Annual Financial Report

RNS Number : 9965N

Murray Income Trust PLC

09 September 2011

MURRAY INCOME TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

Highlights

- Total Dividend increased by 2.7% to 28.75p

- Net Asset Value Total Return +28.1%

- Share Price Total Return + 29.4%

1. CHAIRMAN'S STATEMENT

Performance

The year to the end of June 2011, your Company's financial year, continued the pattern of attractive returns seen in 2010. Overall, on a total return basis, the net asset value per share rose by 28.1%, the share price by 29.4% while the FTSE-All Share Index rose by 25.6%. As a result, the Company enjoyed good absolute returns as well as a pleasing degree of outperformance of its benchmark. In contrast to 2010, the bulk of the return was earned in the first half of the year, which saw a return of 21.4% compared with one of 5.5% in the second half. The NAV per share at the year end was, however, still 16.3% below its year-end peak in June 2007 although there has been a positive total return between those two dates, taking dividends into account, of 0.9%. The revenue account, which is discussed further below, saw considerable improvement for a number of reasons, so that earnings per share rose by 21.7%. This has enabled us to propose a final dividend of 12.25p which will give a full year dividend increase of 2.7%.

The last two years have seen a considerable improvement in profits world wide as corporate cost-cutting in response to the extreme events of 2008 came together with a recovery in demand. This has been the primary reason for the strength of equity markets, which have performed very well in the face of continuing problems in the economic and political environment. Your portfolio has itself performed well against this background, being largely characterised by companies with strong market positions and balance sheets and a low exposure to consumer cyclical and financial companies.

As mentioned above, the Company's revenue account improved by 21.7%. This was produced by a 7.6% increase in income from securities as companies felt secure and profitable enough to raise dividends. It was also helped by a large increase in income from option writing. This does carry within it the risk of damaging capital performance. However, our Managers have always been careful to integrate option writing with investment policy so that it has in fact helped to adjust portfolio structure while yielding a very helpful income. This policy has continued into the current year and is likely to remain a feature of the Company unless the pricing of options becomes unattractive. The Company also received £1.4million from HMRC, representing interest on VAT which the Company has now been refunded. This will not be a recurring source of income though we are grateful for it. This conjunction has enabled the Board to recommend a final dividend for 2010-11, covered by net revenue, of 12.25p per share. We have, however, been cautious in this recommendation because forecasts for the current year indicate that the level of earnings is not sustainable, principally because of the absence of VAT repayments. We expect at least to be able to maintain this level of total dividend and the pattern of payment throughout the year ending 30 June 2012. We are also keen to ensure that the quality of the portfolio and particularly its ability to grow dividends is not prejudiced by an over-emphasis on current yield.

The macro-economic and political concerns of the last two years haven't changed very much. The crisis of 2007-8 was principally caused by excess debt in the developed world held by households and an under-capitalised banking sector. The recent past has seen the household sector trying to reduce its indebtedness and the corporate sector continuing to accumulate funds with the result that government has come under extreme pressure as its indebtedness rises. This in its turn has caused investors to worry more about competitiveness because, at a national level, without it growth and the ability to service debt must be doubtful. The last year has seen national tensions rise considerably in Europe without convincing political solutions at the same time that the US has suffered from extreme paralysis of its political system leading to the farcical soap opera of the argument over the Federal government debt ceiling. The UK has remained a bystander, protected by its ability to devalue its currency but still with a slow rate of growth though an impressive rate of inflation which does mean that nominal growth of the economy is considerably higher than the interest rate on government borrowing.

Board and Management Changes

The composition of the Board was unchanged throughout the year under review.

During February 2011, Anne Richards, Aberdeen's Chief Investment Officer, stepped back from day to day responsibility for the Company. The Company will continue to be managed by Charles Luke with the support of the Manager's Pan European Equity Team. The Board wishes to thank Anne for her work on behalf of the Company and looks forward to continuing to work with Charles.

Annual General Meeting

The Annual General Meeting will be held at the Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow, G2 3NY on Tuesday, 25 October 2011 at 12.30 p.m. It is the Board's intention also to hold the 2012 Annual General Meeting in Glasgow.

As at previous AGMs, there will be a presentation by the Managers and an opportunity to meet the Directors over lunch following the AGM.

Outlook

The brief period since the year end has decisively ended the relative calm of equity markets. The Company's NAV is down 9.5% at the date of writing from the year end, and markets have become very neurotic. While this is certainly an indicator of an oversold position it isn't difficult to see what is worrying them. It is very unclear how the situation within the Eurozone will resolve itself. The one thing that is clear is that, whether in an organised or disorganised way, the creditors of the most indebted countries are going to lose, or have already lost, considerable sums of money. Whether the losers will be taxpayers, bondholders, convalescent commercial banks or the European Central Bank is not clear. Ultimately it will be a cost to the richer countries. It is also unclear whether competitiveness can be restored for the weaker economies without the collapse of the Euro, though the political capital invested in its survival makes this a longer-term worry. Meanwhile, both the US and the UK are struggling with slow growth and the political cost of it, expressed in riots in the UK and extreme levels of political vitriol in the US. Asia and the other major emerging markets present a rather more encouraging picture in which inflation tends to be the most concerning short-term problem. However their predisposition to mercantilist policies, especially in China, does slow down the rate of adjustment in the global economy. All these influences have raised the risk of an avoidable further recession in which policy responses are inadequate.

The corporate sector, through the equity market, continues to look like a relatively safe haven. In contrast to high quality bond markets it does offer current yield, whereas bond markets are priced at previously unseen low levels of yield more representative of an ongoing depression. However, corporate profits are high as a share of National Income and some decline in this proportion does seem likely. The brunt of any shift seems likely to be taken by cyclical companies and banks. An aggregation of our portfolio produces an estimated long-term growth rate in corporate earnings of 8%, significantly ahead of likely economic growth and a similar growth rate for dividends. In a world in which uncertainties seem greater than usual this strength continues to give us confidence in the prospects for your Company.

Patrick Gifford

Chairman

9 September 2011

2. MANAGER'S REVIEW

Background

The UK equity market performed very strongly during the year to the end of June 2011, despite the ever-present influence of a series of dark clouds on the economic landscape. The FTSE All-Share Index rose by 25.6% on a total return basis, building on the significant gain of 21.1% during the prior year. The majority of returns were generated during the first half of the period. Improving economic conditions and additional stimulus in the United States, coupled with robust company results benefiting from improved operating leverage, helped to drive the market forward. Progress was slower and the market more volatile in the second half as European sovereign debt risk, the Japanese earthquake and tsunami, a faltering US economy and policy tightening in China focused investors' attention on the significant hurdles still facing the global economy.

The UK economy continued its slow passage of rebalancing towards net exports and away from consumption. From an economic growth perspective, the UK maintained its recovery in the third quarter of 2010 with GDP growth ahead of expectations. However, the underlying pace of growth subsequently deteriorated over the remainder of the period as momentum faded, leading to expectations for GDP growth in 2011 and 2012 to be downgraded by the IMF to 1.5% and 2.3% respectively. As a touchstone for the period of fiscal consolidation and pressure on household budgets, consumer confidence deteriorated and housing data remained weak, with little sign of an improvement in mortgage approvals. Unhelpfully, inflation remained stubbornly above the Bank of England's target level of 2.0% reaching a high point of 4.5% in April and May, as measured by CPI. The Monetary Policy Committee (MPC) remains relatively sanguine that the level of spare capacity in the economy will return inflation to its target. This is to some extent validated by wage settlements and average earnings increasing in a muted manner. As a consequence interest rates, that remained unchanged throughout the year at 0.5%, are likely to be kept on hold into 2012.

Economic growth outside the UK was generally encouraging, albeit regionally uneven over the second half of 2010. However, 2011 heralded a more difficult period. GDP growth in the United States slowed and expectations were downgraded following a series of weak data releases. In the Euro area, Greece, Portugal and Ireland all required rescue packages with Germany, in particular, helping to offset the weakness in these peripheral nations. The Japanese economy was derailed by the tragic earthquake and tsunami and although the recovery has begun it is still too early to determine the pace of reconstruction. Emerging markets, which now account for around two thirds of global growth continued to perform relatively well, although the pace of growth was tempered by monetary policy tightening in a number of countries, including China, to counter rising asset price and consumer inflation.

Performance

The Company generated a positive net asset value per share total return of 28.1% in the year ended 30 June 2011, compared to a rise in the FTSE All-Share Index of 25.6%, an encouraging result on an absolute and relative basis. On a total return basis, the Company's share price increased by 29.4%, which reflected a small narrowing of the discount to Net Asset Value at which the shares traded over the year.

On a gross assets basis, the portfolio outperformed the benchmark, with the gearing effect adding to this outperformance on a net asset basis. During the autumn, the Company increased its borrowings to £45m from £35m but subsequently reduced this to £40m in February given the policy to provide cover for potential put option assignments with a committed facility rather than holding cash. The actual level of gearing was maintained in a range between 5%-10% for the majority of the year.

Companies exposed to global growth and in particular, Emerging Markets growth tended to perform well. As a consequence, across the market, the Engineering, Mining and General Industrials sectors outperformed. In contrast, the more defensive areas, such as Pharmaceuticals and Food Retailers underperformed. Oil and Gas Producers performed very strongly due mostly to the recovery in the share price of BP as it brought the Macondo well under control and liabilities arising from the disaster proved to be lower than originally feared.

From a size perspective, the Mid Cap Index outperformed both the Small Cap and FTSE 100 Indices, a function of elevated risk appetite and many of the Mid Cap Index's constituents' exposure to growth overseas.

The Company benefited, in asset allocation terms, from its underweight position in Financials, Oil and Gas, and overweight position in Consumer Goods. Stock selection was generally positive, but particularly so in Financials.

In the Financials sector we continued to benefit from being underweight in banks given our concerns regarding the regulatory backdrop, prospects for growth and asset quality, coupled with the miserly dividends available. We also benefited from an overweight position in life insurance as both Aviva and Prudential performed strongly over the year. For the second year in a row, our underweight position in Mining was the most significant detractor of performance from an asset allocation viewpoint. We remain underweight for three key reasons: we have concerns about the quality of various companies within the sector; the dividend yields available are comparatively poor; and, finally, we believe that many of the companies do not at present represent attractive value given the challenging backdrop.

From a stock specific standpoint, our holdings in Wood Group, Weir and GKN all more than doubled during the year. The rebound in oil and gas exploration and production investment benefited Weir and Wood Group (which also sold its Well Support Services division to General Electric). GKN's performance was driven by strong demand for cars in Emerging Markets and good progress on margins. On the other hand, there were a number of holdings that detracted from performance. Most notably, Mothercare suffered from the weakness in domestic consumer spending which led to a series of earnings disappointments. However, we continue to maintain faith in the company given its strong balance sheet and attractive, low capital intensive international growth plans.

Performance Attribution for the year to 30 June 2011

	2011
	%
Net asset value total return for year per Ordinary share	28.1
FTSE All-Share Index total return	25.6
	________
Relative return	2.5
	________

Stock selection (equities)	%
Oil & Gas	0.4
Basic Materials	0.3
Industrials	0.2
Consumer Goods	0.2
Health Care	(0.2)
Consumer Services	-
Telecommunications	0.1
Utilities	(0.4)
Technology	-
Financials	0.7
	________
Total stock selection (equities)	1.3
	________

Asset allocation (equities)
Oil & Gas	0.2
Basic Materials	(1.1)
Industrials	(0.6)
Consumer Goods	0.5
Health Care	-
Consumer Services	(0.4)
Telecommunications	(0.1)
Utilities	(0.2)
Technology	(0.1)
Financials	2.0
	________
Total asset allocation (equities)	0.2
	________

	%
Fixed Income & Options	0.6
Cash	(1.9)
Gearing	2.6
Administrative expenses	(0.2)
Management fees	(0.7)
Recoverable VAT	0.9
Tax charge	(0.1)
Residual effect	(0.2)
	________
Total	2.5
	________

Sources : Aberdeen Asset Management, Mellon & Factset
Notes: Stock Selection - measures the effect of equity selection relative to the benchmark. Asset Allocation - measures the impact of over or underweighting each industry basket in the equity portfolio, relative to the benchmark weights. Non-equity Investments & Options effect - measures the impact on relative returns of the two asset categories. Gearing & cash effect - measures the impact on relative returns of net borrowings. Management fees & other expenses - these reduce total assets and therefore reduce performance. The effect is calculated by dividing expenses incurred during the year by average total assets less current liabilities. Residual effect - this arises as a result of the different methodologies for calculating performance between the NAV total return, the benchmark provider Factset and the performance attribution system.

Portfolio Activity and Structure

As in previous periods, we continued to add to high-quality, generally larger companies, with strong cash flows and robust balance sheets, which we believe will be able to prosper in an environment where economic growth is likely to be uneven and the prospect of future shocks remain a possibility. This included additions to Unilever, Roche, Pearson and Tesco. These were funded mostly through the reduction of cyclical holdings that had performed well and looked relatively expensive, together with an increase in gearing. Reductions to holdings were mostly achieved through the assignment of put options and included Amec, BBA, Weir, GKN, Millennium & Copthorne and Whitbread.

There were no complete sales during the period. However, we did introduce three new holdings. Two of these new holdings are non-UK companies, chosen for their ability to diversify risk, improve the quality of the portfolio, as well as enhance the revenue account. The first new holding, GDF Suez, is the international utility formed from the merger of Gaz De France and Suez in 2008. The company offers an attractive and efficient mix of upstream and downstream activities with good international growth prospects. The balance sheet is strong and the shares provide a dividend yield above 6%. The second new holding was Nordea, a Scandinavian bank that benefits from the robust macro-economic footing of its Nordic end-markets, high market shares, a strong capital base and a conservative management style. Finally, we initiated a new holding in Compass, a global food service and contract catering company. It provides a reliable earnings stream with the prospect of structural growth as outsourcing continues to gather pace. The company has a strong balance sheet and a healthy dividend yield, and should deliver attractive earnings growth aided by incremental margin expansion.

From an income-oriented perspective, we decided against rolling over our reverse convertibles (which expired during the period) as their benefits can now be replicated more efficiently by writing options. The income from writing options accounted for just under 10% of total income. Although we are very wary of becoming overly dependent on option income, we feel that the strategy has been of benefit to the Company by increasing the level of income generated and providing a good discipline for managing our exposure to individual holdings.

The actions above have marginally altered the sector positioning of the Company. The weighting in the Oil and Gas sector has increased slightly over the year as the BP share price recovered and our oil services companies performed well. The lower exposure to Industrials is principally due to the reduction in Weir and GKN despite the strong relative performance of the sector. The weight in the Healthcare sector increased as we added to our holding in Roche. Finally, the exposure to Financials decreased over the year, a function of the underperformance of the sector despite the addition of Nordea to the portfolio.

Income

For the financial year ended 30 June 2011, the Company has witnessed a significant rise in the level of income generated, with the revenue return per share increasing from 25.4p to 30.9p, or by 21.7%. This is due to the increase in option income, the VAT interest rebate, a rise in gearing and good underlying dividend growth from the holdings. As the VAT interest rebate income will not be repeated during the current year, it is likely that dividend cover will fall. We continue to keep a very close watch on the revenue account and are relatively comfortable with the income generating characteristics of the underlying portfolio as we remain focused on those companies that will be able to grow their dividends over the longer term.

The outlook for income generation has improved considerably over the last couple of years. Although we remain concerned about the prospect for negative earnings shocks and hence dividend disappointments, we are reassured that corporate balance sheets are generally strong and payout ratios low which bode well for dividend delivery. It is worth noting that market dividends, in aggregate, as reflected by the FTSE All-Share Index, are at present expected to increase by over 10% per annum in both the financial years 2012 and 2013.

Outlook

The two months since the period end have witnessed a broad recognition that the rebound in growth has disappointed. Thus the concerns regarding the sustainability of elevated developed market debt, and the resulting structural adjustments necessary to address this, have become even more important. This has been compounded by fears that in both Europe and the US, the political process and will to provide a credible solution to these issues is lacking, with this opaque policy response heightening the general level of uncertainty. This uncertainty and muted growth outlook have been manifested in significant market falls and increased volatility as it becomes clear that the challenges ahead remain considerable.

For companies, the outlook is less gloomy, and the corporate world at least retains an air of confidence with, in many cases, strong balance sheets, a slow return to capital investment projects and the remaining benefits from cost-cutting programmes over the last couple of years feeding through to rising profitability. In addition, despite the deterioration in the macro economic growth outlook, valuations do not look particularly stretched at all on an absolute or relative basis. Volatility is likely to remain a feature of the markets, as investors overreact to both good and bad news. However, although growth is likely to remain considerably weaker than we might like, the portfolio maintains its exposure to good-quality companies. Indeed, we remain clear in our focus on those companies supported by robust financing and with competitive positions that help protect against the challenges ahead. We continue to believe that these company attributes are the best way to ensure good long-term performance and sound dividend growth.

Charles Luke

Aberdeen Asset Managers Limited

Investment Manager

9 September 2011

3. REVIEW OF BUSINESS

A review of the Company's activities is given in the Chairman's Statement and the Manager's Review. This includes a review of the business of the Company and its principal activities, and likely future developments of the business.

Investment Objective

The Company's investment objective is to achieve a high and growing income combined with capital growth through investment in a portfolio principally of UK equities.

Benchmark

The Company's benchmark is the FTSE All-Share Index.

Investment Policy

In pursuit of the Company's objective, the Company's investment policy is to invest in the shares of companies that have potential for real earnings and dividend growth, while at the same time providing an above-average portfolio yield. The emphasis is on the management of risk and on the absolute return from the portfolio, which is achieved by ensuring an appropriate diversification of stocks and sectors, with a high proportion of its assets in strong, well-known companies. The Company makes use of low-cost, flexible borrowing facilities to enhance shareholder returns when appropriate.

The Company maintains a highly-diversified portfolio of investments, typically comprising between 30 and 70 holdings (but without restricting the Company from holding a more or less concentrated portfolio from time to time). The Company is unconstrained as to the market sectors in which it may invest.

The Company may invest up to 100% of its gross assets in UK-listed equities and other securities and is permitted to invest up to 20% of its gross assets in other overseas listed equities and securities. The Company invests primarily in the equity securities of large, well-known UK and overseas companies with an emphasis on investing in quality companies with good management, strong cash flow and a sound balance sheet, and which are generating a reliable earnings stream.

The Company may use derivatives for the purpose of enhancing portfolio returns and for hedging purposes in a manner consistent with the Company's broader investment policy.

It is the Company's policy to invest no more than 15 per cent of its gross assets in other listed investment companies (including investment trusts). The Company complies with Section 1158 of the Corporation Tax Act 2010 and does not invest more than 15% of its assets in the shares of any one company.

The Board is responsible for setting the gearing policy of the Company and for the limits on gearing. The Manager is responsible for gearing within the limits set by the Board. The Board has set its gearing limit at a maximum of 25% of Net Asset Value at the time of draw down. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy. Significant changes to gearing levels will be communicated to shareholders.

The Directors are responsible for determining the investment policy and the investment objective of the Company, while day-to-day management of the Company's assets has been delegated to Aberdeen Asset Managers Limited (the "Manager"). The Manager invests in a diversified range of UK and overseas companies, following a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value, concentrating on quality first, then price. Top-down investment factors are secondary in the Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights. The Manager is authorised to invest up to 15% of the Company's gross assets in any single stock. Currently, the top five holdings may not exceed 40% of the total value of the portfolio, and the top three sectors represented in the portfolio may not exceed 50%. The Manager is permitted to invest in options and in structured products, provided that any structured product issued in the form of a note or bond has a minimum credit rating of "A".

A detailed description of the investment process and risk controls employed by the Manager is set out in the Annual Report. The portfolio at the year end and its analysis is set out in the Annual Report (the top 20 holdings appear at the end of this Annual Financial Report). At the year end the Company's portfolio consisted of 44 holdings (including one fixed-interest security).

Capital Structure

The Company's issued share capital as at 30 June 2011 consisted of 64,689,458 Ordinary shares of 25p and 1,727,000 Ordinary shares held in treasury. At 9 September 2011, these numbers were unchanged.

Total Assets and Net Asset Value

At 30 June 2011, the Company had Total Assets of £474.4m and a Net Asset Value per Ordinary share of 671.5p.

Borrowings and Borrowing Covenants

The borrowings at 30 June 2011 of £40 million represent 9.2% of Net Assets. Borrowing facilities of £60 million are committed to the Company until 29 September 2011. Financial covenants contained within the loan agreement provide, inter alia, that borrowings shall at no time exceed 30% of Net Assets, and that the Net Assets must exceed £225 million. The Net Assets were £434.4 million at 30 June 2011. If any of the financial covenants are breached, the lender is entitled, following the serving of notice to the Company, to declare the loans and all accrued interest, fees and other sums owed under the agreements to be immediately due and repayable. Please refer also to the statement of Going Concern in the Annual Report.

Duration

The Company does not have a fixed life.

Risk

Equity markets are volatile, and short-term movements may therefore be greater than justified by longer-term trends. The use of gearing is likely to lead to an increase in the volatility of the Company's Net Asset Value. Currently, 50% of the investment management fees and interest costs are charged to capital. This increases distributable income at the expense of capital growth, which will be reduced to the same extent. The policy of investing in higher-yielding shares may also diminish capital growth. There is no guarantee that the market price of investment trust shares will accurately reflect their underlying Net Asset Value or move in line with it. More detailed information is available in note 17 to the financial statements.

Oversight and Review of Performance

The Board meets at least five times a year to review performance with the Manager. As well as carrying out the matters set out in the Statement of Corporate Governance in the Annual Report, the Board receives, for each meeting, a detailed portfolio report and an analysis of economic indicators, and discusses performance and strategy, considering perceived risks and economic conditions. It uses measures such as attribution analysis against the benchmark, active weights and valuation matrices to assess the Company's success in achieving its objectives. The key performance indicators are established industry measures, and are as follows:

- Net asset value (total return) relative to the Company's benchmark

- Share price (total return)

- Discount to net asset value

- Performance attribution

- Earnings and dividends per share.

A historical record of these measures (except performance attribution) is disclosed in Section 5 below. We compare our performance with the Company's benchmark and selected peer companies. A range of comparator groups are used, including the AIC UK Growth & Income peer group and the Open-Ended UK Equity Income peer group.

Management of Risk

The Board regularly reviews the major strategic risks that the Board and the Manager have identified, and against these the Board sets out the delegated controls designed to manage those risks. The principal risks facing the Company relate to the Company's investment activities and include market price, interest rate, liquidity and credit risk. An explanation of these risks and how they are managed is contained in note 17 to the financial statements. Such key risks relating to investment and strategy as, for example, inappropriate asset allocation or gearing, are managed through investment policy guidelines and restrictions, and by the process of oversight at each Board meeting outlined above. Operational disruption, accounting and legal risks are also covered annually, and regulatory compliance is reviewed at each Board meeting. The major risks associated with the Company are:

- Resource risk - like most other investment trusts, the Company has no employees. The Company therefore relies on services provided by third parties, including, in particular, the Manager, to whom responsibility for the management of the Company has been delegated under an investment management agreement (the "Agreement") (further details of which are set out in the Annual Report). The terms of the Agreement cover the necessary duties and conditions expected of the Manager. The Board reviews the performance of the Manager on a regular basis, and their compliance with the Agreement formally on an annual basis.

- Investment objective - the objective of the Company is to achieve a high and growing income combined with capital growth. As a consequence, the investment portfolio may not always match that of the stock market as a whole, with a consequential impact on shareholder returns. The Board's aim is to maximise absolute returns to shareholders while managing risk by ensuring an appropriate diversification of stocks and sectors.

- Investment policy and gearing - a major risk affecting the Company is inappropriate sector and stock selection leading to under-performance relative to the Company's benchmark index and peer group. In addition, the use of borrowing facilities to invest in markets may have a negative impact if markets fall. To mitigate these risks, the Manager operates within investment guidelines and agreed levels of borrowing. Performance against the benchmark index and the peer group is regularly monitored.

- Discount volatility - investment trust shares tend to trade at discounts to their underlying net asset values, although they can also trade at premia. Discounts and premia can fluctuate considerably. In order to seek to minimise the impact of such fluctuations, where the shares are trading at a discount, the Company has operated a share buy-back programme for a number of years. If the shares trade at a premium, the Company has the authority to issue new shares or re-issue shares from treasury. Whilst these measures seek to minimise volatility, it cannot be guaranteed that they will do so.

- Foreign currency risk - a proportion of the Company's investment portfolio is invested in overseas securities and the value of the Company's investments and the income derived from them can, therefore, be affected by movements in foreign exchange rates. In addition, the earnings of the Company's other investments may also be affected by currency movements which, indirectly, could have an impact on the Company's performance.

- Regulatory risk - the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 1158 of the Corporation Tax Act 2010 could result in the Company being subject to capital gains tax on the sale of its investments. Serious breach of other regulations, such as the UKLA Listing Rules and the Companies Act, could lead to suspension from the Stock Exchange and reputational damage. The Board receives monthly compliance reports from the Manager to monitor compliance with regulations.

Results and Dividends

The total return attributable to equity shareholders for the year amounted to £98,082,000.

A third interim dividend of 5.5p per Ordinary share was paid on 16 July 2010, and the final dividend for the year ended 30 June 2010 of 11.50p per Ordinary share was paid on 27 October 2010. The first and second interim dividends for the year ended 30 June 2011 of 5.5p per Ordinary share each were paid on 14 January 2011 and 15 April 2011 respectively, making a total distribution to Ordinary shareholders of £18,101,000 as shown in note 6. The third interim dividend of 5.5p per Ordinary share was paid on 15 July 2011.

The Directors now recommend a final dividend of 12.25p per Ordinary share payable on 26 October 2011 to holders of Ordinary shares on the register on 23 September 2011. The relevant ex-dividend date is 21 September 2011. A resolution in respect of the final dividend will be proposed at the forthcoming Annual General Meeting.

Dividends are paid by means of three interim dividends, normally in January, April, July, and a final, after the Annual General Meeting in October or November. Further information on dividends is contained in the Chairman's Statement and in note 20 to this Annual Financial Report.

4. 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 the law they have elected to prepare the financial statements in accordance with UK Accounting Standards. The financial statements are required by law to 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 judgments and 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

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

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report (including a Business Review), Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

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

- the Chairman's Statement, Manager's Review and Business Review contained within the Report of the Directors (together constituting the Management Report) 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; and

- the financial statements and the Directors' Report and Business Review include details on related party transactions.

For and on behalf of the Board of Murray Income Trust PLC

Humphrey van der Klugt

Chairman of the Audit Committee

9 September 2011

5. RESULTS

	30 June 2011	30 June 2010	% change
Total assets (£'000)	474,406	389,425	+21.8
Equity shareholders' interest (£'000)	434,406	354,425	+22.6
Net asset value per Ordinary share	671.5p	547.9p	+22.6
Share price of Ordinary share (mid)	659.5p	533.0p	+23.7
Discount to net asset value on Ordinary shares	1.8%	2.7%
Gearing (ratio of borrowing to shareholders' funds)
Actual gearing ratio	7.5%	-0.6%
Potential gearing ratio	9.2%	9.9%
Dividends and earnings
Revenue return per share	30.9p	25.4p	+21.7
Dividends per share{A}	28.75p	28.00p	+2.7
Dividend cover	1.07 times	0.91 times
Revenue reserves (£'000){B}	26,710	24,794
Operating costs
Total expense ratio	0.8%	0.8%
{A} The figures for dividends per share reflect the years in which they were earned (see note 6).
{B} The revenue reserve figure does not take account of the proposed third interim and final dividends amounting to £3,558,000 and £7,924,000 respectively (2010 - third interim and final dividends amounting to £3,558,000 and £7,439,000 respectively).

Performance (total return)

	1 year return	3 year return	5 year return
	%	%	%
Share price	+29.4	+41.5	+28.7
Net asset value per Ordinary share	+28.1	+26.0	+19.2
Source: Aberdeen Asset Management/Fundamental Data

Dividends

	Rate	xd date	Record date	Payment date
1st interim 2011	5.50p	15 December 2010	17 December 2010	14 January 2011
2nd interim 2011	5.50p	9 March 2011	11 March 2011	15 April 2011
3rd interim 2011	5.50p	8 June 2011	10 June 2011	15 July 2011
Proposed final 2011	12.25p	21 September 2011	23 September 2011	26 October 2011
Total dividends 2011	28.75p

Ten Year Financial Record

Year end 30 June	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011
Revenue (£'000)	15,384	16,041	16,827	16,533	17,237	19,251	22,390	19,790	18,257	21,844
	______	______	______	______	______	______	______	______	______	______
Per Ordinary share (p)
Net revenue return	18.0	18.7	19.6	20.0	21.8	24.7	29.3	28.1	25.4	30.9
Dividends	17.00	17.75	18.25	19.15	21.60	24.25	27.00	27.75	28.00	28.75
	______	______	______	______	______	______	______	______	______	______
Net asset value per Ordinary/B Ordinary share{A}	541.3 {B}	433.8	496.2	603.3	699.7	802.3	619.9	455.4	547.9	671.5
	______	______	______	______	______	______	______	______	______	______
Shareholders' funds (£'000)	380,035	304,529	345,138	404,601	456,714	522,617	400,536	294,570	354,425	434,406
	______	______	______	______	______	______	______	______	______	______

{A} All B Ordinary shares were converted to Ordinary shares during the year ended 30 June 2002.
{B} Net asset value per B Ordinary share has been calculated after deducting prior capital at nominal values and has been adjusted for the annual B Ordinary scrip issues.
Total revenue returns per Ordinary share have been based on the average number of Ordinary shares in issue during each year (see note 8).
The Net Asset Value figure for 2005 has been restated to reflect the changes in accounting policies (FRS 26 - 'Financial Instruments: Recognition and Measurement'; FRS 21 - 'Events after the Balance Sheet Date').
The figures for dividends reflect the dividends for the years in which they were earned.
Please note that past performance is not a guide to future performance.

MURRAY INCOME TRUST PLC

Income Statement

			Year ended 30 June 2011			Year ended 30 June 2010
			Revenue	Capital	Total	Revenue	Capital	Total
	Notes		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	9		-	78,910	78,910	-	62,285	62,285
Currency (losses)/gains			-	(10)	(10)	-	30	30
Income	2		21,844	-	21,844	18,257	-	18,257
Investment management fees	3		(1,110)	(1,110)	(2,220)	(988)	(988)	(1,976)
Administrative expenses	4		(859)	-	(859)	(879)	-	(879)
VAT recovered on investment management fee	3		734	742	1,476	409	409	818
			_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation			20,609	78,532	99,141	16,799	61,736	78,535

Finance costs of borrowing	5		(467)	(467)	(934)	(375)	(375)	(750)
			_______	_______	_______	_______	_______	_______
Net return on ordinary activities before taxation			20,142	78,065	98,207	16,424	61,361	77,785

Taxation on ordinary activities	7		(125)	-	(125)	-	-	-
			_______	_______	_______	_______	_______	_______
Net return on ordinary activities after taxation			20,017	78,065	98,082	16,424	61,361	77,785
			_______	_______	_______	_______	_______	_______

Return per Ordinary share (pence)	8		30.9	120.7	151.6	25.4	94.8	120.2
			_______	_______	_______	_______	_______	_______

The total column of this statement represents the profit and loss account of the Company.
The Company had no recognised gains or losses other than those recognised in the Income Statement.
No operations were acquired or discontinued in the year.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.


		£'000		£'000	£'000	£'000	£'000	£'000
Ordinary dividends on equity shares	6	18,101		-	18,101	17,930	-	17,930
		_______		_______	_______	_______	_______	_______

The above dividend information does not form part of the Income Statement.

MURRAY INCOME TRUST PLC

Balance Sheet

		As at	As at
		30 June 2011	30 June 2010
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	9	466,713	352,285
		___________	___________
Current assets
Loans and receivables	10	3,105	2,883
Cash and short term deposits		5,515	35,037
		___________	___________
		8,620	37,920
		___________	___________
Creditors: amounts falling due within one year
Other payables	11	(927)	(780)
Bank loans	11	(40,000)	(35,000)
		___________	___________
Net current (liabilities)/assets		(32,307)	2,140
		___________	___________
Net assets		434,406	354,425
		___________	___________
Share capital and reserves
Called-up share capital	12	16,604	16,604
Share premium account		7,955	7,955
Capital redemption reserve		4,997	4,997
Capital reserve	13	378,140	300,075
Revenue reserve	13	26,710	24,794
		___________	___________
Total equity shareholders' funds		434,406	354,425
		___________	___________

Net asset value per Ordinary share (pence):	14	671.5	547.9
		___________	___________

MURRAY INCOME TRUST PLC

Reconciliation of Movements in Shareholders' funds

For the year ended 30 June 2011
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2010	16,604	7,955	4,997	300,075	24,794	354,425
Return on ordinary activities after taxation	-	-	-	78,065	20,017	98,082
Dividends paid (see note 6)	-	-	-	-	(18,101)	(18,101)
	________	________	________	________	________	________
Balance at 30 June 2011	16,604	7,955	4,997	378,140	26,710	434,406
	________	________	________	________	________	________

For the year ended 30 June 2010
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2009	16,604	7,955	4,997	238,714	26,300	294,570
Return on ordinary activities after taxation	-	-	-	61,361	16,424	77,785
Dividends paid (see note 6)	-	-	-	-	(17,930)	(17,930)
	________	________	________	________	________	________
Balance at 30 June 2010	16,604	7,955	4,997	300,075	24,794	354,425
	________	________	________	________	________	________

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

MURRAY INCOME TRUST PLC

Cash Flow Statement

		Year ended		Year ended
		30 June 2011		30 June 2010
	Notes	£'000	£'000	£'000	£'000
Net cash inflow from operating activities	15		20,209		16,431

Servicing of finance
Interest paid			(1,045)		(569)

Taxation
Net tax paid			(204)		-

Financial investment
Purchases of investments		(85,311)		(55,940)
Sales of investments		49,940		79,487
		_______		_______
Net cash (outflow)/inflow from financial investment			(35,371)		23,547

Equity dividends paid	6		(18,101)		(17,930)
			_______		_______
Net cash (outflow)/inflow before financing			(34,512)		21,479

Financing
Drawdown of loan		5,000		-
		_______		_______
Net cash inflow from financing			5,000		-
			_______		_______
(Decrease)/increase in cash	16		(29,512)		21,479
			_______		_______

MURRAY INCOME TRUST PLC

Notes to the Financial Statements

Year Ended 30 June 2011

1.	Accounting policies
	(a)	Basis of preparation
		The financial statements have been prepared in accordance with the applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'.

		The Company adopted the extended disclosure requirements within FRS 29 for accounting periods beginning on or after 1 January 2009. The extended disclosure requirements introduced a fair value hierarchy and this is disclosed in note 18.

		The financial statements have also been prepared on the assumption that approval as an investment trust will continue to be granted.

	(b)	Income
		Dividends receivable on equity shares (other than special dividends) and convertibles 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. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to the circumstances.

		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities and shares.

		Interest receivable from cash and short-term deposits and interest payable is accrued to the end of the year.

	(c)	Expenses
		All expenses are accounted for on an accruals basis. All expenses are charged through the revenue column of the Income Statement except as follows:
		- transaction costs on the acquisition or disposal of investments are recognised as a capital item in the Income Statement.
		- expenses are charged to the capital reserve 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 50% to revenue and 50% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.

	(d)	Taxation
		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Balance Sheet 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 Balance Sheet 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 Balance Sheet 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 reserves and the revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year.

	(e)	Valuation of investments
		Investments have been designated upon initial recognition at fair value through profit or loss. 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 SETS (London Stock Exchange's electronic trading service) stocks sourced from the London Stock Exchange. Gains and losses arising from changes in fair value are included in the net return for the period as a capital item in the Income Statement and are ultimately recognised in the capital reserve. The valuation of reverse convertibles is carried out by the respective counterparty and is modelled on a long stock and short call basis taking account of implied volatility and including an accrual for yield.

	(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
		Interest-bearing bank loans and overdrafts are initially recognised at cost, being the fair value of the consideration received, net of any issue expenses. Finance charges are accounted for on an accruals basis using the effective interest rate method and are charged 50% to revenue and 50% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.

	(h)	Traded options
		The Company may enter into certain derivatives (eg options) to gain exposure to the market. The option contracts are accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair value ie market value adjusted for the amortisation of transaction expenses. The premium received and fair value changes in the open position are normally recognised in the revenue column of the Income Statement. However, where the option is written for the maintenance or enhancement of the Company's investments then the change in fair value is recognised in the capital column of the Income Statement.

	(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.

		2011	2010
2.	Income	£'000	£'000
	Income from investments
	UK dividends (all listed)	15,911	14,687
	Overseas dividends (all listed)	1,474	-
	Bond interest	565	1,976
	Stock dividends	147	163
		_________	_________
		18,097	16,826
		_________	_________
	Other income
	Interest from HMRC on VAT recovered	1,358
	Deposit interest	94	83
	Traded option premiums	2,132	1,234
	Underwriting commission	163	114
		_________	_________
		3,747	1,431
		_________	_________
	Total income	21,844	18,257
		_________	_________

	During the year, the Company received premiums totalling £2,132,000 (2010 - £1,234,000) in exchange for entering into derivative transactions. This includes a mark to market on derivative contracts. At the year end there were 15 open positions, valued at £306,000 (2010 - £352,000) and securities with a value of £3,211,000 (2010 - £2,232,000) were pledged as collateral against this.

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment management fees	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	1,110	1,110	2,220	988	988	1,976
		______	______	_____	______	______	______

	Details of the fee basis are contained in the Annual Report.

	On 5 November 2007, the European Court of Justice ruled that management fees on investment trusts should be exempt from VAT.

	The VAT charged on the investment management fees has been refunded in stages. The Manager refunded £1,556,000 for the period 1 January 2004 to 31 August 2007 included in the financial statements for the year ended 30 June 2009. The Manager refunded £818,000 for the period 1 January 2001 to 31 December 2003, included in the financial statements for the year ended 30 June 2010. In addition a further £1,476,000 has been refunded by the Manager in the current year, with £1,177,000 being received in respect of the period 1 January 1990 to 31 December 1996 and £299,000 being received in respect of the period 1 January 2001 to 31 December 2003. These repayments have been allocated to capital and revenue in line with the accounting policy of the Company for the periods in which the VAT was charged.

	In addition, an amount of £1,358,000 in respect of interest on the above settled claims has been included in the current year's financial statements and credited wholly to revenue.

		2011	2010
4.	Administrative expenses	£'000	£'000
	Shareholders' services{A}	358	392
	Irrecoverable VAT	81	86
	Directors' remuneration	114	106
	Secretarial fees	75	75
	Auditor's remuneration:
	Fees payable to the Company's auditor for the audit of the Company's annual accounts	19	21
	Other expenses	212	199
		_________	_________
		859	879
		_________	_________

	{A} Includes registration, savings scheme and other wrapper administration and promotion expenses, of which £291,000 (2010 - £294,000) was paid to Aberdeen Asset Managers Limited (AAM) to cover marketing activities during the year. There was £73,000 (2010 - £nil) due to AAM in respect of these marketing activities at the year end.

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Finance costs of borrowing	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdrafts	467	467	934	375	375	750
		______	______	_____	______	______	______

		2011	2010
6.	Ordinary dividends on equity shares	£'000	£'000
	Third interim 2010 of 5.50p (2009 - 5.50p)	3,558	3,558
	Final 2010 of 11.50p (2009 - 11.25p)	7,439	7,278
	First interim 2011 of 5.50p (2010 - 5.50p)	3,558	3,558
	Second interim 2011 of 5.50p (2010 - 5.50p)	3,558	3,558
	Return of unclaimed dividends	(12)	(22)
		_________	_________
		18,101	17,930
		_________	_________

	The third interim and proposed final dividends for 2011 have not been included as a liability in these financial statements as they were not payable until after the balance sheet date. The proposed final dividend for 2011 is subject to approval by shareholders at the Annual General Meeting.

	We set out below 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 £20,017,000 (2010 - £16,424,000).

		2011	2010
		£'000	£'000
	Three interim dividends of 5.50p each (2010 - 5.50p)	10,674	10,674
	Proposed final dividend of 12.25p (2010 - 11.50p)	7,924	7,439
		_________	_________
		18,598	18,113
		_________	_________

			2011			2010
			Revenue	Capital	Total	Revenue		Capital		Total
7.	Taxation		£'000	£'000	£'000	£'000		£'000		£'000
	(a)	Analysis of charge for the year
		Overseas tax suffered	204	-	204	-		-		-
		Overseas tax reclaimable	(79)	-	(79)	-		-		-
			______	______	_____	______		______		______
		Current tax charge for the year	125	-	125	-		-		-
			______	______	_____	______		______		______

	(b)	Factors affecting the tax charge for the year
		The tax assessed for the year is lower than the effective rate of corporation tax rate of 27.5% (2010 - 28%). The differences are explained below:

			2011			2010
			Revenue	Capital	Total	Revenue	Capital		Total
			£'000	£'000	£'000	£'000	£'000		£'000
		Net profit on ordinary activities before taxation	20,142	78,065	98,207	16,424	61,361		77,785

		Return on ordinary activities multiplied by the effective rate of corporation tax of 27.5% (2010 - 28%)	5,539	21,468	27,007	4,599	17,181		21,780
		Effects of:
		Non-taxable UK dividends	(4,282)	-	(4,282)	(3,987)	-		(3,987)
		Non-taxable stock dividends	(40)	-	(40)	(46)	-		(46)
		Non-taxable overseas dividends	(405)	-	(405)	(39)	-		(39)
		Movement in income accruals taxable on receipt	(1)	-	(1)	(2)	-		(2)
		Movement in unutilised loan relationships	(129)	129	-	(471)	105		(366)
		Movement in unutilised management expenses	(682)	101	(581)	(54)	162		108
		Other capital returns	-	(21,698)	(21,698)	-	(17,448)		(17,448)
		Overseas tax irrecoverable	125	-	125	-	-		-
			______	______	_____	______	______		______
		Current tax charge	125	-	125	-	-		-
			______	______	_____	______	______		______

	(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 £46,827,000 (2010 - £48,939,000). A deferred tax asset in respect of this 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.

		2011		2010
8.	Return per Ordinary share	£'000	p	£'000	p
	Returns are based on the following figures:
	Revenue return	20,017	30.9	16,424	25.4
	Capital return	78,065	120.7	61,361	94.8
		_______	_______	_______	_______
	Total return	98,082	151.6	77,785	120.2
		_______	_______	_______	_______
	Weighted average number of Ordinary shares in issue		64,689,458		64,689,458
			_________		_________

		2011	2010
9.	Investments	£'000	£'000
	Held at fair value through profit or loss:
	Opening valuation	352,285	313,384
	Opening investment holdings (gains)/losses	(44,688)	25,201
		_________	_________
	Opening book cost	307,597	338,585
	Movements during the year:
	Purchases at cost	85,458	56,103
	Sales - proceeds	(49,940)	(79,487)
	Sales - gains/(losses)	14,279	(7,604)
		_________	_________
	Closing book cost	357,394	307,597
	Closing investment holdings gains	109,319	44,688
		_________	_________
	Closing valuation	466,713	352,285
		_________	_________

		2011	2010
	The portfolio valuation:	£'000	£'000
	UK equities	430,325	339,919
	Overseas equities	34,386	-
	UK convertible securities	-	10,387
	UK fixed interest	2,002	1,979
		_________	_________
	Total	466,713	352,285
		_________	_________

		2011	2010
	Gains on investments	£'000	£'000
	Gains/(losses) based on book cost	14,279	(7,604)
	Net movement in investment holdings gains	64,631	69,889
		_________	_________
		78,910	62,285
		_________	_________

	As at 30 June 2011, the Company had pledged collateral greater than the market value of the traded options in accordance with standard commercial practice. The carrying amount of financial assets pledged equated to £3,211,000, all in the form of securities. The collateral position is monitored on a daily basis, which then determines if further assets are required to be pledged over and above those already pledged.

	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 Income Statement. The total costs were as follows:
		2011	2010
		£'000	£'000
	Purchases	364	218
	Sales	40	58
		_________	_________
		404	276
		_________	_________

		2011	2010
10.	Loans and receivables	£'000	£'000
	Prepayments and accrued income	3,105	2,883
		_________	_________

		2011	2010
11.	Creditors: amounts falling due within one year	£'000	£'000
	Accruals	927	780
	Bank loans	40,000	35,000
		_________	_________
		40,927	35,780
		_________	_________

	Accruals include £397,000 (2010 - £161,000 plus VAT) of management fees and secretarial fees due to Aberdeen Asset Managers Limited, the Investment Manager and 15 open option positions having a value of £306,000 (2010: £352,000). The option positions have been fair valued in accordance with accounting policy note 1(h).

	At 30 June 2011 the Company had drawn down £40,000,000 (30 June 2010 - £35,000,000 drawn down of a £45,000,000 revolving bank credit facility with Lloyds Banking Group) of a £60,000,000 revolving bank credit facility with Santander Corporate Banking. 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. Interest is charged at a variable rate based on LIBOR plus a margin of 1.30% for the relevant period of the advance. As at 30 June 2011 this rate was 1.92840% (30 June 2010 - 2.21184%) and the loan matured on 11 July 2011.

	On 12 August 2011 the Company had drawn down £45,000,000 of the facility, at an all-in interest rate of 1.9927% until maturity on 29 September 2011.

	Financial covenants contained within the loan agreement provide, inter alia, that borrowings shall at no time exceed 30% of net assets and that net assets must exceed £225 million. All financial covenants were met during the year and also during the period from the year end to the date of this report.

		2011		2010
12.	Called-up share capital	Shares	£'000	Shares	£'000
	Authorised
	Ordinary shares of 25p each	102,842,000	25,710	102,842,000	25,710
		_________	________	_________	________
	Allotted, called-up and fully-paid
	Ordinary shares of 25p each: publicly held	64,689,458	16,172	64,689,458	16,172
	Ordinary shares of 25p each: held in treasury	1,727,000	432	1,727,000	432
		_________	________	_________	________
		66,416,458	16,604	66,416,458	16,604
		_________	________	_________	________

	During the year there were no Ordinary shares repurchased (2010 - nil), and no treasury shares cancelled (2010 - nil).

		2011	2010
13.	Retained earnings	£'000	£'000
	Capital reserve
	At 30 June 2010	300,075	238,714
	Movement in investment holding gains	64,631	69,889
	Gains/(losses) on realisation of investments at fair value	14,279	(7,604)
	Currency (losses)/gains	(10)	30
	Finance costs of bank loan	(467)	(375)
	Investment management fees	(1,110)	(988)
	VAT recovered on investment management fees{A}	742	409
		_________	_________
	At 30 June 2011	378,140	300,075
	{A} see note 3 for details of repayments.	_________	_________

	Revenue reserve
		2011	2010
		£'000	£'000
	At 30 June 2010	24,794	26,300
	Revenue	20,017	16,424
	Dividends paid	(18,101)	(17,930)
		_________	_________
	At 30 June 2011	26,710	24,794
		_________	_________

14.	Net asset value per share
	The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year end were as follows:

		2011	2010
	Net asset value attributable (£'000)	434,406	354,425
	Number of Ordinary shares in issue (note 12)	64,689,458	64,689,458
	Net asset value per share (p)	671.5	547.9

15.	Reconciliation of net return before finance costs and	2011	2010
	taxation to net cash inflow from operating activities	£'000	£'000
	Net return before finance costs and taxation	99,141	78,535
	Adjustments for:
	Gains on investments	(78,910)	(62,285)
	Currency losses/(gains)	10	(30)
	Non cash stock dividend	(147)	(163)
	Increase in accrued income	(142)	(7)
	(Increase)/decrease in other debtors	(1)	39
	Increase in accruals	258	342
		_________	_________
	Net cash inflow from operating activities	20,209	16,431
		_________	_________

		At			At
		1 July 2010	Cash flows	Currency losses	30 June 2011
16.	Analysis of changes in net debt	£'000	£'000	£'000	£'000
	Net cash:
	Cash	35,037	(29,512)	(10)	5,515
	Debt:
	Debt due within one year	(35,000)	(5,000)	-	(40,000)
		_________	_________	_________	_________
	Net debt	37	(34,512)	(10)	(34,485)
		_________	_________	_________	_________

17.

Derivatives and other financial instruments

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 managing currency and market risk arising from the Company's activities.

The main risks the Company faces from these financial instruments are (i) market risk (comprising interest rate and other price risk), (ii) liquidity risk and (iii) 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. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy. Current strategy is detailed in the Chairman's Statement (in the sections headed "Performance", "Dividends" and "Outlook") and in the Investment Manager's Review (in the sections headed "Background", "Performance", "Portfolio Activity", "Structure", "Income" and "Outlook").

The Board has agreed the parameters for gearing, which was 9.2% of net assets as at 30 June 2011 (2010 - 9.9%). 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 table listed below exclude short-term debtors and creditors.

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 in the Review of Business. Adherence to investment guidelines and to investment and borrowing powers set out in the management agreement mitigates the risk of exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager's Review.

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. A summary of investment changes during the year under review and an analysis of the equity portfolio by industrial classification appear in the Annual Report (the twenty largest portfolio holdings are shown below).

Interest rate risk

Interest rate movements may affect:

- the fair value of the investments in fixed interest rate securities;

- the level of income receivable on cash deposits;

- interest payable on the Company's variable rate borrowings.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

Financial assets

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.

The interest rate risk of the portfolio of financial assets at the Balance Sheet date was as follows:

Floating rate

Fixed rate

Non-interest bearing

2011

2010

2011

2010

2011

2010

£'000

US Dollar

Swedish Krona

4,052

Swiss Francs

10,310

1,848

Euro

699

20,024

1,861

Sterling

4,751

35,037

2,002

12,366

430,325

336,210

_______

Total

5,515

35,037

2,002

12,366

464,711

339,919

_______

The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.

The interest bearing assets represent corporate bonds, amounting to £2,002,000 (2010 - £12,366,000). Their weighted average interest rate, based on current yield of the underlying equity, plus a fixed rate of interest on the nominal amount notes held, was 14.00% (2010 - 8.92%).

The non-interest bearing assets represent the equity element of the portfolio.

Financial liabilities

The Company has borrowings by way of a loan facility, details of which are in note 11. The fair value of this loan has been calculated at £40,000,000 as at 30 June 2011 (2010 - £35,000,000). The fair value of the loan equates to the cost as the loans are rolled on a regular basis. All other financial assets and liabilities of the Company are included in the Balance Sheet at their book value which in the opinion of the Directors is not materially different from their fair value.

Maturity profile

The maturity profile of the Company's financial assets and liabilities at 30 June was as follows:

Within

1 year

2011

2010

Assets

£'000

Fixed rate

Equity linked notes

10,387

_________

Floating rate

Cash

5,515

35,037

_________

More than

5 years

2011

2010

Assets

£'000

Fixed rate

Corporate Bonds

2,002

1,979

_________

Within

1 year

2011

2010

Liabilities

£'000

Floating rate

Revolving bank credit facility

40,000

35,000

_________

All the other financial assets and liabilities do not have a maturity date.

Interest rate sensitivity

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

If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company's profit before tax for the year ended 30 June 2011 and net assets would increase/decrease by £55,000 (2010 - increase/decrease by £350,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.

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 Balance Sheet can be affected by movements in exchange rates.

The revenue account is subject to currency fluctuations arising on dividends paid in foreign currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. The Company does not hedge this currency risk.

Foreign currency risk exposure by currency of denomination:

30 June 2011

30 June 2010

Net

Total

Net

Total

monetary

currency

monetary

currency

Investments

assets

exposure

Investments

assets

exposure

£'000

US Dollar

Swedish Krona

4,052

4,068

Swiss Francs

10,310

10,344

1,848

Euro

20,024

699

20,723

1,861

Sterling

432,327

(35,249)

397,078

348,576

348,613

_______

Total

466,713

(34,485)

432,228

352,285

352,322

_______

Foreign currency sensitivity

No sensitivity analysis has been included. Where the Company's equity investments (which are non-monetary items) are priced in a foreign currency, they have been included within the other price risk sensitivity analysis so as to show the overall level of exposure.

Other price risk

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

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed in the section "Investment Policy" in the Review of Business, 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 Balance Sheet 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 2011 would have increased/decreased by £46,671,000 (2010 - £35,229,000).

Liquidity 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 2011 the Company utilised £40,000,000 of a £60,000,000 revolving bank credit facility. Interest is charged at a variable rate based on LIBOR plus a margin of 1.30% for the relevant period of the advance. As at 30 June 2011 this rate was 1.92840% and the loan matured on 11 July 2011. The aggregate of all future interest payments at the rate ruling at 30 June 2011 and the redemption of the loan amounted to £40,066,000.

Credit risk

Credit risk 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. This is mitigated by the Investment Manager reviewing the credit ratings of broker 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 their performance is reviewed by the Board on a regular basis and reports its finding to the Manager's Risk Management Committee. 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 2011 is £10,422,000 (30 June 2010 - £50,073,000) consisting of £nil (2010 - £10,387,000) equity linked notes, £2,002,000 (2010 - £1,979,000) corporate bonds, £2,905,000 (2010 - £2,670,000) of dividends receivable from equity shares and £5,515,000 in cash held (2010 - £35,037,000).

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

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 of UK and overseas equities.

The capital of the Company consists of 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 planned level of gearing which takes into account the Investment Manager's views on the market;

- the level of equity shares in issue;

- the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.

At the year end financial covenants contained within the loan agreements provide, inter alia, that borrowings shall at no time exceed 30% of net assets and that the net assets must exceed £225 million. At 30 June 2011 net gearing was 9.2% (2010 - 9.9%) and the net assets were £434.4 million (2010 - £354.4 million).

18.	Fair value hierarchy
	The Company adopted the amendments to FRS 29 'Financial Instruments: Disclosures' effective from 1 January 2009. These amendments require an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

	- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	- Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at the Balance Sheet date as follows:

	For the year ended 30 June 2011
				Level 1	Level 2	Level 3	Total
			Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	464,711	-	-	464,711
	Quoted bonds		b)	2,002	-	-	2,002
				_______	_______	_______	_______
	Total			466,713	-	-	466,713
				_______	_______	_______	_______
	Financial liabilities at fair value through profit or loss
	Derivatives		c)	(129)	(177)	-	(306)
				_______	_______	_______	_______
	Net fair value			466,584	(177)	-	466,407
				_______	_______	_______	_______
	For the year ended 30 June 2010
				Level 1	Level 2	Level 3	Total
			Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	339,919	-	-	339,919
	Reverse convertibles		b)	1,979	10,387	-	12,366
				_______	_______	_______	_______
	Total			341,898	10,387	-	352,285
				_______	_______	_______	_______
	Financial liabilities at fair value through profit or loss
	Derivatives		c)	(236)	(116)	-	(352)
				_______	_______	_______	_______
	Net fair value			341,662	10,271	-	351,933
				_______	_______	_______	_______

	a)	Quoted equities
		The fair value of the Company's investments in quoted equities have been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.

	b)	Quoted bonds
		The fair value of the Company's investments in corporate quoted bonds have been determined by reference to their quoted bid prices at the reporting date.

	c)	Derivatives
		The fair value of the Company's investments in exchange traded options has been determined using quoted prices on an exchange traded basis and therefore have been classed as Level 1.

		The fair value of the Company's investments in over-the-counter options has been determined using observable market inputs other than quoted prices and are therefore included within Level 2.

19.	Events after the reporting period
	Since the period end, on a total return basis, the NAV has fallen by 9.5% and the FTSE All-Share Index has fallen by 10.2% in the period 30 June to 7 September 2011.

20. If approved, the proposed final dividend of 12.25p per share will be paid on 26 October 2011 to holders of Ordinary shares on the register at the close of business on 23 September 2011. In respect of the year ending 30 June 2012, three interim dividends of 5.50p per share will be paid on 13 January 2012, 13 April 2012 and 13 July 2012 to holders of Ordinary shares on the register at the close of business on 16 December 2011, 9 March 2012 and 8 June 2012 respectively.

21. The Annual General Meeting will be held on 25 October 2011 at 12.30 pm.

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

The figures and financial information for the year ended 30 June 2011 are compiled from an extract of the latest accounts of the Company and do not constitute the statutory accounts for that year. Those accounts included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or (3) of the Companies Act 2006. They have not yet been delivered to the Registrar of Companies. The figures and financial information for the year ended 30 June 2010 are compiled from an extract of the latest published accounts of the Company and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or (3) of the Companies Act 2006. The 2011 accounts will be filed with the Registrar of Companies in due course.

The annual results will be circulated to shareholders in the form of an Annual Report, copies of which will be available at the Company's registered office, 40 Princes Street, Edinburgh EH2 2BY and from the Company's website (www.murray-income.co.uk*) and which will be filed with the Registrar of Companies.

*Neither the Company's website nor the content of any website accessible from hyperlinks on that website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By Order of the Board

ABERDEEN ASSET MANAGEMENT PLC

Secretary

9 September 2011

MURRAY INCOME TRUST PLC

Summary of Investment Changes during the year

	Valuation				Valuation
	30 June 2010		Transactions	Gains/(losses)	30 June 2011
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	336,210	86.3	13,578	80,537	430,325	90.7
France	-	-	8,077	(256)	7,821	1.6
Italy	1,861	0.5	9,314	1,028	12,203	2.6
Sweden	-	-	5,479	(1,427)	4,052	0.9
Switzerland	1,848	0.5	7,274	1,188	10,310	2.2
	_______	_______	_______	_______	_______	_______
	339,919	87.3	43,722	81,070	464,711	98.0
	_______	_______	_______	_______	_______	_______
Convertible securities/fixed interest
United Kingdom	12,366	3.2	(8,204)	(2,160)	2,002	0.4
	_______	_______	_______	_______	_______	_______
Total investments	352,285	90.5	35,518	78,910	466,713	98.4
	_______	_______	_______	_______	_______	_______
Other net assets	37,140	9.5	(29,447)	-	7,693	1.6
	_______	_______	_______	_______	_______	_______
Total assets less current liabilities (excluding bank loan)	389,425	100.0	6,071	78,910	474,406	100.0
	_______	_______	_______	_______	_______	_______

Summary of Net Assets

	As at
	30 June 2011
	£'000	%
Equities	464,711	107.0
Convertible securities/fixed interest	2,002	0.4
Other net assets	7,693	1.8
Borrowings	(40,000)	(9.2)
	_______	_______
Equity shareholders' interest	434,406	100.0
	_______	_______

MURRAY INCOME TRUST PLC

Twenty Largest Investments

As at 30 June 2011

	Valuation	Total	Valuation
	2011	assets	2010
Investment	£'000	%	£'000
1 (4) British American Tobacco
British American Tobacco manufactures and markets cigarettes and other tobacco products, including cigars and roll-your-own tobacco. The group sells over 200 brands in approximately 180 countries. Key brands include: Dunhill, Kent, Pall Mall and Lucky Strike. Strong cashflow is an attractive characteristic of the tobacco industry.	25,808	5.4	18,267

2 (2) Royal Dutch Shell
Royal Dutch Shell is engaged in all phases of the petroleum industry, from exploration to processing and distribution. It has strong positions in oil products marketing and LNG, globally. The group operates in over 130 countries.	24,019	5.1	19,572

3 (1) Centrica
Centrica provides gas, electricity and energy-related products and services to business and residential customers in the UK and USA. It also provides central heating and gas appliance installation and maintenance services. The company enjoys a strong competitive position in the UK market, which provides a solid platform from which to generate long-term value.	22,470	4.7	19,582

4 (5) Vodafone Group
Vodafone is one of the world's largest mobile phone companies, with a significant position in major economies including Germany, Italy, the UK and the US, as well as many emerging markets. The group generates a significant amount of free cashflow.	22,334	4.7	17,275

5 (7) GlaxoSmithKline {A}
GlaxoSmithKline is a research-based pharmaceutical group that also develops, manufactures and markets vaccines, prescription and over-the-counter medicines, as well as health-related consumer products. The group specialises in treatments for respiratory, central nervous system, gastro-intestinal and genetic disorders.	19,877	4.2	14,964

6 (8) BP {A}
BP is one of the world's largest petroleum and petrochemicals groups. Its main activities are: exploration and production of crude oil and natural gas; refining, marketing, supply and transportation of petroleum products.	18,804	4.0	13,125

7 (6) AstraZeneca
AstraZeneca researches, develops, produces and markets pharmaceutical products. The company's operations are focused on six therapeutic areas: Cardiovascular, Oncology, Respiratory, Neuroscience, Inflammation and Infection. The company's product pipeline offers a number of interesting opportunities.	18,555	3.9	16,796

8 (11) Unilever {A}
Unilever is a global consumer goods company supplying food, home and personal care products. The company has a portfolio of strong brands including: Dove, Knorr, Axe and Persil. Over half of the company's sales are to developing and emerging markets.	18,255	3.8	10,704

9 (3) HSBC Holdings
HSBC group is one of the world's largest banking and financial services institutions. Its international network comprises more than 5,000 offices in 80 countries and territories, operating in the Asia Pacific region, Europe, the Americas, the Middle East and Africa. The diversity of HSBC's business and exposure to faster growing regions of the world should enable it to deliver superior long-term growth.	16,527	3.5	18,546

10 (9) National Grid
National Grid owns and operates electricity and gas networks throughout the UK and in the US. It will benefit from the requirement to increase energy infrastructure spend over the long term. The company offers a generous dividend yield.	16,146	3.4	12,943
Top ten investments	202,795	42.7

11 (-) Pearson
Pearson is one of the world's leading education companies. From pre-school to professional certification, the company's curriculum materials, multimedia learning tools and testing programmes help to educate more than 100m people worldwide. The company offers access to long term structural growth.	16,052	3.4	5,239

12 (10) Tesco
Tesco is one of the world's largest food retailers, with operations around the world. Its international operations provide a platform for growth, coupled with non-food sales and financial services. The company benefits from significant property asset-backing.	15,067	3.2	11,204

13 (12) Aviva
Aviva is an international insurance company which provides a broad variety of classes of general and life assurance, including fire, motor, marine, aviation and transport insurance.	14,641	3.1	10,475

14 (-) ENI
Listed in Italy, ENI is an integrated energy company, committed to developing its activities in research, production, transport and marketing of oil and natural gas. The company operates in 79 countries employing 80,000 people. ENI offers a generous dividend yield.	12,203	2.6	1,861

15 (13) Morrison (Wm) Supermarkets
Morrisons is one of the UK's largest supermarket chains. With an emphasis on good value, the company's vertically-integrated model means that it manages most of its operations in-house. There remains substantial opportunity for the company to expand its footprint in the UK through smaller stores.	12,164	2.6	9,979

16 (18) BHP Billiton
BHP Billiton is the world's largest diversified resources group with a global portfolio of high quality assets. Core activities comprise of production and distribution of minerals, mineral products and petroleum.	11,622	2.4	8,316

17 (-) Roche Holdings
Listed in Switzerland, Roche develops and manufactures pharmaceutical and diagnostic products with particular strengths in the areas of oncology, and cardiovascular and respiratory diseases. The company benefits from a strong product pipeline and limited near-term patent exposure.	10,310	2.2	1,848

18 (-) Land Securities Group
Land Securities owns, develops and manages offices, shopping centres and retail parks throughout the United Kingdom.	10,250	2.2	6,715

19 (17) Standard Chartered
Standard Chartered is an international banking group operating principally in Asia, Africa and the Middle East providing attractive access to growing markets.	9,923	2.1	8,837

20 (-) Aberforth Smaller Companies Trust
Aberforth Smaller Companies is an investment trust with a diversified portfolio of small UK quoted companies. The trust has a generous yield and benefits from substantial revenue reserves. Murray Income Trust has invested in this company for many years to gain a diversified exposure.	9,803	2.1	7,329
Top twenty investments	324,830	68.6

{A} Valuation for 2011 includes holdings in equities only. The 2010 valuation included holdings in both equities and reverse convertibles.
The value of the 20 largest investments represents 68.6% (2010 - 67.0%) of total assets.
The figures in brackets denote the position at the previous year end. (-) not previously in 20 largest investments.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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