit risk and credit default risk as part of their assessment of an investment before the time of transaction and also as part of their monitoring of the portfolio. They may also invest in credit default swaps and certain other derivative instruments in order to enhance and protect the Company's income and total returns. Credit derivatives are used as a way of managing the aggregate credit exposure of the Company without buying or selling a physical bond/loan. To the extent that the credit derivative exposure is not covered by cash held by the Company then any net long exposure would act as synthetic gearing. By selling protection (going long risk) the Fund Managers can increase the Company's exposure to a particular reference entity. In return for taking this credit risk the Company will receive a specified income over the life of the contract but will be exposed to capital losses should the reference entity breach the terms of the contract in the intervening period. Transactions involving derivatives are only entered into with investment banks, the credit ratings of which are taken into account so as to minimise the risk to the Company of default.	The Board has set a maximum aggregate exposure of 5% of the Company's net assets to any counterparty that has a rating below a single A equivalent from a number of ratings agencies. Where the counterparty's credit rating is downgraded, this would lead to this exposure limit being breached, the position will be corrected within a timeframe that is in the best interest of shareholders. The Board has set a maximum net exposure to credit derivatives which may not at any time exceed 40% of the Company's net assets. It may employ financial gearing to enhance investment returns but total gearing (both financial and synthetic gearing combined) may not exceed 40% of net assets. Adherence to these limits is reviewed at each Board meeting.
Currency hedging/foreign exchange The Company accounts for its activities and reports its results in sterling while investments may be made and realised in other currencies. In any instances where the Company does not hedge its currency exposure, the movement of exchange rates between sterling and the other currencies in which the Company's investments are denominated or its borrowings are drawn down, may have a material effect, unfavourable as well as favourable, on the returns otherwise experienced on the investments made by the Company. Although the Fund Managers seek to manage any foreign exchange exposure in relation to the Company, there is no assurance that this can be performed effectively. Any currency hedging may force the Fund Managers to realise underlying investments, as well as adversely affecting the overall value of the portfolio and the net asset value per share of the Company. Movements in the foreign exchange rate between sterling and the currency applicable to a particular shareholder may have an impact upon such shareholder returns in their own currency of account.	The Company engages in currency hedging of capital risk but not income risk. It does not use financial instruments to mitigate the currency exposure in the period between the time that income is included in the financial statements and its receipt.	The Board has assessed the Company's income and equity and concluded that neither is materially sensitive to changes in exchange rates. The Board reviews the currency exposure of the portfolio at each meeting.
Interest rates In the event of a significant rising interest rate environment and/or economic downturn, loan defaults may increase and such an increase could result in losses that may adversely affect the Company's operating results. In the event of a general rise in interest rates, the value of certain investments that may be contained in the Company's investment portfolio, particularly those which are not at floating rates may fall, reducing the net asset value per share of the Company.	As the Company's dividend yield target is three month sterling Libor plus 2.00%, shareholders' income should not be diminished should interest rates rise. Likewise, if interest rates fall, the Company's income will fall.	The Company remains committed to the three-month sterling Libor plus 2.00% target yield on net assets. This is reviewed at each Board meeting.
Borrowing As an investment company, the Company uses borrowing to enhance returns to shareholders. Failure to maintain the loan facility because of a breach of agreed covenants, or inability to renew the loan facility because of the bank's unwillingness to lend could cause possible loss of shareholders' assets because of forced sales at short notice at a disadvantageous price.	The Board relies on its Corporate Secretary to adhere to the terms of the loan facility.	The Corporate Secretary has responsibility for the ongoing monitoring of the bank covenants and reports to the Board at each meeting adherence to these as part of the monthly limits and restrictions schedule.
Tax Any change in the Company's tax status or in taxation legislation in Jersey, Luxembourg, the United Kingdom or any other tax jurisdiction relevant to the Company, could adversely affect the value of the investments held by the Company, affect the Company's ability to achieve its investment objective or alter the post-tax returns to shareholders.	Under current double tax treaty legislation the Company's subsidiary is able to secure withholding tax at source on loan interest payments due to the subsidiary. The future implementation in Luxembourg of the Organisation for Economic Co-operation and Development Base Erosion and Profit Sharing programme could impact the efficiency of this structure.	Over the year under review the Board engaged Ernst & Young LLP ('E&Y') to conduct a review of the Company's tax structure. This has ultimately led to the recommendation to shareholders to re-domicile the business of the Company to the UK.
Re-domiciling risk Having considered the advice of the Company's professional advisors the Board has decided put forward proposals to re-domicile the business of the Company. The most efficient way to do this is to transfer existing shareholdings and assets and liabilities across to a new UK company and place the existing company into a Jersey Summary Winding Up ('JSWU'). The proposals will be voted on by shareholders at the EGM in April 2017. There is a risk that shareholders do not vote in favour of the proposals. If shareholders do decide to vote in favour of the proposals, this will attract risk associated with the re-domiciling of the business of the Company.	If the proposals are not voted for in favour by the shareholders the Company would continue to exist in its current legal form. In this scenario the Company will be left with two independent non-executive directors and will need to recruit additional directors to ensure a good mix of skills and experience on the Board. The Directors have considered the redomiciling project including forecast costs and concluded that in the medium-term the new company will recover the costs associated with the transaction. The Directors concluded that re-domiciling the business of the Company is in the best interests of the Company and its shareholders. The Directors also considered the overall project management of the re-domiciliation. They are satisfied that their professional advisors have appropriate skills to ensure a smooth transition to the new UK company.	The Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due if the proposals are not voted for in favour. The Directors intend for the Company to continue to exist and do not envisage any other changes in strategy or objectives or any events that would prevent the Company from continuing to operate in the event that proposals are not passed. The Board would consider its options in this scenario and the Directors remain committed to their duties. A new company will be incorporated in anticipation of the proposals being passed by shareholders. The Directors have been working closely with its professional advisors and the new company directors to ensure a smooth transition. In addition Angus Macpherson will become Chairman of the Board and Ian Wright will become the Audit Committee Chairman of the new company, to ensure continuity.
Operational Disruption to, or the failure of Henderson or BNP Paribas Securities Services accounting, dealing, or payment systems, or the custodian's, depositary's or other counterparty records could prevent the accurate reporting or monitoring of the Company's financial position. BNP Paribas Securities Services S.C.A (Jersey) sub-contracts some of the operational functions (principally relating to trade processing, investment administration and accounting) to BNP Paribas Securities Services.	The Board has established an ongoing process for identifying, evaluating and managing any major risks faced by the Company. The process accords with advice issued by the Financial Reporting Council and is subject to regular review by the Board. The Board has overall responsibility for the Company's system of internal controls and for reviewing its effectiveness. However, such a system is designed to manage rather than eliminate risks of failure to achieve the Company's business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board has delegated responsibility to the depositary to appoint a custodian under the terms of the depositary agreement.	The Board has reviewed the effectiveness of the Company's system of internal controls for the year ended 31 October 2016. During the course of its review the Board has not identified or been advised of any failings or weaknesses that have been determined as significant. All business risks faced by the Company are recorded in a risk map which is reviewed periodically by the Audit Committee which also annually reviews the Company's third party service provider's assurance reports to provide comfort that these companies have appropriate controls in place to manage risk. The Board receives periodic reports from, and has meetings with, the depositary as appropriate.
Accounting, legal and regulatory The Company is regulated by the Jersey Financial Services Commission and must comply with the regulatory requirements in Jersey. The Company must comply with the provisions of the Companies (Jersey) Law 1991 and since its shares are listed on the London Stock Exchange, the UK Listing Authority ('UKLA') Rules. A breach of company law could result in the Company and/or the Directors being fined or the subject of criminal proceedings, all with the potential for financial and reputational damage. A breach of the UKLA Rules could result in the suspension of the Company's shares.	The Company's legal and regulatory obligations are delegated to its Corporate Secretary BNP Paribas Securities Services S.C.A Jersey Branch and are monitored by BNP Paribas Securities Services compliance function. The Board relies on its Corporate Secretary and advisors to ensure adherence to Jersey and UK Company Law and the UKLA Rules. However the responsibility to comply remains with the Board. BNP Paribas Securities Services actively and constructively engages with regulators, tax and industry bodies in order to understand and influence future developments.	The Board receives periodic reports from the Corporate Secretary. The Board receives periodic reports from the BNP Paribas Securities Services and Henderson compliance teams. The key legal and regulatory requirements are captured in a procedures manual which is subject to periodic testing by BNP Paribas Securities Services and Henderson.

The Board considers these risks to have remained unchanged during the year under review.

Viability statement

The Directors have assessed the viability of the Company taking account of the Company's current position and the potential impact of the principal risks and uncertainties documented in this Strategic Report.

In assessing viability, the Directors have considered the proposal to liquidate the Company in its current form, establish a new UK company and transfer the existing assets to the new UK company. The Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due until such date that the Company is put into liquidation and the restructure is implemented.

The Directors have also considered that if the proposal was not voted for in favour by the shareholders, the Company would continue to exist in its current legal form. Were this to be the case, then the Directors consider that a three year period would be an appropriate period over which they would not expect there to be any significant changes in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any other changes in strategy or objectives or any events that would prevent the Company from continuing to operate over that period.

The assessment has considered the impact of the likelihood of the principal risks and uncertainties facing the Company in severe but reasonable scenarios, and the effectiveness of any mitigating controls in place, over the relevant period.

The Directors also took into account the liquidity and maturity of the portfolio and the income stream from the portfolio in considering the viability of the Company and its ability to meet liabilities as they fall due. This included consideration of how the forecast income stream, expenditure and levels of reserves could impact on the Company's ability to pay dividends to shareholders over that period in line with its current dividend policy.

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the assessment period.

Borrowing

The Board has in place a loan facility which allows it to borrow up to £45.5 million (£30.5 million with an additional £15.0 million commitment being available) for periods of one, two, three or six months. The facility was renewed in August 2016. Borrowing is regularly reviewed by the Board. At 31 October 2016 the Company had drawn down £24.7 million (2015: £19.2 million). The maximum amount drawn down in the period was £30.4 million, with borrowing costs including interest for the year totalling £0.4 million. At 31 October 2016, the ratio of borrowings under the facility to net assets was 15.7% (2015: 13.2%).

Future developments

The Directors have put forward proposals to re-domicile the business of the Company to the UK by way of a scheme of reconstruction. Should the shareholders decide to not vote in favour of the proposals it is the Board's intention that the Company will continue to pursue its stated investment objective as set out above. Further commentary on the outlook for the Company can be found in the Chairman's Statement and the Fund Managers Report.

The future performance of the Company to continue in its current form will depend to some degree on macro-economic factors and on the performance of international financial markets, which in turn, are subject to many external factors.

REPORT OF THE DIRECTORS

Related party transactions

The Company's transactions with related parties in the year were with its Directors, its subsidiary and Henderson. The material transactions between the Company and its subsidiary during the year and the amount due from the subsidiary are given in Note 11 of the Annual Report. There have been no material transactions between the Company and its Directors during the year other than the amounts paid to them in respect of fees for which there were no outstanding amounts payable at the year end. In relation to the provision of services by Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services there have been no transactions with Henderson affecting the financial position of the Company during the year under review. More details on transactions with Henderson, including amounts outstanding at the year end, are given in Note 22 of the Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

Statement under DTR 4.1.12

Each of the Directors confirms that, to the best of his or her knowledge:

• the Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

• the Strategic Report, Report of the Directors, Directors' Remuneration Report, Corporate Governance Statement, Report of the Audit Committee and financial statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Ian Wright

Director

23 February 2017

Aggregated Income Statement

	Year ended 31 October 2016						Year ended 31 October 2015
	Revenue return £'000		Capital return £'000		Total return £'000		Revenue return £'000		Capital return £'000		Total return £'000
Gains/(losses) on investments held at fair value through profit or loss	-		24,740		24,740		-		(3,498)		(3,498)
(Losses)/gains on foreign exchange transactions at fair value through profit or loss	-		(21,730)		(21,730)		-		3,117		3,117
Investment income	10,355		-		10,355		9,320		-		9,320
Other operating income	4		-		4		2		-		2
Total income	10,359		3,010		13,369		9,322		(381)		8,941
Expenses Management and performance fees	(449)		(1,331)		(1,780)		(514)		(924)		(1,438)
Other expenses	(623)		-		(623)		(562)		-		(562)
Profit/(loss) before finance costs and taxation	9,287		1,679		10,966		8,246		(1,305)		6,941
Finance costs	(173)		(173)		(346)		(139)		(139)		(278)
Profit/(loss) before taxation	9,114		1,506		10,620		8,107		(1,444)		6,663
Taxation	(108)		-		(108)		(77)		-		(77)
Profit/(loss) for the year	9,006		1,506		10,512		8,030		(1,444)		6,586
Earnings/(loss) per ordinary share	5.37p		0.90p		6.27p		5.16p		(0.93)p		4.23p

The aggregated information is derived from the separate accounts of the Company and its subsidiary, individually prepared in accordance with the IFRS accounting policies and after eliminating intra group transactions and balances. This statement is supplemental to the financial statements and unaudited.

Aggregated Balance Sheet

	At 31 October                     2016 £'000		At 31 October 2015 £'000
Non current assets Investments designated at fair value through profit or loss	-		167,963
Current assets
Investments designated at fair value through profit or loss	183,170		-
Other receivables	4,485		4,756
Cash and cash equivalents	1,169		1,131
	188,824		5,887
Total assets	188,824		173,850
Current liabilities Other payables	(6,336)		(9,304)
Bank loan (net of issue costs)	(24,721)		(19,177)
Total assets less current liabilities	157,767		145,369
Net assets	157,767		145,369
Equity attributable to equity shareholders Stated capital	120,281		109,891
Distributable reserve	39,862		39,862
Retained earnings:
Other capital reserves	(6,174)		(7,683)
Revenue reserve	3,798		3,299
Total equity	157,767		145,369
Net asset value per ordinary share	89.71p		88.36p

The aggregated information is derived from the separate accounts of the Company and its subsidiary, individually prepared in accordance with the IFRS accounting policies and after eliminating intra group transactions and balances. This statement is supplemental to the financial statements and unaudited.

Company Income Statement

Notes		Year ended 31 October 2016						Year ended 31 October 2015
		Revenue return £'000		Capital return £'000		Total return £'000		Revenue return £'000		Capital return £'000		Total return £'000
	Gains/(losses) on investments held at fair value through profit or loss	-		18,807		18,807		-		(452)		(452)
	(Losses)/gains on foreign exchange transactions at fair value through profit or loss	-		(14,362)		(14,362)		-		1,338		1,338
3	Investment income	7,764		-		7,764		6,865		-		6,865
3	Investment income from subsidiary	1,061		-		1,061		1,088		-		1,088
4	Other operating income	2		-		2		1		-		1
	Total income	8,827		4,445		13,272		7,954		886		8,840
5	Expenses Management and performance fees	(449)		(1,331)		(1,780)		(514)		(924)		(1,438)
	Other expenses	(547)		-		(547)		(488)		-		(488)
	Profit/(loss) before finance costs and taxation	7,831		3,114		10,945		6,952		(38)		6,914
	Finance costs	(173)		(173)		(346)		(139)		(139)		(278)
	Profit/(loss) before taxation	7,658		2,941		10,599		6,813		(177)		6,636
	Taxation	(86)		-		(86)		(50)		-		(50)
	Profit/(loss) for the year	7,572		2,941		10,513		6,763		(177)		6,586
6	Earnings/(loss) per ordinary share	4.52p		1.75p		6.27p		4.34p		(0.11)p		4.23p

The total column of this statement represents the Company's Income Statement, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

All income is attributable to the equity shareholders of Henderson Diversified Income Limited.

The Company does not have any income or expenses that is not included in the profit for the year and therefore the 'profit for the year' is also 'total comprehensive income for the year'.

Company Statement of Changes in Equity

Notes	Year ended 31 October 2016		Stated capital £'000		Distributable reserve £'000			Other capital reserves £'000			Revenue reserve £'000		Total £'000
	Total equity at 31 October 2015		109,891			39,862			528		(4,912)		145,369
	Total comprehensive income:
	Profit from ordinary activities after taxation		-			-			2,941		7,572		10,513
7	Transactions with owners, recorded directly to equity:   Dividends paid		-			-			-		(8,505)		(8,505)
8	Issue of shares		10,390			-			-		-		10,390
	Total equity at 31 October 2016		120,281			39,862			3,469		(5,845)		157,767
Notes	Year ended 31 October 2015		Stated capital £'000	Distributable reserve £'000			Other capital reserves £'000				Revenue reserve £'000		Total £'000
	Total equity at 31 October 2014		87,847			39,862			705		(3,810)		124,604
	Total comprehensive income:
	(Loss)/profit from ordinary activities after    taxation		-			-			(177)		6,763		6,586
7	Transactions with owners, recorded directly to equity:   Dividends paid		-			-			-		(7,865)		(7,865)
8	Issue of shares		22,044			-			-		-		22,044
	Total equity at 31 October 2015		109,891			39,862			528		(4,912)		145,369

.

 

Company Balance Sheet

Notes		At 31 October 2016 £'000			At 31 October 2015 £'000
	Non current assets Investments designated at fair value through profit or loss	-			117,940
	Investment in subsidiary at fair value through profit or loss	-			44,598
					162,538
	Current assets
	Investments designated at fair value through profit or loss	134,367			-
	Investment in subsidiary at fair value through profit or loss	45,911			-
	Other receivables	4,291			4,095
	Cash and cash equivalents	951			350
		185,520			4,445
	Total assets	185,520			166,983
	Current liabilities Other payables	(3,032)			(2,437)
	Bank loan (net of issue costs)	(24,721)			(19,177)
	Total assets less current liabilities	157,767			145,369
	Net assets	157,767			145,369
8	Equity attributable to equity shareholders Stated capital	120,281			109,891
	Distributable reserve	39,862			39,862
	Retained earnings:
	Other capital reserves	3,469			528
	Revenue reserve	(5,845)			(4,912)
	Total equity	157,767			145,369
9	Net asset value per ordinary share	89.71p			88.36p

The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2017 and were signed on its behalf by:

Ian Duncan Wright                             Nigel Robert Parker

Director                                            Director

Company Cash Flow Statement

	At 31 October 2016 £'000		At 31 October 2015 £'000
Operating activities
Net profit before tax	10,599		6,636
Interest payable	346		278
(Gains)/losses on investments held at fair value through profit or loss	(18,807)		452
Losses/(gains) on foreign exchange transactions at fair value through profit or loss	14,362		(1,338)
Payments on settlement of forward foreign exchange contracts	(13,531)		-
Amortisation of loan expenses	-		10
Increase in prepayments and accrued income	(618)		(1,338)
Increase/(decrease) in other creditors	605		(355)
Purchases of investments	(78,471)		(97,956)
Sales of investments	79,011		60,999
Drawdown of loan to subsidiary	(22,050)		(12,850)
Repayments of loan to subsidiary	23,300		21,151
Interest from subsidiary	(1,061)		(1,088)
Decrease/(increase) in sales for settlement debtor	424		(414)
(Increase)/decrease in purchase settlement creditor	(503)		1,543
Net cash outflow from operating activities before finance costs	(6,394)		(24,270)
Interest paid	(346)		(278)
Taxation on investment income	(66)		(65)
Net cash outflow from operating activities	(6,806)		(24,613)
Financing activities
Equity dividends paid	(8,505)		(7,865)
Issue of ordinary shares	10,390		22,044
Net drawdown of loans	5,544		9,220
Net cash inflow from financing	7,429		23,399
Increase/(decrease) in cash and cash equivalents	623		(1,214)
Cash and cash equivalents at start of the year	350		482
Exchange movements	(22)		1,082
Cash and cash equivalents at the year end	951		350

Notes to the Financial Statements

1 General information

The entity is a closed-ended company, registered as a no par value company under the Companies (Jersey) Law 1991, with its shares listed on the London Stock Exchange.

The Company was incorporated on 5 June 2007.

As reported in the previous year these Company only financial statements have been presented because the Company is at present, assessed to meet the definition of an Investment Entity and accordingly it is prohibited from consolidating the subsidiary in order to produce International Financial Reporting Standard ('IFRS') compliant consolidated accounts.

2 Accounting policies

a) Basis of preparation

This financial information for the year ended 31 October 2016 has been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union. These comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ('IASC') that remain in effect, to the extent that IFRSs have been adopted by the European Union ('EU').

As announced in December 2016, the Directors will put forward to shareholders a proposal to place the Company into a Jersey Summary Winding Up ('JSWU') and transfer existing shareholdings and assets across to a new UK domiciled company. The proposals will be voted on by shareholders in April 2017. The Directors believe that shareholders will resolve to pass the appropriate resolutions to place the Company into a JSWU at this point. Therefore these financial statements have been prepared on a non-going concern basis.

The principal accounting policies adopted are set out below. Where consistent with IFRSs the financial statements have also been prepared in accordance with the guidance set out in the Statement of Recommended Practice ('SORP') for the Financial Statements of Investment Trust Companies and Venture Capital Trusts, issued in November 2014.

Standards, amendments and interpretations to existing standards that become effective in future accounting periods and have not been adopted by the Company are:

IFRS 9: Financial Instruments - Classification and Measurement (effective for annual financial periods beginning on or after 1 January 2018)

IFRS 15: Revenue from Contracts with Customers (effective for annual financial periods beginning on or after 1 January 2018)

The Directors do not expect that the adoption of these standards will have a material impact on the financial statements of the Company in future periods.

b) Application of IFRS 10 Consolidated Financial Statements ('IFRS 10')

From 1 January 2014 entities that meet the definition of an Investment Entity within IFRS 10 are required to account for most investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit or loss. Subsidiaries that provide investment related services or engage in permitted investment related activities continue to be consolidated. The criteria which define an Investment Entity are as follows:

• an entity that obtains funds from one or more investors for the purpose of providing those investors with investment management services;

• an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

• an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

Further narrow scope amendments were issued in December 2014, Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 Disclosures of Interests in Other Entities and IAS 28 Investments in Associates and Joint Ventures), to clarify the application of the standard in respect of Investment Entities. The amendments which clarify the initial standard are effective for annual periods beginning on or after 1 January 2016, with early application being permitted.

It was concluded in the previous year that the Company meets the definition of an Investment Entity and that the subsidiary should be excluded from consolidation to comply with IFRS 10. The Company has no other subsidiaries so it no longer prepares consolidated accounts. These accounts now represent Company only financial statements.

c) Significant accounting judgements and estimates

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the amounts recognised in the financial statements; however, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future. As the majority of the Company's financial assets are quoted securities, in the opinion of the Directors, the amounts included as assets and liabilities in the financial statements are not subject to significant judgements, estimates or assumptions other than explained below.

The Directors have considered that the financial statements should be prepared on a non-going concern basis. The costs anticipated with the liquidation and reconstruction are expected to total approximately £570,000. A significant proportion of these costs relate to the start up costs of the new UK company and only approximately £150,000 relate to the Company. It has therefore been considered that the costs associated directly with the Company are not material to the financial statements and no provision has been made in these financial statements for these costs. Any costs associated directly with the reconstruction will be charged to capital reserves.

The Directors consider that the proposed wind up of the Company has no material impact on the valuation of the Company's investments or other assets and liabilities and therefore the assets are measured in the Balance Sheet at fair value and liabilities are measured at amounts expected to be paid.

As the financial statements are prepared on a non-going concern basis, all assets and liabilities have been classified as current assets and liabilities in the current year.

d) Investments designated at fair value through profit or loss

All investments are designated upon initial recognition as held at fair value through profit or loss. This is consistent with the Company's investment strategy and fair value information about these investments is provided to the Board. Assets are recognised at the trade date of acquisition and are de-recognised at the trade date of the disposal. Proceeds will be measured at fair value, which is regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price at the Company Balance Sheet date, without deduction of the estimated future selling costs.

Fair value for quoted investments represents the bid-market value as at the close of business on the Company Balance Sheet date. Fair value for unquoted investments or where a market value is not readily available is based on Henderson's assessment of the value of the investment. Overseas investments are translated into sterling at the exchange rate ruling at the year end.

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

e) Interest in subsidiary

Interest in the subsidiary is accounted for at fair value through profit or loss. Fair value is estimated based on the fair value of the net assets held by the subsidiary adjusted where market evidence exists that a different value should be used such as a substantial discount or premium between the Company's share price and the aggregate net asset value of the Group.

3 Investment income

	2016 £'000		2015 £'000
Income from investments:
Dividend income	615		521
Bond and loan interest	6,972		5,991
Premiums on credit default swaps	177		353
	7,764		6,865
Investment income from subsidiary	1,061		1,088
	8,825		7,953

4 Other operating income

	2016 £'000		2015 £'000
Bank and other interest	2		1
	2		1

5 Management and performance fees

	2016						2015
	Revenue return £'000		Capital return £'000		Total return £'000		Revenue return £'000		Capital return £'000		Total return £'000
Investment management fee	449		449		898		514		514		1,028
Performance fee	-		882		882		-		410		410
	449		1,331		1,780		514		924		1,438

A summary of the terms of the management agreement is given in the Annual Report.

6 Earnings/(loss) per ordinary share

The earnings per ordinary share figure is based on the net profit for the year after taxation of £10.513 million (2015: profit of £6.586 million) and on 167,684,633 (2015: 155,631,014) being the weighted average number of ordinary shares in issue during the year.

The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below.

The Company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted earnings per ordinary share are the same.

	2016 £'000		2015 £'000
Net revenue profit	7,572		6,763
Net capital profit/(loss)	2,941		(177)
Net total profit	10,513		6,586
Weighted average number of ordinary shares in issue during the year	167,684,633		155,631,014
Revenue earnings per ordinary share	4.52p		4.34p
Capital earnings/(loss) per ordinary share	1.75p		(0.11)p
Total earnings per ordinary share	6.27p		4.23p

7 Dividends

Dividends on ordinary shares	Record date	Payment date	2016 £'000		2015 £'000
Fourth interim dividend - 1.35p	5 December 2014	31 December 2014	-		1,940
First interim dividend - 1.25p	6 March 2015	31 March 2015	-		1,909
Second interim dividend - 1.25p	5 June 2015	30 June 2015	-		2,002
Third interim dividend - 1.25p	4 September 2015	30 September 2015	-		2,014
Fourth interim dividend - 1.35p	4 December 2015	31 December 2015	2,247		-
First interim dividend - 1.25p	4 March 2016	31 March 2016	2,081		-
Second interim dividend - 1.25p	3 June 2016	30 June 2016	2,081		-
Third interim dividend - 1.25p	2 September 2016	30 September 2016	2,096		-
			8,505		7,865

The fourth interim dividend has not been included as a liability in these financial statements as it was announced and paid after 31 October 2016.

The table below sets out the total dividends paid and to be paid in respect of the financial year and previous year. The revenue available for distribution by way of dividend for the year is £7.572 million (2015: £6.763 million).

	2016 £'000		2015 £'000
First interim dividend for 2016 - 1.25p (2015: 1.25p)	2,081		1,909
Second interim dividend for 2016 - 1.25p (2015: 1.25p)	2,081		2,002
Third interim dividend for 2016 - 1.25p (2015: 1.25p)	2,096		2,014
Fourth interim dividend for 2016 - 1.35p (paid 31 December 2016 with a record date of 2 December 2016) (2015: 1.35p)	2,374		2,247
	8,632		8,172

8 Stated capital

	Authorised	2016					2015
		Issued and fully paid		£'000		Issued and fully paid		£'000
Ordinary shares of no par value Opening balance at 1 November	Unlimited	164,518,240		109,891		140,281,726		87,847
Issued during the year		11,350,000		10,390		24,236,514		22,044
Closing balance at 31 October		175,868,240		120,281		164,518,240		109,891

The holders of ordinary shares are entitled to all the capital growth in the Company and all the income from the Company that is resolved by the Directors to be distributed. Each shareholder present at a general meeting has one vote on a show of hands and on a poll every member present, in person or by proxy, has one vote for each share held.

During the year, the Company issued 11,350,000 (2015: 24,236,514) shares for proceeds of £10,390,000 (2015: £22,044,000) net of costs.

9 Net asset value per ordinary share

The net asset value per ordinary share is based on the net asset value attributable to ordinary shareholders at the 2016 year end of £157.767 million (2015: £145.369 million) and on 175,868,240 (2015: 164,518,240) ordinary shares, being the number of ordinary shares in issue at the year end.

10 Transactions with Henderson

Under the terms of an agreement effective from 22 July 2014 (which replaced the agreement dated 15 June 2007 in order to reflect the appointment of an Alternative Investment Fund Manager in accordance with the requirements of the Alternative Investment Fund Managers Directive), the Company has appointed wholly-owned subsidiaries of Henderson Group plc ('Henderson') to provide investment management services.

Details of the arrangements for these services are given in the Annual Report. The total of the fees paid or payable to Henderson under this agreement in respect of the year ended 31 October 2016 was £898,000 (2015: £1,028,000), of which £493,000 was outstanding at 31 October 2016 (2015: £350,000).

A performance fee is also payable to Henderson. The performance fee payable for the year ended 31 October 2016 amounted to £882,000 (excluding VAT) (2015: £410,000). This amount was outstanding at 31 October 2016 (2015: £410,000).

Henderson also provides the Company with sales and marketing services. The total fee payable for their services for the year ended 31 October 2016 amounted to £56,000 (2015: £66,500). As at 31 October 2016, £19,000 was outstanding (2015: £23,000).

11 Subsequent events

Since the year end the Company has issued 3,700,000 shares for net proceeds of £3,371,955. As at 23 February 2017, the total number of shares in issue is 179,568,240. The Directors have evaluated the period since the year end and have not noted any other subsequent events.

The fourth interim dividend of 1.35p per share for the year-ended 31 October 2016 was declared on 24 November 2016. The dividend was paid on 31 December 2016 to shareholders on the register as at 2 December 2016. The shares were quoted ex-dividend on 1 December 2016.

On 23 February 2017, a first interim dividend of 1.25p per share was declared for the year ending 31 October 2017. The dividend will be paid on 31 March 2017 to shareholders on the register as at 3 March 2017. The shares will be quoted ex-dividend on 2 March 2017.

On 5 December 2016 the Company announced its intention to re-domicile subject to the necessary shareholder approval being obtained.

12 Financial information 2016

The figures and financial information for the year ended 31 October 2016 are compiled from an extract of the latest financial statements and do not constitute statutory accounts. These accounts included the report of the auditors which was unqualified.

13 Financial information 2015

The figures and financial information for the year ended 31 October 2015 are compiled from an extract of the latest financial statements and do not constitute the statutory accounts for that year. The accounts included the report of the auditors which was unqualified.

14 Annual Report

The Annual Report will be posted to shareholders in March 2017 and copies will be available on the Company's website (www.hendersondiversifiedincome.com) or in hard copy format from the Company's registered office, Liberté House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY.

For further information please contact:

John Pattullo and Jenna Barnard

Fund Managers, Henderson Diversified Income Limited

Telephone: [phone]

James de Sausmarez

Director and Head of Investment Trusts, Henderson Global Investors

Telephone: [phone]

Sarah Gibbons-Cook

Investor Relations and PR Manager, Henderson Global Investors

Telephone: [phone]

Jeremy Hamon

BNP Paribas Securities Services S.C.A., Jersey Branch, Company Secretary

Telephone: [phone]

Henderson Diversified Income Limited has its registered office at Liberté House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and it is regulated by the Jersey Financial Services Commission.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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