Annual Financial Report

RNS Number : 2410S

Murray International Trust PLC

08 March 2019

 

MURRAY INTERNATIONAL TRUST PLC

Legal Entity Identifier (LEI):  549300BP77JO5Y8LM553

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2018

1.    STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

Financial Highlights

Net asset value total return{AB} 2018     -7.5% 2017     +14.7%			Share price total return{AB} 2018     -6.8% 2017     +11.0%
Benchmark total return{B} 2018     -5.2% 2017     +12.8%			Premium to net asset value{C} 2018     2.2% 2017     1.3%
Dividends per share{BD} 2018     51.5p			Net gearing{AC} - 2018     12.5%
2017     50.0p			2017     10.7%
Revenue return per share{B} 2018     49.6p 2017     51.8p			Ongoing charges ratio{AB} 2018     0.69% 2017     0.64%
{A}        Alternative Performance Measure (see pages 19, 77, 78, 84 and 85 of the published Annual Report).
{B}        For the year to 31 December.
{C}        As at 31 December.
{D}        Dividends declared for the year in which they were earned.

2.    CHAIRMAN'S STATEMENT

Performance

Global equity markets experienced a difficult twelve months to 31 December 2018. Four rises in short term interest rates by the US Federal Reserve took their toll on equity markets, particularly affecting emerging market assets. In addition, negative geopolitical events, notably the progressively escalating trade war between the US and China, also served to weigh on market sentiment.  Brexit related volatility presented constant challenges for both capital preservation and income accrual in a year that witnessed the largest equity market declines in a decade.  Despite a diversified defensive strategy, protecting capital proved unsuccessful in a period of widespread weakness.  Solid stock selection in Asia, North America and Europe positively impacted relative performance as did portfolio exposure to emerging market bonds.

The Company's net asset value ("NAV") posted a total return (ie with net income reinvested) of -7.5%, a disappointing performance in absolute terms and somewhat below the total return of -5.2% from the Company's benchmark (40% FTSE World UK Index and 60% FTSE World ex UK Index).  The share price posted a total return of -6.8% reflecting a slight increase in the level of premium to NAV. 

The Manager's Review gives further details of performance including an attribution analysis.  What such statistics fail to illustrate is the magnitude of volatility experienced over the period.  An opening six months of upward momentum accompanied by positive sentiment peaked in August, and then reversed into steep declines towards year end.  For the Company's more income focused portfolio, relative performance, which struggled initially, held up strongly in the sell-off.  In an otherwise unsatisfying period for total returns, this represented a small comfort.

Dividends and Dividend Policy

Three interim dividends of 11.5p per share (2017: three interims of 11.0p) have been declared during the year. Your Board is now recommending a final dividend of 17.0p (2017: 17.0p) which, subject to the approval of shareholders at the Annual General Meeting, will be paid on 17 May 2019 to shareholders on the register on 5 April 2019.  If approved, the total Ordinary dividends for the year will amount to 51.5p, an increase of 3.0% from last year (2017: 50.0p). After accounting for the payment of the final dividend, there will be a small transfer of approximately £2.5 million from the Company's revenue reserves.

This small transfer from reserves is in line with the policy that I have advised shareholders of in previous years.  The Board intends to maintain a progressive dividend policy given the Company's investment objective. This means that, in some years, revenue will be added to reserves, while, in others, revenue may be taken from reserves to supplement earned revenue for that year, to pay the annual dividend.  Shareholders should not be surprised or concerned by either outcome as, over time, the Company will aim to pay out what the underlying portfolio earns.

Management of Premium and Discount

At the Annual General Meeting held in April 2018, shareholders renewed the annual authorities to issue up to 10% of the Company's issued share capital for cash at a premium and to buy back up to 14.99% of the issued share capital at a discount. During the year, no Ordinary shares were purchased for Treasury or cancellation; however, we sold 357,665 shares from Treasury at a premium to NAV. The Board will be seeking approval from shareholders to renew both authorities in 2019.  As in previous years, both new shares and shares from Treasury will only be issued at a premium to NAV and shares will only be bought back at a discount to NAV. Resolutions to this effect will be proposed at the Annual General Meeting and the Directors strongly encourage shareholders to support these proposals.

During the year, the Ordinary shares have traded at an average premium to the NAV (including income) of 0.3%.  The Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. Subject to existing shareholder permissions (given at the last AGM) and prevailing market conditions over time. The Board intends to continue to buy back shares and issue new shares (or sell shares from Treasury) if shares trade at a persistent significant discount to NAV (excluding income) or premium to NAV (including income). The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the premium or discount to underlying NAV whilst also making a small positive contribution to the NAV.  From the year end up to 7 March 2019 the Company has sold a further 406,531 Ordinary shares from Treasury and issued 196,500 new Ordinary shares under the Company's blocklisting, all at a premium to the underlying inclusive of income NAV.  At the latest practicable date, the NAV (including income) per share was 1125.65p and the share price was 1180.0p equating to a premium of 4.8% per Ordinary share.

Gearing

At the year end, total borrowings amounted to £185 million, representing net gearing (calculated by dividing the total assets less cash by shareholders' funds) of 12.5% (2017: 10.7%) all of which is drawn in Sterling.  On 31 May 2018, the Company agreed a new £60 million loan facility with The Royal Bank of Scotland International Limited ("RBSI") which was drawn in full and fixed for five years at an all-in rate of 2.328%. The new facility was used to repay a maturing £60 million loan with RBSI. The Company also has a loan totalling £15 million with RBSI that is due to mature in May 2019. The Directors are in the process of reviewing options for the replacement of this facility.

Annual General Meeting

This year's Annual General Meeting will be held in Glasgow on 25 April 2019 at 12.30 p.m. at the Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow G2 3NY. As at previous AGMs, there will be a presentation from the Manager and an opportunity to meet the Directors and Manager over lunch. I should be grateful if you would confirm your attendance by completing the separate notice that will accompany the Annual Report, and returning it together with an indication of any particular questions. I hope to see as many shareholders as possible at the AGM in Glasgow.

Investment Policy and Benchmark

During the year, the Board undertook a review of the Manager's investment process. This exercise was conducted collaboratively and has enabled the Board to reaffirm the credibility of, and its satisfaction with, the investment process followed by the Manager. In addition, it demonstrated that the investment policy had been followed rigorously in both rising and falling markets and at times when the performance of the portfolio had varied significantly from the benchmark.

In conjunction with the review, we reconfirmed our present policy not to hedge the sterling translation risk of revenue arising from non-UK assets. As shareholders know, one implication of this is that movements in sterling will affect reported revenue, sometimes positively when sterling is generally weakening, and the opposite when it strengthens. In these circumstances, the Board is willing to use revenue reserves already earned with the intention of sustaining a progressive dividend policy.

In February 2019, the Financial Conduct Authority published its second set of rules following the Asset Management Market Study it began in 2015. A consequence of this is the need for fund managers to explain their use and adherence to benchmarks in the funds they manage. The Board and Manager will be giving due consideration together about any implications this holds for the Company during the year.

Directorate

Mr Jim Best retired from the Board at the conclusion of the AGM on 26 April 2018 and on 1 May 2018 we welcomed Ms Claire Binyon to the Board as an independent non executive Director, following the conclusion of a rigorous search conducted with the assistance of an independent external recruitment agency. Ms Binyon is a chartered accountant who, following an early career in corporate finance in the City, has embarked on a successful career working for global multinationals in the areas of corporate development, strategic planning and finance.  Ms Binyon is currently group corporate development director at Fenner Group Holdings Limited, part of the Michelin group of companies, having previously served in similar roles at other multinational companies including DS Smith Plc, Cadbury plc and InBev S.A.  Following the appointment of Ms Binyon, the Board consists of six Directors, three of whom are male and three of whom are female.

Led by Peter Dunscombe, the Senior Independent Director, the Board has carried out a review of the structure of the Board and, in particular, succession planning over the next few years.  As a consequence, it has been decided that Peter should retire from the Board at the AGM in 2020, and that I will retire at the AGM in 2021.  A process to recruit a new Director will be started later this year with the aim of an appointment being made at the AGM in 2020.  David Hardie will become the Senior Independent Director in 2020.

During February the Association of Investment Companies (the "AIC"), of which the Company is a member, published its updated 2019 Corporate Governance Code which applies to all investment companies with financial years beginning on or after 1 January 2019. The Company will adopt the AIC Code and in so doing will thereby comply with the Financial Reporting Council's Code which applies to all companies.

The AIC Code includes a concession in regard to the tenure of the Chair in investment companies. Instead of a Chair being deemed non-independent after nine years on a board, the AIC Code requires investment companies to state a policy in regard to Chair tenure. The Company will develop such a policy during the present financial year. This concession is to be welcomed as a sensible change in the context of investment companies, and the AIC and FRC are to be complimented for agreeing on it.

Ongoing Charges Ratio

The Board remains focussed upon delivering value to shareholders and regularly reviews the ongoing charges ratio ("OCR").  The Board is pleased to report that it has negotiated a reduction in the level of the investment management fee payable to the Manager.  The annual management fee will continue to be charged on net assets (ie excluding borrowings for investment purposes), averaged over the six previous quarters ("Net Assets"), but it will now be based upon an amended tiering structure. The annual management fee from 1 January 2019 is now charged at 0.5% of Net Assets up to £1,200m and 0.425% of Net Assets above £1,200m.  For the year ended 31 December 2018, the annual management fee was charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million.  This reduction in the level of management fee will, all other things being equal, flow through to a reduction in the OCR in future years.

Outlook

Rarely, if ever, has the combination of rising interest rates, increasing protectionism, deteriorating asset quality and constricting liquidity been conducive to sustainable positive equity market performance.  Since 2015, the US Federal Reserve has raised interest rates nine times. The cumulative effect of these rises finally took its toll on global equity markets in 2018. The question now is whether the very real possibility of growth stalling and profits declining will weigh further on markets in 2019.  The market repricing of late 2018 is unlikely to be the end of this corrective phase.

Consequently, from a portfolio management perspective, great caution needs to be exercised.  The implications of the protracted period of growth for the global economy subsiding, combined with concerns about geo-political tensions such as persistent protectionism, present difficult challenges for company profits.  There is no reliable precedent with which to predict how markets will behave while many large economies adjust to high indebtedness concurrently with central bank withdrawal of liquidity.  The Manager's investment preference will continue to favour quality companies with sustainable business models in regions of the world where growth and opportunity still prevail.  As such our portfolio will focus on global diversification in pursuit of the Company's long term investment objectives.

Chairman's Statement

Kevin Carter

Chairman

7 March 2019

3.    MANAGER'S REVIEW

Background

Excessive emotion is the enduring enemy of efficient capital investment.  Neither unbridled optimism nor melancholic pessimism are synonymous with sound judgement.  When rational expectations succumb to such extremes imprudent practice inevitably prevails.  The shameful historical repetition of financial market manias, panics and crashes suggest some fundamental human fallibility constantly reoccurs when market sentiment becomes hypnotic.  While grief and elation resemble fingerprints, unique and highly personal, the DNA of investors' mood manifestations is undoubtedly rooted in crowd behaviour.  Amplified by avarice and exaggerated by angst, the collective emotional bias induces self-perpetuating volatility and distended distortion.  Such toxic symptoms of mass expression dominated the financial landscape over the period.

Calendar year 2018 witnessed the worst performance from global equities in a decade, providing a stern test of portfolio conviction and investment process.  Ironically, prevailing economic fundamentals closely matched expectations over the twelve months.  The narrative from central banks and policymakers preached prudence and restraint, yet in practice policy options were limited.  Sharply rising debt servicing costs across the developed world reflected rising concerns over deteriorating credit quality.  Interest rates moved higher in the United States as predicted, but elsewhere punitive debt obligations condemned numerous central banks to uncomfortable inactivity.  Acutely aware of the current business cycles' increasing fragility, all thoughts of restoring normal savings rates were shelved.  Insipid and uninspiring economic growth in the UK, Europe and Japan presented serious challenges for governments desperate to maintain an illusion of prosperity.  Constrained by diminishing credit availability and devoid of tax and spending directives, the authorities could only watch as global growth decelerated to its lowest level in ten years.

Souring US-Chinese trade relations further compounded diminishing economic growth prospects, periodically threatening to inflict collateral damage on numerous global trade alliances.  Heightened tensions permeated into currency weakness for numerous emerging economies, provoking higher than necessary interest rates and consequently lower than expected growth.  Numerous countries in Latin America and Asia suffered accordingly as contagion spread.  Quite simply, protectionism proved universally negative for all concerned.  Few topics ever unite economists, but the destructive impact of trade protectionism is unequivocally one that does.  Throughout 2018, the escalation of trade hostilities once again emphasised the futility of such action.  Serving neither the interests of producers nor consumers, protectionism and the fracturing of foreign policy relationships that accompany it arguably represented the single largest threat to global cohesion and economic prosperity.  Towards year end consequential reverberations shattered market complacency as fear and doubt ravaged investor sentiment.  The resultant declines in capital values bore testament to that.

The term 'rollercoaster' barely does justice to the path of financial markets over the period.  First quarter weakness reversed into second quarter strength which in turn evolved into third quarter euphoria before a year end rout.  A modest -5.2% calendar year Benchmark index decline in Sterling terms masked general asset price weakness and volatility.  Stagnation surrounding Brexit and indifference towards Europe depressed returns from both the UK and European equity markets.  Over 9.0% declines in each reflected increasing investor apathy and emphasised how problematic the delivery of decent corporate profits in slow growth economies has become.  Low absolute exposure to both proved beneficial, although specific weakness in UK holdings negated superior defensive stock selection in Europe. 

Global technology stocks, around which sentiment oscillated the most, endured a torrid twelve months.  Significant capital was made and lost but, with only minimal portfolio exposure due to income constraints, unwelcome turbulence was largely limited to fluctuating relative performance.  The same cannot be said of tobacco stocks which featured prominently in negative performance attribution.  Out of favour despite supportive yields and cash flows, the sector failed to deliver defensive support.  Patience will be required until sentiment improves.  Larger absolute portfolio weightings in Asia, Latin America and North America generally preserved capital with the exception of Chile and Mexico where relative stock weakness following two years of exceptionally strong performance restrained returns.  Positive gains from Asian equities in a region that witnessed an index decline of 6.8% were most welcome. 

The portfolio's emerging market bond portfolio was constantly buffeted by currency concerns and unfavourable income translation rates but, in context the overall 2.4% decline in Sterling terms, was respectable relative to global equity market performance.  Current fixed income exposure continues to offer additional desired diversification at attractive valuations and will likely be maintained around existing levels.

Performance

The NAV total return for the year to 31 December 2018 with net dividends reinvested was -7.5% compared with a return on benchmark of -5.2%.  The top five and bottom stock contributors are detailed below:

Top Five Stock Contributors	%*	Bottom Five Stock Contributors	%*
CME Group	0.8	British American Tobacco	-1.4
Public Bank	0.4	Quimica Y Minera	-1.2
Verizon	0.4	Philip Morris	-0.9
Tesco Lotus Retail	0.3	Daito Trust	-0.9
Banco Bradesco	0.3	Unilever Indonesia	-0.6

* % relates to the percentage contribution to gross NAV return

Attribution Analysis

The attribution analysis below details the various influences on portfolio performance.  In summary, of the 110 basis points (before expenses) of performance below the benchmark, asset allocation detracted 90 basis points and stock selection a further 20 basis points. Structural effects, relating to the fixed income portfolio and gearing net of borrowing costs, detracted a further 10 basis points of relative performance.

	Company		Benchmark		Contribution from:
					Asset	Stock
	Weight	Return	Weight	Return	Allocation	Selection	Total
	%	%	%	%	%	%	%
UK	12.2	-20.2	40.0	-9.2	1.0	-1.7	-0.7
Europe ex UK	12.4	-3.5	9.7	-9.4	0.3	0.3	0.7
North America	19.3	2.3	37.9	0.8	-1.6	0.7	-1.0
Japan	4.6	-23.8	5.7	-7.7	0.0	-0.9	-0.8
Asia Pacific ex Japan	31.9	1.4	5.2	-6.8	0.4	1.8	2.1
Other International	19.6	-11.7	1.5	-7.1	-0.9	-0.4	-1.3
	______	______	______	______	______	______	______
Gross equity portfolio return	100.0	-6.3	100.0	-5.2	-0.9	-0.2	-1.1
FX Instruments, fixed interest, cash and gearing effect		-0.1
		______
Net portfolio return		-6.4
Management fees and administrative expenses		-0.6
Tax charge		______		______
Total Return		-7.5		-5.2
		______		______
Benchmark is 40% FTSE World UK Index and 60% FTSE World ex UK Index
Notes to Performance Analysis
Asset Allocation effect - measures the impact of over or underweighting each asset category, relative to the benchmark weights.
Stock Selection effect - measures the effect of security selection within each category.
Source: Aberdeen Standard Fund Managers Limited & BNP Paribas Securities Services Limited. Figures may appear not to add up due to rounding.

North America

Obsessed with externalising domestic policy failures, the orchestration of global trade conflict invariably originated from the White House.  Infectious insularity resonated to the tune of "America First".  Bolstered by one off tax revisions and aggressive fiscal stimulus, the over-extended US business cycle was kept alive.  Accelerating economic growth during the summer was championed by financial markets at the time as clear evidence of America's independent resilience.  Eternal optimists crowed of continuous non-cyclical, non-inflationary growth with corresponding corporate profits to match.  The technology heavy NASDAQ index soared to record highs by late August as the acolytes of perpetual asymmetrical appreciation paid up for perceived growth at any price.  Then reality began to set in.  By year end, as greed turned to fear, the NASDAQ index had plunged 25%.

As so often the case with capital destruction, sharp changes in perception relative to reality provided the catalyst.  Excessive sentiment reversal simply amplified the outcome.  The epiphany, when it arrived, shocked all yet should have surprised no-one.  Rising recession risks associated with tighter monetary policy and restrictive trade tariffs, a pernicious pairing for over-extended equities to digest, had prevailed throughout yet suddenly became noticed as entropy ensued.  In local currency terms all American equity indices declined.  The 0.8% rise in Sterling terms over the period for the North American index was purely down to Sterling weakness.  Hardest hit sectors included technology, financials, consumer staples and industrials, a widely diversified range which compounded the difficulties of preserving capital.  The defensive orientation of North American exposure was severely tested. 

With the exception of Philip Morris, which experienced a tough operating environment over the period, portfolio exposure performed well.  The strongest performance came from CME Group, one of the world's most profitable operators of stock, derivatives and commodity exchanges, but communication giants Verizon and Telus plus technology innovator Intel also added significant contributions to absolute and relative performance.  Late in the year a new position was established in Schlumberger, the world's largest and leading oil services provider.  Following an extremely frugal five years for the sector, both maintenance and logistical capital expenditures look poised to recover. 

The propensity for parsimonious pay-out ratios still prevails within corporate America, thereby limiting potential investment opportunities for the Trust's dividend growth-focused portfolio.  Selective exposure will be maintained but more attractive opportunities are deemed to exist elsewhere.

UK

Battered, bruised and beleaguered, the UK economy limped through 2018 essentially paralysed by Brexit uncertainty.  Hostage to relentless political wrangling, British industry had neither clarity nor confidence to invest for the future.  The Bank of England response to evolving events merely emphasised the institution's current impotence.  Attempts to inspire confidence fell on deaf ears each time Governor Carney pronounced "the Central Bank was ready for whatever path the economy takes".  Judging by recent evidence, that path looks increasingly destined for the wilderness.  For British manufacturers, exporters, service industries, retailers, consumers and everything in-between, Brexit became the single largest constraint on spending and investment (out-with war or recession) ever imposed upon the economy.  Long term structural damage and the demise of international confidence are consequences likely to impair national prosperity for years to come.

For equity investment such a backdrop proved problematic.  What meagre growth emerged depended solely on credit and savings, but an already exhausted debt-ridden consumer cannot extend borrowings indefinitely.  Investors need to be wary of deteriorating credit quality in domestic banks, margin pressure on high street retailers and fragile demand for discretionary products.  High double digit declines within the FTSE All Share of each sector emphasises exactly this.  Periodically UK stock selection became akin to treading on eggshells as macro-economic malaise materialised in each and every trading statement. 

Despite historically low portfolio exposure and emphasis on companies skewed to overseas earnings, UK equity investment proved extremely disappointing.  Only BHP Group (formerly BHP Billiton) and Royal Dutch Shell delivered above market returns despite neither conforming to typecast of typical defensive businesses.  For BAT, Weir Group and Vodafone it was a year to forget and move on.  For such internationally focused companies self- help and operational improvements offer prospects for salvation, but what of domestic UK Plc?

It would be futile to attempt rational analysis of an economy and corporate landscape in which intangibles reign supreme.  Only when the UK/European issue is done and dusted can the damage be truly assessed.  The much vaunted normalisation of UK interest rates remains as elusive as ever yet in truth no-one knows what normal interest rates might be for a chronically indebted foreign-capital dependent economy like the UK.  In the meantime hard earned savings are eaten away by inflation, real incomes decline, the corporate sector remains suspended in a vacuum and Britain's long term viability and reputation as a place to do business diminishes.  From a global perspective the argument to invest has seldom been so uncompelling.

Europe

Escalating protectionist paranoia stoked the fires of populist rhetoric throughout Europe in 2018.  Germany's gigantic trade surplus fell under the spotlight of America's injustice inspectorate, with the European Central Bank standing accused of manipulating the euro lower through a zero interest rate policy in pursuit of German export competitiveness.  Simplistic in the extreme, such primitive logic ignored the more likely possibility - German export success based on high-quality innovative products desired the world over.  Unfortunately, rational reasoning succumbed to irrational response as Europe struggled to contain increasingly fragmented interests.  Less affected by trade tariffs, Italy demanded greater fiscal autonomy to alleviate domestic austerity.  Rome's deepening conflict with Brussels caused periodic chaos for Italian bonds and corporate credit markets.  France fretted over decaying trade relationships but fixing endemic unemployment remained the key challenge for increasingly populist politicians.  In the event little progress was made.  Of most concern, growth in Germany slowed and political pressure intensified.  Dragged down by auto sector weakness towards year end, Germany's economy contracted and Europe held its breath.

Whilst conflict and confrontation became constant companions of European politics, financial markets remained ill prepared and unforgiving of such perceived petulance.  Negative returns across the continent reflected this and more.  In anticipation of emerging bad debt problems and constant downward pressure on corporate profitability, European portfolio exposure had been systematically reduced in recent years.  In such a challenging, deflationary environment it is difficult to make money. 

During the period, net exposure rose slightly due to establishing a new position in Bank Pekao in Poland.  Strongly capitalised with nationwide presence, the bank is well positioned for growth in one of Europe's fastest growing economies.  Large holdings in Swiss pharmaceutical companies Roche and Novartis performed well delivering solid earnings and dividend growth.  Exposure to Swedish industrials was increased through investment in Epiroc and Atlas Copco, both quality international focused companies where weak stock price performance seemed excessive relative to fundamentals.  Divestment centred around French exposure where diminishing growth prospects raised genuine concerns.  As of year end, Total, the integrated energy giant, was the sole French portfolio holding.  Current levels of low exposure to the region are likely to be maintained.

Latin America

Intense political passion coursed through the veins of Latin American financial markets in a year dominated by congressional change. Presidential elections in both Mexico and Brazil ensured emotions were kept at boiling point throughout.  The ever present risk of trade disruption between Mexico and the United States depressed confidence and private investment intentions south of the Rio Grande. Against a backdrop of subdued growth and external criticism, Andres Manuel Lopez Obrador successfully campaigned on a centre-left populist agenda which ultimately installed him as Mexico's 58^th President in October.  Domestic financial markets monitored evolving events closely but generally reserved judgement.

A 6% appreciation of the Mexican Peso against Sterling over the period proved beneficial for domestic bond holdings.  Having fully divested of Coca Cola distributor Femsa following a long period of strong capital performance but disappointing dividend growth, residual Mexican equity exposure centred on airport operator, Grupo Asur and consumer products distributor Kimberly Clark De Mexico.  Although operationally both companies remained solidly competitive, weakness in stock price total returns essentially reflected fragile market sentiment. Improving prospects warrant additional investment and instil future confidence.

Brazil's newly elected President Jair Bolsonaro emerged from the opposite end of the political spectrum.  Elected on promises to eradicate corruption, stabilise public debt, reinvigorate pension reform, improve productivity and shrink State intervention, if such stated intentions appeared familiar it is because they are.  Just about every Brazilian President over the past thirty years, whether from the Left, Right or Centre, has promised to deliver this mandate.  With interest rates accommodative and growth poised to accelerate, tail winds exist to ease these challenges.  Whether the ex-military general displays enough political and executive skill to deliver, only time will tell.  Domestic financial markets, long-suffering from relatively recent Presidential impeachment and corporate embarrassments, unequivocally welcomed the change.

Despite a 10% relative decline in the Real, Brazilian equities delivered positive returns even in Sterling terms.  Against the prevailing global backdrop this was both remarkable and welcome.  Significant bond and equity portfolio exposure contributed solid absolute returns and enhanced accrued income.  Dominant financial services provider Banco Bradesco benefited from favourable interest rates and improving loan demand, whilst logistics company Wilson Sons confirmed its strategic position in container transportation. Such evolving corporate and economic progress proved both encouraging and welcome.  Post review period, recovering national confidence was dealt a severe blow from the recent mining-dam collapse and tragic loss of life at Vale's iron-ore operations in Minas Gerais. The time will come to investigate causes and quantify long-term effects, but for now the harrowing and heartbreaking consequences must be addressed and comforted.

The negative portfolio impact of Chilean lithium producer Quimica y Minera must be considered within a long term context.  Over the next five years, constant capital investment is scheduled to quadruple production of the company's precious commodity used in battery manufacture.  Smoothing capacity additions to sustain product pricing will be key, but significant value exists on successful execution of strategy.  Patience and portfolio exposure will be maintained.

Japan and Asia

With almost one third of total gross assets invested in Asian equities, the portfolio's zero exposure to mainland China often attracts comment.  Unequivocally accepted as the world's most influential emerging market, it is reasonable to ask why.  The answer is relatively straightforward.  Significant market presence of low-yielding technology stocks coupled with similar dividend agnostic financials and consumer discretionary businesses present severe impediments for income focused investors.  Capital growth reigns supreme in Chinese investment convention, but unfortunately stock prices do not always go up.  Hostage to America's obsessively hostile posturing on trade protectionism and wrestling with problematic domestic credit issues, the 22% decline in Sterling terms of the Shanghai Composite represented the steepest fall of all major markets.  Having zero direct exposure certainly did no harm.  How China calibrates policy responses to external and internal difficulties as its economy inevitably decelerates must be viewed from the perspective of a multi-year adjustment process.  Ultimately the authorities are likely to achieve their desired aims, but expect numerous bumps along the way.

Asian portfolio performance was generally positive.  Public Bank in Malaysia, Tesco Lotus Retail in Thailand and New Zealand airport operator Auckland Airport, all delivered dividend growth and positive double digit absolute returns.  Hong Kong exposure to industrial conglomerate Swire Pacific and transportation operator MTR combined to deliver positive total returns as did significant Taiwanese portfolio exposure to Taiwan Semiconductor and Taiwan Mobile.  Whilst stock selection in Japan and Indonesia was weak, previous consecutive years of strength accounted for some inevitability of this temporary pull-back.  Towards year-end a new position in Samsung Electronics was established.  This leading global manufacturer of consumer and industrial electronics had suffered significant stock price weakness from trade protectionism concerns and fears over slowing semiconductor orders.  With neither adjudged to materially impair positive long-term fundamentals, investment was initiated. 

Irrefutable evidence depicts prevailing trade uncertainties and periodic related currency weakness condemned Asia central banks to keep monetary policy tighter than fundamental inflation dynamics required in 2018.  Should such pressure abate the scope for future interest rate declines is significant, strongly supportive of a positive long term investment stance.

Summary of Investment Changes During the Year

	Valuation		Appreciation/		Valuation
	31 December 2018		(depreciation)	Transactions	31 December 2017
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	161,681	10.1	(56,455)	3,856	214,280	12.0
North America	255,600	15.9	(13,680)	13,064	256,216	14.4
Europe ex UK	164,493	10.3	1,651	(5,516)	168,358	9.4
Japan	60,367	3.8	(21,019)	5,621	75,765	4.3
Asia Pacific ex Japan	420,862	26.2	(31,736)	22,168	430,430	24.1
Latin America	248,970	15.5	(54,297)	(12,264)	315,531	17.7
Africa	9,712	0.6	(5,856)	(2,358)	17,926	1.0
	_______	_______	_______	_______	_______	_______
	1,321,685	82.4	(181,392)	24,571	1,478,506	82.9
	_______	_______	_______	_______	_______	_______
Preference shares
United Kingdom	6,721	0.4	(1,931)	-	8,652	0.5
	_______	_______	_______	_______	_______	_______
	6,721	0.4	(1,931)	-	8,652	0.5
	_______	_______	_______	_______	_______	_______
Fixed income
Europe ex UK	16,169	1.0	(9,912)	182	25,899	1.4
Asia Pacific ex Japan	85,595	5.3	(6,116)	10,261	81,450	4.6
Latin America	137,057	8.6	(9,233)	713	145,577	8.2
Africa	17,939	1.1	(1,961)	85	19,815	1.1
	_______	_______	_______	_______	_______	_______
	256,760	16.0	(27,222)	11,241	272,741	15.3
	_______	_______	_______	_______	_______	_______
Other net assets	19,098	1.2	(4,867)	-	23,965	1.3
	_______	_______	_______	_______	_______	_______
Total assets{A}	1,604,264	100.0	(215,412)	35,812	1,783,864	100.0
	_______	_______	_______	_______	_______	_______
{A} See definition on page 85 of the published Annual Report.

Outlook

Few subjects have such inherent capacity to evoke emotion as investing money.  Across the spectrum from amateur enthusiast to professional investor, return on capital, or lack of it, constantly exercises the mind.  Providing rational logic prevails, surpluses and deficits can be managed and excesses of both contained. Yet periodically such prescribed sanity is sacrificed at the altar of irrational excess.  Chaotic consequences invariably ensue.  For some considerable time now converging crowd-like investment behaviour has propelled favoured sectors and markets to valuations beyond boundaries of realistic expectations or sustainable business-cycle influence.  The charm of following consensus has rarely been so unfounded and unappealing.

Maintaining conviction and dispassionate confidence remains essential in successfully negotiating the current fragile investment climate.  Such autonomous thought, engrained in the Trust's long-term philosophy, consistently embraces such challenge. 

An unfamiliar economic landscape of chronic over-indebtedness, insolvent sovereign balance sheets, extinct policy options, structured income inequalities and unpredictable disruptive industries dominate the developed world outlook.  Presumptions that the further backward you can look the further forward you can see also appear increasingly redundant against this backdrop.  Yet beyond the economic ambiguity of what outcomes ultimately evolve, some common constants prevail.  Business cycles come and go, interest rates go up and down and pursuit of investment returns continues regardless.  To this end, our investment strategy will remain disciplined, focused and geographically diversified.  Balance sheet strength and quality will be emphasised as will exposure to genuine growth opportunities.  Over and above, as market emotions invariably ebb and flow, resolute realism will be rigorously applied.

Bruce Stout

Senior Investment Director

Aberdeen Asset Managers Limited

7 March 2019

4. STRATEGIC REPORT - OVERVIEW OF STRATEGY

Investment Objective

The aim of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide. Within this objective, the Manager will seek to increase the Company's revenues in order to maintain an above average dividend yield. 

The Company's investment policy and financial highlights are shown on pages 14 and 2 of the published Annual Report.  

A review of the Company's activities is given in the Chairman's Statement and the Manager's Review.

Overview of Strategy

The Chairman's Statement and Manager's Review include an analysis of the business of the Company and its principal activities, likely future developments of the business, the recommended dividend and details of any transactions in its own securities by the Company.

Business Model

The Manager has its own investment process, which, in the case of the Company, is overseen by the Board.

Investment Policy

Asset Allocation

The Company's assets are invested in a diversified portfolio of international equities and fixed income securities spread across a range of industries and economies. The Company's investment policy is flexible and it may, from time to time, hold other securities including (but not limited to) index-linked securities, convertible securities, preference shares, unlisted securities, depositary receipts and other equity-related securities. The Company may invest in derivatives for the purposes of efficient portfolio management. The Company's investment policy does not impose any geographical, sectoral or industrial constraints upon the Manager.  The Board has set guidelines which the Manager is required to work within from meeting to meeting.  It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including listed investment trusts), at the time of purchase. The Company currently does not have any investments in other investment companies.

Risk Diversification

The Manager actively monitors the Company's portfolio and attempts to mitigate risk primarily through diversification. The Company is permitted to invest up to 15% of its investments by value in any single holding (at the time of purchase).

Gearing

The Board considers that returns to shareholders can be enhanced by the judicious use of borrowing. The Board is responsible for the level of gearing in the Company and reviews the position on a regular basis. Any borrowing, except for short-term liquidity purposes, is used for investment purposes or to fund the purchase of the Company's own shares. Total gearing will not in normal circumstances exceed 30% of net assets with cash deposits netted against the level of borrowings. At the year end, there was net gearing of 12.5% (calculated in accordance with Association of Investment Companies guidance) and particular care is taken to ensure that any bank covenants permit maximum flexibility in investment policy.

Changes to Investment Policy

Any material change to the investment policy will require the approval of the shareholders by way of an ordinary resolution at a general meeting. The Company will promptly issue an announcement to inform the shareholders and the public of any change of its investment policy.

Delivering the Investment Policy

Day-to-day management of the Company's assets has been delegated to the Manager. The Manager invests in a diversified range of international companies in accordance with the investment objective.

The portfolio manager, Bruce Stout, has responsibility for portfolio construction across all regional segments. As can be seen from the Investment Process diagram on page 13 of the published Annual Report, the management team utilises a "Global Equity Buy List" which is constructed by each of the specialist country management teams. This list contains all buy (and hold) recommendations for each management team, which are then used by the portfolio manager as the Company's investment universe. Stock selection is the major source of added value over time.

Top-down investment factors are secondary in the Manager's portfolio construction, with stock diversification rather than formal controls guiding stock and sector weights.  Market capitalisation is not a primary concern.

A detailed description of the investment process and risk controls employed by the Manager is disclosed on pages 16 to 17 of the published Annual Report. A comprehensive analysis of the Company's portfolio is disclosed on pages 22 to 27 of the published Annual Report including a description of the twenty largest investments, the portfolio of investments by value, distribution of investments and distribution of equity investments. The portfolio attribution analysis is on page 8 of the published Annual Report.

In addition to equity exposures, the investment mandate provides the flexibility to invest in fixed income securities. The process of identifying, selecting and monitoring both sovereign and corporate bonds follows exactly the same structure and methodology as that for equity investment, fully utilising the global investment resources of the Manager. As in the case of equity exposure, the total amount, geographical preference, sector bias and specific securities will ultimately depend upon relative valuation and future prospects.

At the year end, the Company's portfolio consisted of 50 equity and 28 bond holdings. The Manager is authorised by the Board to hold between 45 and 150 holdings in the portfolio.

Management

The Company's Alternative Investment Fund Manager is Aberdeen Standard Fund Managers Limited ("ASFML") which is authorised and regulated by the Financial Conduct Authority Day to day management of the portfolio is delegated to Aberdeen Asset Managers Limited ("AAM"). AAM and ASFML are collectively referred to as the "Investment Manager" or the "Manager".

Website

murray-intl.co.uk

Benchmark

The Company's Benchmark is a composite index comprising 40% of the FTSE World UK Index and 60% of the FTSE World ex-UK Index. Given the composition of the portfolio and the Manager's investment process, as explained on page 13 of the published Annual Report, it is likely that the Company's investment performance will diverge from this Benchmark.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determine the progress of the Company in pursuing its investment policy.  The main KPIs (refer to glossary on page 85 of the published Annual Report for definition) identified by the Board in relation to the Company which are considered at each Board meeting are as follows:

KPI	Description
Performance	Absolute Performance: The Board considers the Company's NAV total return figures to be the best indicators of performance over time and these are therefore the main indicators of performance used by the Board. Relative Performance: The Board also measures performance against the Benchmark and performance relative to competitor investment trusts over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies. Share Price Performance: The Board also monitors the price at which the Company's shares trade relative to the Benchmark on a total return basis over time A graph showing absolute, relative and share price performance is shown on page 20 of the published Annual Report.
Discount/Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount/premium by the use of share buy backs and the issuance of new shares or the sale of Treasury shares, subject to market conditions.  A graph showing the share price premium/(discount) relative to the NAV is shown on page 20 of the published Annual Report.
Dividend	The Board's aim is to seek to increase the Company's revenues over time in order to maintain an above average dividend yield. Dividends paid over the past 10 years are set out on page 19 together with a graph showing dividend growth against CPI and RPI on page 20 of the published Annual Report.
Gearing	The Board's aim is to ensure that gearing is kept within the Board's guidelines issued to the Manager.

Risk Management

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has undertaken a robust review of the principal risks and uncertainties facing the Company including those that would threaten its business model, future performance, solvency or liquidity.  Those principal risks are disclosed in the table on page 17 of the published Annual Report together with a description of the mitigating actions taken by the Board.  The principal risks associated with an investment in the Company's shares are published monthly on the Company's factsheet or they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available on the Company's website. Significant matters relating to the work of the Audit Committee are discussed in the Report of the Audit Committee on pages 43 and 44 of the published Annual Report and further detail on financial risks and risk management is disclosed in note 17 to the financial statements. In addition to these risks, the outcome and potential impact of the UK Government's Brexit discussions with the European Union are still unclear at the time of writing, and the potential for significant resultant currency volatility remains an economic risk for the Company in the meantime. In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the current financial year. 

The Board regularly reviews the risks and uncertainties faced by the Company in the form of a risk matrix and a summary of the principal risks is set out below. 

Description	Mitigating Action
Investment strategy and objectives - if the Company's investment objective becomes unattractive and the Company fails to adapt to changes in investor demand, the Company may become unattractive to investors, leading to decreased demand for its shares and a widening discount.	The Board keeps the level of discount and/or premium at which the Company's shares trade as well as the investment objective and policy under review and holds an annual strategy meeting where the Board reviews updates from the Manager, investor relations reports and the Broker reports on the market. In addition, the Board is updated at each Board meeting on the make up of and any movements in the shareholder register and the Directors attend meetings with shareholders to keep abreast of investor opinion.
Investment portfolio, investment management - investing outside of the investment restrictions and guidelines set by the Board or poor stock selection could result in poor performance and inability to meet the Company's objectives.	The Board sets and monitors its investment restrictions and guidelines and receives regular Board reports which include performance reporting on the implementation of the investment policy, the investment process and application of the guidelines. The Manager attends all Board meetings. The Board also monitors the Company's share price relative to the NAV.
Financial obligations - the ability of the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Manager together with the assets and liabilities of the Company and reviews these at each Board meeting. In addition, ASFML, as alternative investment fund manager in conjunction with the Board, has set an overall leverage limit of 2.0x on a commitment basis (2.5x on a gross notional basis) and provides regular updates to the Board (see page 83 of the published Annual Report).
Financial and Regulatory - the financial risks associated with the portfolio, including the impact of movements in foreign currency exchange rates, could result in losses to the Company. In addition, failure to comply with relevant regulation (including the Companies Act, the Corporation Taxes Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the FCA's Listing Rules, Disclosure and Prospectus Rules) may have an impact on the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated in conjunction with the Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 17 to the financial statements. The Board relies upon the Standard Life Aberdeen Group to ensure the Company's compliance with applicable regulations and from time to time employs external advisers to advise on specific concerns.
Operational - the Company is dependent on third parties for the provision of all systems and services (in particular, those of the Standard Life Aberdeen Group) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board receives reports from the Manager on internal controls and risk management at each Board meeting. It receives assurances from all its significant service providers including the depositary, as well as back to back assurance from the Manager at least annually. Further details of the internal controls which are in place are set out in the Directors' Report on pages 36 to 38 of the published Annual Report.

Viability Statement

The Company does not have a fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle but, for the purposes of this viability statement, has decided that a period of five years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than five years.

In assessing the viability of the Company over the review period, the Directors have focused upon the following factors:

-    The principal risks detailed in the Strategic Report on pages 16 and 17 of the published Annual Report;

-    The ongoing relevance of the Company's investment objective in the current environment;

-    The demand for the Company's shares evidenced by the historical level of premium and/or discount;

-    The level of income generated by the Company;

-    The liquidity of the Company's portfolio; and

-    The profile of the Company's £185 million loan facilities which mature between May 2019 and May 2023.

As an investment trust, investing in a global equity portfolio, the Company's portfolio is unlikely to be adversely impacted as a direct result of Brexit although there may be significant currency volatility combined with potential issues surrounding the certainty and/or timing of withholding tax repayments.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due for a period of five years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Promoting the Company

The Board recognises the importance of communicating the long-term attractions of your Company to prospective investors both for improving liquidity and for enhancing the value and rating of the Company's shares.  The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Manager on behalf of a number of investment companies under its management. The Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. The purpose of these initiatives is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. The Company's financial contribution to the programmes is matched by the Manager.  The Manager reports quarterly to the Board providing an analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

Board Diversity Policy

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members.  The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, or disability in considering the appointment of its Directors.  However, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment and, therefore, the Company does not consider it appropriate to set diversity targets.  At 31 December 2018, there were three male Directors and three female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to Aberdeen Standard Fund Managers Limited. There are, therefore, no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined below and on page 39 of the published Annual Report.

Due to the nature of the Company's business, being a Company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover.  The Company, therefore, is not required to make a slavery and human trafficking statement.

Socially Responsible Investment Policy

The Company supports the UK's Stewardship Code, and seeks to play its role in supporting good stewardship of the companies in which it invests. While the delivery of stewardship activities has been delegated to the Manager, the Board acknowledges its role in setting the tone for the effective delivery of stewardship on the Company's behalf.

Further details on stewardship may be found on page 39 of the published Annual Report.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Kevin Carter

Chairman

7 March 2019

5.    EXTRACTS FROM THE DIRECTORS' REPORT

The Directors present their report and the audited financial statements for the year ended 31 December 2018.

Results and Dividends

Details of the Company's results and proposed dividends are shown on pages 19 and 4 of the published Annual Report.

Investment Trust Status

The Company is registered as a public limited company (registered in Scotland No. SC006705) and has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 January 2012.  The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 December 2018 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure

The Company's capital structure is summarised in note 14 to the financial statements.  At 31 December 2018, there were 128,143,545 fully paid Ordinary shares of 25p each (2017 - 127,785,880 Ordinary shares) in issue.  At the year end there were an additional 406,531 Ordinary shares held in Treasury (2017 - 764,196).

Share Issuance and Buybacks

During the year 357,665 Ordinary shares were sold from Treasury all at a premium to the prevailing NAV per share (2017 - 301,642); no Ordinary shares were purchased in the market for Treasury or cancellation (2017 - nil).  Subsequent to the year end, a further 406,531 Ordinary shares have been sold from Treasury and 196,500 new Ordinary shares have been allotted under the Company's blocklisting, all at a premium to the prevailing NAV per share.

Share Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends and on a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

Borrowings

On 31 May 2018, the Company agreed a new £60 million loan facility with RBSI which was drawn in full and fixed for five years at an all-in rate of 2.328%. The new facility was used to repay a maturing £60 million loan with RBSI. In May 2019 a further £15 million loan with RBSI is due to mature and the Directors are in the process of reviewing options to replace that facility.

Management and Secretarial Arrangements

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML"), a wholly owned subsidiary of Standard Life Aberdeen PLC, as its alternative investment fund manager under the terms of an investment management agreement dated 14 July 2014 (as amended). Under the terms of the agreement, the Company's portfolio is managed by Aberdeen Asset Managers ("AAM") by way of a group delegation agreement in place between ASFML and AAM. Investment management services are provided to the Company by ASFML. Company secretarial, accounting and administrative services have been delegated by ASFML to Aberdeen Asset Management PLC.

With effect from 1 January 2019, the Board and the Manager have agreed a new fee level for calculating the Company's management fees payable to ASFML.  The annual management fee will continue to be charged on net assets (ie excluding borrowings for investment purposes), averaged over the six previous quarters ("Net Assets"), but on an amended tiered basis. The annual management fee from 1 January 2019 is now charged at 0.5% of Net Assets up to £1,200m and 0.425% of Net Assets above £1,200m.  For the year ended 31 December 2018, the annual management fee was charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million.

The secretarial fee of £100,000 per annum is included within the first tier of the annual management fee and is chargeable 100% to revenue.  A fee of 1.5% per annum remains chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. No fees are charged in the case of investments managed or advised by the Standard Life Aberdeen Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due up to that date.

The Board considers the continued appointment of the Manager on the terms agreed to be in the interests of the shareholders as a whole because the Standard Life Aberdeen Group has the investment management, secretarial, promotional and administrative skills and expertise required for the effective operation of the Company.

The Board

The Board currently consists of six non-executive Directors.  The names and biographies of the current Directors are disclosed on pages 30 to 32 of the published Annual Report indicating their range of experience as well as length of service. Mr Best retired from the Board on 26 April 2018. 

Ms Binyon was appointed to the Board on 1 May 2018 and, being eligible, offers herself for election at the first AGM following her appointment.  The other Directors will retire at the AGM in April 2019 and each Director will stand for re-election. The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively. 

In common with most investment trusts, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company. The Company's Articles of Association provide an indemnity to the Directors out of the assets of the Company against any liability incurred in defending proceedings or in connection with any application to the Court in which relief is granted.

Management of Conflicts of Interest

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 20 to the financial statements. No Directors had any other interest in contracts with the Company during the period or subsequently.

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest, as required by the Companies Act 2006. As part of this process, the Directors are required to disclose other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with their wider duties is affected. Each Director is required to notify the Company Secretary of any potential or actual conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The Manager also adopts a group-wide zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the Manager's anti-bribery and corruption policies are available on its website.

In relation to the corporate offence of failing to prevent tax evasion, it is the Company's policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships. 

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 December 2018:

Shareholder	No. of Ordinary shares held	% held
Aberdeen Standard Retail Plans A	9,831,853	7.7
Speirs & Jeffrey	9,427,833	7.4
Hargreaves Lansdown A	8,144,158	6.4
Alliance Trust Savings A	6,682,369	5.2
Investec Wealth & Management	6,662,577	5.2
Charles Stanley	6,234,860	4.9
Rathbones	5,540,565	4.3
Smith & Williamson Wealth Management	4,810,839	3.8
Brewin Dolphin	4,138,304	3.2

^A Non-beneficial interests

There have been no significant changes notified in respect of the above holdings between 31 December 2018 and 7 March 2019.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and, as required by the Listing Rules of the UK Listing Authority, has applied the principles identified in the UK Corporate Governance Code (published in April 2016) for the year ended 31 December 2018. The UK Corporate Governance Code is available on the Financial Reporting Council's website: frc.org.uk. 

The Board has considered the principles and recommendations of the AIC Code of Corporate Governance (AIC Code) by reference to the AIC Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues which are of specific relevance to the Company. Both the AIC Code and the AIC Guide are available on the AIC's website: theaic.co.uk.

The Company has complied throughout the accounting period with the relevant provisions contained within the AIC Code and the relevant provisions of the UK Corporate Governance Code except as set out below.

The UK Corporate Governance Code includes provisions relating to:

-       the role of the chief executive (A.1.2);

-       executive directors' remuneration (D.2.1 and D.2.2);

-       and the need for an internal audit function (C.3.5).

For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions. The full text of the Company's Corporate Governance Statement can be found on the Company's website, murray-intl.co.uk.  As indicated in the Chairman's Statement, the Company will report its compliance with the AIC's updated 2019 Code of Corporate Governance which is endorsed by the new FRC UK Code of Corporate Governance, for the year ending 31 December 2019.

Directors have attended Board and Committee meetings during the year ended 31 December 2018 as follows (with their eligibility to attend the relevant meeting in brackets):

	Board	Other Board	Nom Com	Audit Com	MEC/ Rem
K J Carter (A)	6 (6)	2 (2)	1 (1)	n/a	2 (2)
C. Binyon (B)	4 (4)	1 (1)	0 (0)	2 (2)	1 (1)
M Campbell	6 (6)	2 (2)	1 (1)	3 (3)	2 (2)
P W Dunscombe	6 (6)	2 (2)	1 (1)	3 (3)	2 (2)
D Hardie	6 (6)	2 (2)	1 (1)	3 (3)	2 (2)
A Mackesy	6 (6)	2 (2)	1 (1)	3 (3)	2 (2)
J D Best (C)	0 (2)	1 (1)	0 (1)	0 (1)	0 (1)

(A) Dr Carter is not a member of either the Audit Committee or the Remuneration Committee but attended all Committee meetings by invitation

(B) Ms Binyon was appointed to the Board on 1 May 2018

(C) Mr Best retired from the Board on 26 April 2018

Board Committees

Terms of Reference

The terms of reference of all the Board Committees may be found on the Company's website murray-intl.co.uk and copies are available from the Company Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an annual basis.

Audit Committee

The Report of the Audit Committee is on pages 43 and 44 of the published Annual Report.

Management Engagement Committee (MEC)

The MEC comprises all of the Directors. Dr Carter is the Chairman. The Committee reviews the performance of the Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms that have been agreed is in the interests of shareholders as a whole.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises the entire Board and is chaired by Dr Carter. The Board's overriding priority in appointing new Directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The Board also recognises the benefits of diversity and its policy on diversity is referred to in the Strategic Report.  When Board positions become available as a result of retirement or resignation, the Company ensures that a diverse group of candidates is considered.

During the year the Company undertook a search for a new independent non executive Director culminating in the appointment of Ms Binyon on 1 May 2018.  The search was conducted by Norman Broadbent Executive Search Limited, an independent external recruitment agent that has no other connections with the Company.

The Committee has put in place the necessary procedures to conduct, on an annual basis, an appraisal of the Chairman of the Board, Directors' individual self evaluation and a performance evaluation of the Board as a whole. An external evaluation was undertaken during the year by Stephenson & Co. an independent external board evaluation service provider that does not have any other connections with the Company.  This external evaluation concluded that the Board has a good balance of experience and knowledge of investment markets and continues to work in a collegiate and effective manner. 

The Board's policy on tenure is that Directors need not serve on the Board for a limited period of time only. The Board does not consider that the length of service of a Director is as important as the contribution he or she has to make, and therefore the length of service will be determined on a case-by-case basis.

In accordance with Principle 3 of the AIC's Code of Corporate Governance which recommends that the directors of FTSE 350 companies should be subject to annual re-election by shareholders, with the exception of Ms Binyon (who will retire and offer herself for election), all the members of the Board will retire at the forthcoming Annual General Meeting and will offer themselves for re-election.  In conjunction with the evaluation feedback, the Committee has reviewed each of the proposed reappointments and concluded that each of the Directors has the requisite high level and range of business and financial experience and recommends their re-election at the forthcoming AGM. 

Remuneration Committee

The level of fees payable to Directors is considered by the Remuneration Committee which comprises the entire Board excluding Dr Carter and which is chaired by Mr Hardie.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. Further information on remuneration is disclosed in the Directors' Remuneration Report on pages 40 to 42 of the published Annual Report.

Going Concern

The Directors have undertaken a robust review of the Company's viability (refer to statement on pages 17 and 18 of the published Annual Report) and ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares and bonds. The equities and a majority of the bond portfolio are, in most circumstances, realisable within a very short timescale.

The Company has a £15 million loan facility with RBS which is due to mature in May 2019.  The Directors are currently reviewing options to replace the facility. However, at this stage it is too early to confirm that the facility will be renewed. If acceptable terms are available from the existing bankers, or any alternative, the Company expects to continue to access a similarly sized facility. However, should the Board decide not to replace the facility any maturing debt would be repaid through the proceeds of equity and/or bond sales.

The Directors are mindful of the principal risks and uncertainties disclosed on pages 16 and 17 of the published Annual Report and have reviewed forecasts detailing revenue and liabilities.  The Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's auditor is unaware, and he or she has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Independent Auditor

Ernst & Young LLP ("EY") has expressed its willingness to continue in office and a Resolution to re-appoint EY as the Company's auditor will be put to the forthcoming Annual General Meeting, along with a separate Resolution to authorise the Directors to fix the auditor's remuneration. Details of fees relating to non-audit services and the auditor's tenure are disclosed on pages 43 and 44 of the published Annual Report. 

Internal Controls and Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 17 to the financial statements. The Board of Directors is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. Following the Financial Reporting Council's publication of "Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the full year under review and up to the date of approval of the financial statements, and this process is regularly reviewed by the Board and accords with the relevant sections of the FRC Guidance.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and to manage its affairs properly extends to operational and compliance controls and risk management. The Board has prepared its own risk register which identifies potential risks relating to strategy, investment management, shareholders, marketing, gearing, regulatory and financial obligations, third party service providers and the Board.  The Board considers the potential cause and possible impact of these risks as well as reviewing the controls in place to mitigate these potential risks. A risk is rated by having a likelihood and an impact rating and the residual risk is plotted on a "heat map" and is reviewed at least twice a year.

The Board has reviewed the effectiveness of the system of internal control and, in particular, it has reviewed the process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to ASFML within overall guidelines and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by ASFML's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the Manager's activities. Risk is considered in the context of the FRC Guidance and includes financial, regulatory, market, operational and reputational risk. This helps the Manager's internal audit risk assessment model to identify those functions for review. Any relevant weaknesses identified through internal audit's review are reported to the Board and timetables are agreed for implementing improvements to systems, processes and controls. The implementation of any remedial action required is monitored and feedback provided to the Board.

The key components designed to provide effective internal control for the year under review and up to the date of this Report are outlined below:

-    the Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its investment performance;

-    the Board and Manager have agreed clearly defined investment criteria;

-    there are specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board. The Manager's investment process and financial analysis of the companies concerned include detailed appraisal and due diligence;

-    as a matter of course the internal audit and compliance departments of ASFML continually review the Manager's operations;

-    written agreements are in place which specifically define the roles and responsibilities of the Manager and other third party service providers and monitoring reports are received from these providers when required;

-    the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place at the Manager, has decided to place reliance on the Manager's systems and internal audit procedures; and

-    twice a year, at its Board meetings, the Board carries out an assessment of internal controls by considering documentation from the Manager, including its internal audit and compliance functions and taking account of events since the relevant period end.

In addition, the Manager ensures that clearly documented contractual arrangements exist in respect of any activities that have been delegated to external professional organisations.  The Board meets annually with representatives from BNY Mellon and reviews a control report covering the activities of the depositary and custodian. 

Representatives from the Internal Audit Department of the Manager report six monthly to the Audit Committee of the Company and have direct access to the Directors at any time.

The Board has reviewed the effectiveness of the Manager's system of internal control including its annual internal controls report prepared in accordance with the International Auditing and Assurance Standards Board's International Standard on Assurances Engagements ("ISAE") 3402, "Assurance Reports on Controls at a Service Organisation". The Board has also reviewed the Manager's process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.  The internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and, by their nature, can provide reasonable but not absolute assurance against material misstatement or loss.

Discount Management Policy and Special Business at Annual General Meeting

Issue of Shares

In terms of the Companies Act 2006 (the "Act"), the Directors may not allot shares unless so authorised by the shareholders. Resolution 12 in the Notice of Annual General Meeting which will be proposed as an Ordinary Resolution will, if passed, give the Directors the necessary authority to allot shares up to an aggregate nominal amount of £3,218,664 (equivalent to 12,874,657 Ordinary shares or 10% of the Company's existing issued share capital at 7 March 2019, the latest practicable date prior to the publication of this Annual Report). Such authority will expire on the date of the next Annual General Meeting or on 30 June 2020, whichever is earlier. This means that the authority will have to be renewed at the next Annual General Meeting.

When shares are to be allotted for cash, Section 561 of the Act provides that existing shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing shareholders. Special Resolution 13 will, if passed, also give the Directors power to allot for cash equity securities up to an aggregate nominal amount of £3,218,664 (equivalent to 12,874,657 Ordinary shares or 10% of the Company's existing issued share capital at 7 March 2019, the latest practicable date prior to the publication of this Annual Report), as if Section 561 of the Act does not apply. This is the same nominal amount of share capital which the Directors are seeking the authority to allot pursuant to Resolution 12. This authority will also expire on the date of the 2020 Annual General Meeting or on 30 June 2020, whichever is earlier. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authority given by Resolutions 12 and 13 to allot shares and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. Accordingly, issues will only be made where shares can be issued at a premium of 0.5% or more to NAV and there will never be any dilution for existing shareholders.  The issue proceeds will be available for investment in line with the Company's investment policy. No issue of shares will be made which would effectively alter the control of the Company without the prior approval of shareholders in general meeting. Resolution 12 will also disapply pre-emption rights on the sale of Treasury shares as envisaged above. Once again, the pre-emption rights would only be disapplied where the Treasury shares are sold at a premium to NAV of not less than 0.5%.

Share Buybacks

At the Annual General Meeting held on 26 April 2018, shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares.

The Directors wish to renew the authority given by shareholders at the last Annual General Meeting. The principal aim of a share buyback facility is to enhance shareholder value by acquiring shares at a discount to NAV, as and when the Directors consider this to be appropriate. The purchase of shares, when they are trading at a discount to NAV per share, should result in an increase in the NAV per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the NAV per share for the remaining shareholders and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the Annual General Meeting.

Under the Listing Rules, the maximum price that may be paid on the exercise of this authority must not be more than the higher of (i) an amount equal to 105% of the average of the middle market quotations for a share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the share is purchased; and (ii) the higher of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 25p per share.

It is currently proposed that any purchase of shares by the Company will be made from the capital reserve of the Company. The purchase price will normally be paid out of the cash balances held by the Company from time to time.

Special Resolution 14 will permit the Company to buy back shares and any shares bought back by the Company may be cancelled or held as Treasury shares. The benefit of the ability to hold Treasury shares is that such shares may be resold. This should give the Company greater flexibility in managing its share capital and improve liquidity in its shares. The Company would only sell on Treasury shares at a premium to NAV. When shares are held in Treasury, all voting rights are suspended and no distribution (either by way of dividend or by way of a winding up) is permitted in respect of Treasury shares. If the Directors believe that there is no likelihood of re-selling shares bought back, such shares would be cancelled.

Special Resolution 14 in the Notice of Annual General Meeting will renew the authority to purchase in the market a maximum of 14.99% of shares in issue at the date of the Annual General Meeting (amounting to 19,299,111 Ordinary shares as at 7 March 2019). Such authority will expire on the date of the 2020 Annual General Meeting or on 30 June 2020, whichever is earlier. This means in effect that the authority will have to be renewed at the next Annual General Meeting or earlier if the authority has been exhausted.

Recommendation

The Directors consider that the authorities granted above are in the best interests of the shareholders taken as a whole and recommend that all shareholders vote in favour of the resolutions, as the Directors intend to in respect of their own beneficial holdings of Ordinary shares amounting in aggregate to 81,824 shares, representing approximately 0.06% of the Company's issued share capital as at 7 March 2019.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Manager.

The full text of the Company's response to the Stewardship Code may be found on the Company's website.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Manager's freephone information service and the Company's website (murray-intl.co.uk). The Company responds to letters from shareholders on a wide range of issues.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the Standard Life Aberdeen Group (either the Company Secretary or the Manager) in situations where direct communication is required and usually a representative from the Board meets with major shareholders on an annual basis in order to gauge their views.

Responsible Investment

The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. The Manager considers social, environmental and ethical factors which may affect the performance or value of the Company's investments. The Directors, through the Company's Manager, encourage companies in which investments are made to adhere to best practice in the areas of Environmental, Social and Corporate Governance stewardship. They believe that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in this area.

By order of the Board of Murray International Trust PLC

Aberdeen Asset Management PLC

Secretary

40 Princes Street,

Edinburgh EH2 2BY

7 March 2019

6.  FINANCIAL HIGHLIGHTS

	31 December 2018	31 December 2017	% change
Total assets less current liabilities (before deducting prior charges)	£1,604.3m	£1,783.9m	-10.1
Equity shareholders' funds (Net Assets)	£1,419.6m	£1,599.1m	-11.2
Market capitalisation	£1,450.6m	£1,620.3m	-10.5
Share price - Ordinary share (mid market)	1,132.0p	1,268.0p	-10.7
Net Asset Value per Ordinary share	1,107.8p	1,251.4p	-11.5
Premium to Net Asset Value on Ordinary shares	2.2%	1.3%
Gearing (ratio of borrowings less cash to shareholders' funds)
Net gearing{A}	12.5%	10.7%
Dividends and earnings per Ordinary share
Revenue return per share	49.6p	51.8p	-4.2
Dividends per share{B}	51.5p	50.0p	+3.0
Dividend cover (including proposed final dividend){C}	0.96	1.04
Revenue reserves{D}	£73.6m	£75.3m
Operating costs
Ongoing charges ratio{E}	0.69%	0.64%
{A}    Considered to be an Alternative Performance Measure as defined on pages 77 and 85 of the published Annual Report.
{B}    The figure for dividends per share reflects the years to which their declaration relates (see note 8 on pages 63 and 64) and assuming approval of the final dividend of 17.0p (2017 - 17.0p).
{C}    Considered to be an Alternative Performance Measure. As defined on page 77 of the published Annual Report.
{D}    The revenue reserve figure does not take account of the third interim and final dividends amounting to £14,737,000 and £21,887,000 respectively (2017 - £14,056,000 and £21,729,000).
{E}    Considered to be an Alternative Performance Measure. Further details can be found on pages 77, 78 and 85 of the published Annual Report.

Performance (total return)

	1 year	3 year	5 year	10 year
	% return	% return	% return	% return
Share price{AB}	-6.8	+55.8	+34.3	+189.8
Net asset value per Ordinary share{A}	-7.5	+48.8	+41.3	+169.8
Benchmark	-5.2	+34.4	+48.2	+169.0
{A}        Considered to be an Alternative Performance Measure (see pages 77, 84 and 85 of the published Annual Report for more details).
{B}        Mid to mid.
Source: Aberdeen Standard Investments, Morningstar & Lipper

7.    STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

-       select suitable accounting policies and then apply them consistently;

-       make judgments and accounting estimates that are reasonable and prudent; and,

-       state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The financial statements are published on murray-intl.co.uk which is a website maintained by the Company's Manager. 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.

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

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

-    the Strategic Report and Directors' 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 the Company faces; and

-    that in the opinion of the Board, the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy.

For Murray International Trust PLC

Kevin Carter

Chairman

7 March 2019

8.    STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2018

		Year ended 31 December 2018			Year ended 31 December 2017
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments	10	-	(175,349)	(175,349)	-	150,408	150,408
Income	3	77,105	-	77,105	79,471	-	79,471
Investment management fees	4	(2,495)	(5,820)	(8,315)	(2,392)	(5,581)	(7,973)
Currency gains/(losses)		-	284	284	-	(416)	(416)
Other expenses	5	(1,963)	(18)	(1,981)	(2,044)	-	(2,044)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		72,647	(180,903)	(108,256)	75,035	144,411	219,446
Finance costs	6	(1,210)	(2,822)	(4,032)	(1,262)	(2,947)	(4,209)
		_______	_______	_______	_______	_______	_______
Return before taxation		71,437	(183,725)	(112,288)	73,773	141,464	215,237
Taxation	7	(7,868)	1,619	(6,249)	(7,628)	1,641	(5,987)
		_______	_______	_______	_______	_______	_______
Return attributable to equity shareholders		63,569	(182,106)	(118,537)	66,145	143,105	209,250
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	9	49.6	(142.2)	(92.6)	51.8	112.2	164.0
		_______	_______	_______	_______	_______	_______
The "Total" column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the return after taxation is also the total comprehensive income for the year. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.

9.    STATEMENT OF FINANCIAL POSITION

As at 31 December 2018

		As at	As at
		31 December 2018	31 December 2017
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	10	1,585,166	1,759,899
Current assets
Debtors	11	14,519	22,772
Cash and short term deposits		7,627	4,296
		_______	_______
		22,146	27,068
		_______	_______
Creditors: amounts falling due within one year
Bank loans	12,13	(15,000)	(60,000)
Other creditors	12	(3,048)	(3,103)
		_______	_______
		(18,048)	(63,103)
		_______	_______
Net current assets/(liabilities)		4,098	(36,035)
		_______	_______
Total assets less current liabilities		1,589,264	1,723,864
Creditors: amounts falling due after more than one year
Bank loans	12,13	(169,676)	(124,735)
		_______	_______
Net assets		1,419,588	1,599,129
		_______	_______
Capital and reserves
Called-up share capital	14	32,137	32,137
Share premium account		351,666	350,681
Capital redemption reserve		8,230	8,230
Capital reserve	15	953,992	1,132,829
Revenue reserve		73,563	75,252
		_______	_______
Equity shareholders' funds		1,419,588	1,599,129
		_______	_______
Net Asset Value per Ordinary share (pence)	16	1,107.8	1,251.4
		_______	_______

10.     STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2018

For the year ended 31 December 2018
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2017		32,137	350,681	8,230	1,132,829	75,252	1,599,129
Return after taxation		-	-	-	(182,106)	63,569	(118,537)
Dividends paid	8	-	-	-	-	(65,258)	(65,258)
Issue of shares from Treasury	14	-	985	-	3,269	-	4,254
		_______	______	______	_______	______	_______
Balance at 31 December 2018		32,137	351,666	8,230	953,992	73,563	1,419,588
		_______	______	______	_______	______	_______
For the year ended 31 December 2017
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2016		32,137	349,581	8,230	986,968	70,963	1,447,879
Return after taxation		-	-	-	143,105	66,145	209,250
Dividends paid	8	-	-	-	-	(61,856)	(61,856)
Issue of shares from Treasury	14	-	1,100	-	2,756	-	3,856
		_______	______	______	_______	______	_______
Balance at 31 December 2017		32,137	350,681	8,230	1,132,829	75,252	1,599,129
		_______	______	______	_______	______	_______
The accompanying notes are an integral part of these financial statements.

11.   STATEMENT OF CASH FLOWS

For the year ended 31 December 2018

		Year ended	Year ended
		31 December 2018	31 December 2017
	Notes	£'000	£'000
Net return before finance costs and taxation		(108,256)	219,446
(Decrease)/increase in accrued expenses		(58)	305
Overseas withholding tax		(6,288)	(4,631)
Interest income		(5)	(1)
Dividend income		(55,906)	(56,451)
Fixed interest income		(21,194)	(23,019)
Fixed interest income received		20,432	24,834
Dividends received		55,557	56,820
Interest received		5	1
Interest paid		(4,104)	(4,494)
Losses/(gains) on investments		175,349	(150,408)
Decrease in other debtors		21	1
Corporation tax paid		(898)	(1,077)
		________	________
Net cash inflow from operating activities		54,655	61,326
Investing activities
Purchases of investments	10	(114,399)	(158,423)
Sales of investments	10,11	124,079	155,648
		________	________
Net cash from/(used in) investing activities		9,680	(2,775)
Financing activities
Equity dividends paid	8	(65,258)	(61,856)
Issue of Ordinary shares from Treasury	14	4,254	3,856
Debenture Stock redeemed		-	(152)
Loan repayment		(60,000)	(60,000)
Loan drawdown		60,000	60,000
		________	________
Net cash used in financing activities		(61,004)	(58,152)
		________	________
Increase in cash		3,331	399
		________	________
Analysis of changes in cash during the year
Opening balance		4,296	3,897
Increase in cash as above		3,331	399
		________	________
Closing balances		7,627	4,296
		________	________
The accompanying notes are an integral part of these financial statements.

12.   NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2018
1.	Principal activity
	The Company is a closed-end investment company, registered in Scotland No SC006705, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	(a)	Basis of preparation
		The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 and updated in February 2018 with consequential amendments (applicable for accounting periods beginning on or after 1 January 2019 but adopted early). The financial statements are prepared in sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
		The Directors have, at the time of approving the financial statements, a reasonable expectation that approval as an investment trust will continue to be granted and that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is included in the Directors' Report (unaudited).
		Significant accounting judgements, estimates and assumptions
		The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. The areas requiring most significant judgement and assumption in the financial statements is the determination of the fair value hierarchy classification of quoted preference shares and bonds which have been assessed as being Level 2 due to them not being considered to trade in active markets and also the determination of whether special dividends received are considered to be revenue or capital in nature. The Directors do not consider there to be any significant estimates within the financial statements.
	(b)	Income
		Dividends receivable on equity shares are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends are recognised on their due date. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to their circumstances.
		In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income under taxation.
		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities.
		Interest receivable from cash and short-term deposits is accrued to the end of the year.
	(c)	Expenses
		All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. Expenses are charged against revenue except as follows:
		-    transaction costs on the acquisition or disposal of investments are charged against capital in the Statement of Comprehensive Income; and
		-     expenses are treated as a capital item in the Statement of Comprehensive Income and ultimately recognised in 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 30% to revenue and 70% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.
	(d)	Taxation
		The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net return as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.
		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Statement of Financial Position date.
		Due to the Company's status as an investment trust company and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
		The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year, based on the marginal basis.
	(e)	Investments
		The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use in the EU) and investments have been designated upon initial recognition at fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis.
		Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured at fair value. 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 treated in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(f)	Borrowings
		Borrowings, which comprise interest bearing bank loans are recognised initially at the fair value of the consideration received, net of any issue expenses, and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are accounted for on an accruals basis using the effective interest rate method and are charged 30% to revenue and 70% to capital in the Statement of Comprehensive Income to reflect the Company's investment policy and prospective income and capital growth.
	(g)	Nature and purpose of reserves
		Capital redemption reserve
		The capital redemption reserve arose when Ordinary shares were cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the share capital account to the capital redemption reserve.
		Capital reserve
		This reserve reflects any gains or losses on investments realised in the period along with any movement in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include gains and losses from foreign currency exchange differences. Additionally, expenses, including finance costs, are charged to this reserve in accordance with (c) and (f) above.
		When the Company purchases its Ordinary shares to be held in treasury, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from the capital reserve. Should these shares be sold subsequently, the amount received is recognised as an increase in equity, and the resulting surplus on the transaction is transferred to the share premium account or where a deficit on the transaction then it is transferred from the capital reserve.
		Revenue reserve
		This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
	(h)	Foreign currency
		Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive Income and are reflected in the revenue reserve. Gains and losses on the realisation of foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(i)	Derivative financial instruments
		Financial derivatives are measured at fair value based on an appropriate model. Changes in the fair value of derivative financial instruments are recognised in the Statement of Comprehensive Income as they arise. If capital in nature, the associated change in value is presented as a capital item in the Statement of Comprehensive Income.
	(j)	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.
	(k)	Dividends payable
		Dividends payable to equity shareholders are recognised in the financial statements when they have been approved by Shareholders and become a liability of the Company. Interim dividends are recognised in the financial statements in the period in which they are paid.

		2018	2017
3.	Income	£'000	£'000
	Income from investments
	UK dividend income	9,651	9,889
	Overseas dividends	46,255	46,562
	Overseas interest	21,194	23,019
		________	________
		77,100	79,470
		________	________
	Other income
	Deposit interest	5	1
		________	________
	Total income	77,105	79,471
		________	________
		2018	2017
	Income from investments comprises:	£'000	£'000
	Listed UK	9,651	9,889
	Listed overseas	67,449	69,581
		________	________
		77,100	79,470
		________	________

		2018			2017
		Revenue	Capital	Total	Revenue	Capital	Total
4.	Investment management fees	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	2,495	5,820	8,315	2,392	5,581	7,973
		________	________	________	________	________	________
	The Company has an agreement with Aberdeen Standard Fund Managers Limited ("ASFML") for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	The annual management fee is charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters ("Net Assets"), on a tiered basis. The annual management fee is charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million. A fee of 1.5% per annum is chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the year £8,315,000 (2017 - £7,973,000) of investment management fees was payable to the Manager, with a balance of £2,055,000 (2017 - £2,085,000) being due at the year end.
	On 20 December 2018, the Board and the Manager announced that with effect from 1 January 2019 onwards the annual fee will be charged at 0.5% of Net Assets up to £1,200 million and 0.425% of Net Assets above £1,200 million.
	Included within the management fee arrangements is a secretarial fee of £100,000 per annum which is chargeable 100% to revenue. During the year £100,000 (2017 - £100,000) of secretarial fees was payable to the Manager, with a balance of £25,000 (2017 - £25,000) being payable to ASFML at the year end.
	No fees are charged in the case of investments managed or advised by the Standard Life Aberdeen Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.

		2018	2017
5.	Other expenses	£'000	£'000
	Promotional activities{A}	425	425
	Registrars' fees	121	193
	Directors' remuneration	184	184
	Irrecoverable VAT	56	39
	Secretarial fees{B}	100	100
	Auditor's fees for:
	- Statutory audit	28	27
	- Other assurance services	2	3
	- Tax compliance{C}	-	9
	Administrative expenses{DE}	1,065	1,064
		________	________
		1,981	2,044
		________	________
	{A}    In 2018 £425,000 (2017 - £425,000) was payable to ASFML to cover promotional activities during the year. At the year end £106,000 (2017 - £106,000) was due to ASFML.
	{B}    Details of the fee basis are contained in note 4 above.
	{C}    Amount charged in 2017 relates to non-recurring work undertaken for Swedish withholding tax claims covering the period 2011 to 2016.
	{D}    Includes bank charges and custody fees of £593,000 (2017 - £488,000), depositary fees of £146,000 (2017 - £260,000), stock exchange fees of £81,000 (2017 - £70,000) and printing, postage and stationery costs of £83,000 (2017 - £54,000).
	{E}    £18,000 (2017 - £nil) relates to professional services received in connection with the redemption of the Company's debenture stock, which occurred in the prior year.

		2018			2017
		Revenue	Capital	Total	Revenue	Capital	Total
6.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdrafts	1,210	2,822	4,032	1,260	2,941	4,201
	Debenture stock	-	-	-	2	6	8
		________	________	________	________	________	________
		1,210	2,822	4,032	1,262	2,947	4,209
		________	________	________	________	________	________

			2018						2017
			Revenue	Capital		Total			Revenue	Capital	Total
7.	Taxation		£'000	£'000		£'000			£'000	£'000	£'000
	(a)	Total tax charge
		Analysis for the year
		Current UK tax	1,921	-		1,921			2,253	-	2,253
		Double taxation relief	(1,006)	-		(1,006)			(960)	-	(960)
		Tax relief to capital	1,645	(1,645)		-			1,641	(1,641)	-
		Irrecoverable overseas tax suffered	6,611	-		6,611			5,338	-	5,338
		Overseas tax reclaimable	(1,303)	26		(1,277)			(644)	-	(644)
			________	________		_______			________	________	_______
		Total tax charge for the year	7,868	(1,619)		6,249			7,628	(1,641)	5,987
			________	________		_______			________	________	_______
	(b)	Factors affecting the tax charge for the year
		The UK corporation tax rate is 19% (2017 - effective rate of 19.25%). The tax assessed for the year is lower than the corporation tax rate. The differences are explained below:
			2018					2017
			Revenue		Capital		Total	Revenue		Capital	Total
			£'000		£'000		£'000	£'000		£'000	£'000
		Return before taxation	71,437		(183,725)		(112,288)	73,773		141,464	215,237
			________		________		_______	________		________	_______
		Return multiplied by the effective standard rate of corporation tax of 19% (2017 - 19.25%)	13,573		(34,907)		(21,334)	14,201		27,232	41,433
		Effects of:
		Non taxable UK dividend income	(1,834)		-		(1,834)	(1,904)		-	(1,904)
		Gains/(losses) on investments not taxable	-		33,316		33,316	-		(28,953)	(28,953)
		Currency (gains)/losses not taxable	-		(54)		(54)	-		80	80
		Non taxable overseas dividends	(8,173)		-		(8,173)	(8,405)		-	(8,405)
		Irrecoverable overseas tax suffered	6,611		-		6,611	5,338		-	5,338
		Overseas tax reclaimable	(1,303)		26		(1,277)	(644)		-	(644)
		Double taxation relief	(1,006)		-		(1,006)	(960)		-	(960)
		Expenses not deductible for tax purposes	-		-		-	2		-	2
			________		________		_______	________		________	_______
		Total tax charge for the year	7,868		(1,619)		6,249	7,628		(1,641)	5,987
			________		________		_______	________		________	_______
		The Company has not provided for deferred tax on chargeable gains or losses arising on the revaluation or disposal of investments as it is exempt from corporation tax on these items because of its status as an investment trust company.
		The Company has not recognised a deferred tax asset (2017 - same) arising as a result of there being no excess management expenses (2017 - same) to be utilised in future periods.

		2018	2017
8.	Ordinary dividends on equity shares	£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim for 2017 of 11.0p (2016 - 10.5p)	14,057	13,386
	Final dividend for 2017 of 17.0p (2016 - 16.0p)	21,729	20,397
	First interim for 2018 of 11.5p (2017 - 11.0p)	14,736	14,030
	Second interim for 2018 of 11.5p (2017 - 11.0p)	14,736	14,043
		________	________
		65,258	61,856
		________	________
	A third interim dividend was declared on 28 November 2018 with an ex date of 3 January 2019. This dividend of 11.5p was paid on 19 February 2019 and has not been included as a liability in these financial statements. The proposed final dividend for 2018 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £63,569,000 (2017 - £66,145,000).
		2018	2017
		£'000	£'000
	Three interim dividends for 2018 of 11.5p (2017 - 11.0p)	44,209	42,129
	Proposed final dividend for 2018 of 17.0p (2017 - 17.0p)	21,887	21,729
		________	________
		66,096	63,858
		________	________
	The amount reflected above for the cost of the proposed final dividend for 2018 is based on 128,746,576 Ordinary shares, being the number of Ordinary shares in issue at the date of this Report.

		2018		2017
9.	Return per Ordinary share	£'000	p	£'000	p
	Returns are based on the following figures:
	Revenue return	63,569	49.6	66,145	51.8
	Capital return	(182,106)	(142.2)	143,105	112.2
		________	________	________	________
	Total return	(118,537)	(92.6)	209,250	164.0
		________	________	________	________
	Weighted average number of Ordinary shares		128,039,138		127,580,318
			________		________

		2018	2017
10.	Investments at fair value through profit or loss	£'000	£'000
	Opening valuation	1,759,899	1,618,893
	Opening investment holdings gains	(569,301)	(486,113)
		________	________
	Opening book cost	1,190,598	1,132,780
	Movements during the year:
	Purchases	114,399	158,423
	Sales - proceeds	(115,071)	(164,656)
	Sales - realised gains	34,516	67,220
	Accretion/(amortisation) of fixed income book cost	1,288	(3,169)
		________	________
	Closing book cost	1,225,730	1,190,598
	Closing investment holdings gains	359,436	569,301
		________	________
	Closing valuation	1,585,166	1,759,899
		________	________
		2018	2017
	The portfolio valuation	£'000	£'000
	Listed on stock exchanges:
	United Kingdom:
	- equities	161,681	214,280
	- preference shares	6,721	8,652
	Overseas:
	- equities	1,160,004	1,264,226
	- fixed income	256,760	272,741
		________	________
	Total	1,585,166	1,759,899
		________	________
		2018	2017
	(Losses)/gains on investments	£'000	£'000
	Realised gains based on book cost	34,516	67,220
	Net movement in investment holdings gains	(209,865)	83,188
		________	________
		(175,349)	150,408
		________	________
	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in the Statement of Comprehensive Income. The total costs were as follows:
		2018	2017
		£'000	£'000
	Purchases	88	80
	Sales	105	97
		________	________
		193	177
		________	________
	The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company's Key Information Document are calculated on a different basis and in line with the PRIIPs regulations.

		2018	2017
11.	Debtors: amounts falling due within one year	£'000	£'000
	Overseas withholding tax	2,302	1,225
	Amounts due from brokers	-	9,008
	Other debtors	46	67
	Accrued income	12,171	12,472
		________	________
		14,519	22,772
		________	________
	None of the above amounts are overdue or impaired.

		2018	2017
12.	Creditors	£'000	£'000
	Amounts falling due within one year:
	Bank loans (note 13)	15,000	60,000
	Corporation tax payable	233	216
	Accruals	2,815	2,887
		________	________
		18,048	63,103
		________	________
		2018	2017
		£'000	£'000
	Amounts falling due after more than one year:
	Bank loans and Debentures (note 13)	169,676	124,735
		________	________
	All financial liabilities are measured at amortised cost.

				2018	2017
13.	Bank loans		£'000		£'000
	Unsecured bank loans repayable within one year:
	-	£60,000,000 at 2.575% - 31 May 2018		-	60,000
	-	£15,000,000 at 1.467% - 16 May 2019		15,000	-
	Unsecured bank loans repayable in more than one year but no more than five years:
	-	£15,000,000 at 1.467% - 16 May 2019		-	15,000
	-	£50,000,000 at 2.4975% - 13 May 2020		50,000	50,000
	-	£60,000,000 at 1.714% - 31 May 2022		59,795	59,735
	-	£60,000,000 at 2.328% - 31 May 2023		59,881	-
				________	________
				184,676	184,735
				________	________
	During 2018 the Company entered into a new £60,000,000 loan facility agreement with The Royal Bank of Scotland plc ("RBS"), due on 31 May 2023, incurring an arrangement fee of £135,000. This expense will be amortised over the life of the loan.
	The terms of these loans permit early repayment at the borrower's option which may give rise to additional amounts being either payable or repayable in respect of fluctuations in interest rates since drawdown. Since the Directors currently have no intention of repaying the loans early, then no such charges are included in the cash flows used to determine their effective interest rate.
	The Company currently has four fixed rate term loan facilities with RBS, all of which are fully drawn down and have maturity dates of 16 May 2019, 13 May 2020, 31 May 2022 and 31 May 2023 respectively. Financial covenants contained within the relevant loan agreements provide, inter alia, that borrowings shall at no time exceed 40% of net assets and that the net assets must exceed £600 million. At 31 December 2018 net assets were £1,419,588,000 and borrowings were 13.0% thereof. The Company has complied with all financial covenants throughout the year.

		2018		2017
14.	Share capital	Number	£'000	Number	£'000
	Allotted, called up and fully paid Ordinary shares of 25p each:
	Balance brought forward	127,785,880	31,946	127,484,238	31,871
	Ordinary shares issued from Treasury in the year	357,665	90	301,642	75
		________	________	________	________
	Balance carried forward	128,143,545	32,036	127,785,880	31,946
		________	________	________	________
	Treasury shares:
	Balance brought forward	764,196	191	1,065,838	266
	Ordinary shares issued from Treasury in the year	(357,665)	(90)	(301,642)	(75)
		________	________	________	________
	Balance carried forward	406,531	101	764,196	191
		________	________	________	________
	During the year no Ordinary shares were repurchased by the Company (2017 - none). Shares held in Treasury represent 0.3% of the Company's total issued share capital at 31 December 2018 (31 December 2017 - 0.6%).
	During the year 357,665 (2017 - 301,642), Ordinary shares were issued from Treasury. All these shares were issued at a premium to net asset value, enhancing net assets per share for existing shareholders. The issue prices ranged from 1170p to 1254p (2017 - 1230p to 1309p) and raised a total of £4,254,000 (2017 - £3,856,000) net of expenses. Following the year end a further 406,531 Ordinary shares were issued from Treasury at prices ranging from 1163p to 1189p raising £4,771,000, net of expenses and 196,500 new Ordinary shares were allotted under the Company's blocklisting at prices ranging from 1190p to 1208p raising £2,356,000, net of expenses. .
	On a winding up of the Company, any surplus assets available after payment of all debts and satisfaction of all liabilities of the Company shall be applied in repaying the Ordinary shareholders the amounts paid up on such shares. Any surplus shall be divided among the holders of Ordinary shares according to the amount paid up on such shares respectively.
	Voting rights
	In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for every 25p nominal amount of Ordinary shares held.

		2018	2017
15.	Capital reserve	£'000	£'000
	At 31 December 2017	1,132,829	986,968
	Movement in fair value gains	(175,349)	150,408
	Capital expenses	(7,041)	(6,887)
	Issue of shares from Treasury	3,269	2,756
	Currency gains/(losses)	284	(416)
		________	________
	At 31 December 2018	953,992	1,132,829
		________	________
	Included in the total above are investment holdings gains at the year end of £359,436,000 (2017 - £569,301,000).

16.	Net asset value per share
	The net asset value per share and the net asset value attributable to the Ordinary shares, at the year end calculated in accordance with the Articles of Association and FRS 102 were as follows:
		As at	As at
		31 December 2018	31 December 2017
	Attributable net assets (£'000)	1,419,588	1,599,129
	Number of Ordinary shares in issue (excluding Treasury)	128,143,545	127,785,880
	Net asset value per share (pence)	1,107.8	1,251.4

17.	Financial instruments and risk management
	The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments comprise listed equities and debt securities, cash balances, 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 may enter into derivative transactions for the purpose of managing market risks arising from the Company's activities in the form of swap contracts, forward foreign currency contracts, futures and options.
	The Board has delegated the risk management function to Aberdeen Standard Fund Managers Limited ("ASFML") under the terms of its management agreement with ASFML (further details of which are included in the Directors' Report). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors.
	Risk management framework
	The directors of ASFML collectively assume responsibility for ASFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	ASFML is a fully integrated member of the Standard Life Aberdeen Group, which provides a variety of services and support to ASFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The AIFM has delegated the day to day administration of the investment policy to Aberdeen Asset Managers Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.
	The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the Chief Executive Officers of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").
	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group's Chief Executive Officers and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.
	The Group's corporate governance structure is supported by several committees to assist the board of directors of Standard Life Aberdeen plc, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.
	Risk management
	The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, foreign currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
	(i)	Market risk
		The fair value and future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, foreign currency risk and price risk.
		Interest rate risk
		Interest rate risk is the risk that interest rate movements will affect:
		- the fair value of the investments in fixed interest rate securities; and
		- the level of income receivable on cash deposits;
		Management of the risk
		The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.
		The Board reviews the values of the fixed interest rate securities on a regular basis.
		The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate facilities, which are used to finance opportunities at low rates. Current bank covenant guidelines are detailed in note 13.
		Interest risk profile
		The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of Financial Position date was as follows:
				Weighted
				average			Weighted										Non-
				period for			average										interest
				which			interest				Fixed			Floating			bearing
		At 31 December 2018		rate is fixed Years			rate %				rate £'000			rate £'000			bearing £'000
		Assets
		Sterling		-			-				6,721			7,587			161,681
		US Dollar		22.96			6.59				83,281			30			376,712
		Other		7.07			7.87				173,479			10			783,292
				________			________				________			________			________
		Total assets									263,481			7,627			1,321,685
											________			________			________
		Liabilities
		Bank loans		2.94			2.12				(184,676)			-			-
				________			________				________			________			________
		Total liabilities									(184,676)			-			-
											________			________			________
				Weighted
				average			Weighted
				period for			average										Non-
				which			interest				Fixed			Floating			interest
		At 31 December 2017		rate is fixed Years			rate %				rate £'000			rate £'000			bearing £'000
		Assets
		Sterling		-			-				8,652			4,158			214,280
		US Dollar		24.01			6.59				90,179			135			481,808
		Other		8.18			7.93				182,562			3			782,418
				________			________				________			________			________
		Total assets									281,393			4,296			1,478,506
											________			________			________
		Liabilities
		Bank loans		2.32			2.19				(184,735)			-			-
				________			________				________			________			________
		Total liabilities									(184,735)			-			-
											________			________			________
		The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity dates of the Company's loans are shown in note 13 to the financial statements.
		The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
		The non-interest bearing assets represent the equity element of the portfolio.
		Short-term debtors and creditors have been excluded from the above tables as they are not considered to be exposed to interest rate risk.
		Interest rate sensitivity
		The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the Statement of Financial Position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.
		If interest rates had been 100 basis points higher or lower (based on the current parameter used by the Manager's Investment Risk Department on risk assessment) and all other variables were held constant, the Company's:
		-    revenue return for the year ended 31 December 2018 would increase/decrease by £76,000 (2017 - increase/decrease by £43,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances. These figures have been calculated based on cash positions at each year end.
		-    capital return would decrease/increase by £13,307,000 (2017 - increase/decrease by £8,723,000). This is also mainly attributable to the Company's exposure to interest rates on cash balances and its fixed interest portfolio. These figures have been calculated based on cash and fixed interest portfolio positions at each year end.
		Foreign currency risk
		A significant proportion of the Company's investment portfolio is invested overseas 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 investment holdings can result, indirectly, in changes in their valuations. Consequently the Statement of Financial Position can be affected by movements in exchange rates.
		Management of the risk
		It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. The Manager seeks, when deemed appropriate, to manage exposure to currency movements on borrowings by using forward foreign currency contracts as a hedge against potential foreign currency movements. At 31 December 2018 the Company did not have any forward foreign currency contracts (2017 - none).
		The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.
		Currency risk exposure
		Currency risk exposure (excluding fixed interest securities) by currency of denomination:
			31 December 2018									31 December 2017
			UK and									UK and
			overseas			Net		Total				overseas			Net		Total
			equity			monetary		currency				equity			monetary		currency
			investments			assets{A}		exposure				investments			assets{A}		exposure
			£'000			£'000		£'000				£'000			£'000		£'000
		US Dollar	376,712			30		376,742				481,808			135		481,943
		Taiwan Dollar	123,126			9		123,135				138,489			3		138,492
		Mexican Peso	89,876			-		89,876				20,275			-		20,275
		Indonesian Rupiah	63,481			-		63,481				84,398			-		84,398
		Japanese Yen	60,367			-		60,367				75,765			-		75,765
		Swiss Franc	58,841			-		58,841				56,126			-		56,126
		Euro	51,806			-		51,806				90,962			-		90,962
		Singapore Dollar	49,702			-		49,702				58,395			-		58,395
		Malaysian Ringgit	49,357			-		49,357				43,300			-		43,300
		Thailand Baht	46,204			-		46,204				36,043			-		36,043
		Canadian Dollar	42,723			-		42,723				56,628			-		56,628
		Swedish Krone	37,899			-		37,899				21,270			-		21,270
		Hong Kong Dollar	36,711			-		36,711				35,487			-		35,487
		New Zealand Dollar	22,619			-		22,619				20,409			-		20,409
		Polish Zloty	15,947			-		15,947				-			-		-
		Australian Dollar	12,796			-		12,796				13,908			-		13,908
		Brazilian Real	12,125			-		12,125				13,037			9,009		22,046
		South African Rand	9,712			-		9,712				17,926			-		17,926
		Indian Rupee	-			1		1				-			-		-
			________			________		________				________			________		________
			1,160,004			40		1,160,044				1,264,226			9,147		1,273,373
		Sterling	161,681			(177,089)		(15,408)				214,280			(180,577)		33,703
			________			________		________				________			________		________
		Total	1,321,685			(177,049)		1,144,636				1,478,506			(171,430)		1,307,076
			________			________		________				________			________		________
		{A}        Reflects cash, short term deposits and bank borrowings.
		The asset allocation between specific markets can vary from time to time based on the Manager's opinion of the attractiveness of the individual markets.
		Foreign currency sensitivity
		The following table details the Company's sensitivity to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the major foreign currencies in which the Company has exposure (based on exposure >5% of total exposure). The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates.
														2018			2017
														Capital{A}			Capital{A}
														£'000			£'000
		US Dollar												37,671			48,181
		Taiwan Dollar												12,313			13,849
		Mexican Peso												8,988			-
		Euro												-			9,096
		Indonesian Rupiah												-			8,440
		Japanese Yen												-			7,577
														________			________
		Total												58,972			87,143
														________			________
		{A} Represents equity exposures to the relevant currencies.
		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. The Company's stated objective is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.
		Management of the risk
		It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed on page 13 of the published Annual Report, 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. The investments held by the Company are listed on various stock exchanges worldwide.
		Price risk sensitivity
		If market prices at the Statement of Financial Position date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 December 2018 would have increased/decreased by £132,169,000 (2017 - increase/decrease of £147,851,000) and equity would have increased/decreased by the same amount.
		Liquidity risk
		This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they fall due in line with the maturity profile analysed below.
					Within		Within		Within			Within		Within		More than
					1 year		1-2 years		2-3 years			3-4 years		4-5 years		5 years		Total
		At 31 December 2018			£'000		£'000		£'000			£'000		£'000		£'000		£'000
		Bank loans			15,000		50,000		-			60,000		60,000		-		185,000
		Interest cash flows on bank loans			3,776		3,061		2,425			1,910		697		-		11,869
		Cash flows on other creditors			2,815		-		-			-		-		-		2,815
					______		______		______			______		______		______		______
					21,591		53,061		2,425			61,910		60,697		-		199,684
					______		______		______			______		______		______		______
					Within		Within		Within			Within		Within		More than
					1 year		1-2 years		2-3 years			3-4 years		4-5 years		5 years		Total
		At 31 December 2017			£'000		£'000		£'000			£'000		£'000		£'000		£'000
		Bank loans			60,000		15,000		50,000			-		60,000		-		185,000
		Interest cash flows on bank loans			2,497		2,383		1,657			1,028		513		-		8,078
		Cash flows on other creditors			2,887		-		-			-		-		-		2,887
					______		______		______			______		______		______		______
					65,384		17,383		51,657			1,028		60,513		-		195,965
					______		______		______			______		______		______		______
		Management of the risk
		Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan and overdraft facilities (note 13).
		Credit risk
		This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
		Management of the risk
		-       where the Manager makes an investment in a bond, corporate or otherwise, the credit ratings of the issuer are taken into account so as to manage the risk to the Company of default;
		-       investments in quoted bonds are made across a variety of industry sectors and geographic markets so as to avoid concentrations of credit risk;
		-       transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;
		-       investment transactions are carried out with a number of brokers, whose credit-standing is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;
		-       the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the daily review of failed trade reports. In addition, both stock and cash reconciliations to the custodian's records are performed daily to ensure discrepancies are investigated in a timely manner. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee;
		-       cash is held only with reputable banks with acceptable credit quality. 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.
		Credit risk exposure
		In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 December 2018 was as follows:
						2018								2017
						Balance				Maximum				Balance			Maximum
						Sheet				exposure				Sheet			exposure
						£'000				£'000				£'000			£'000
		Non-current assets
		Quoted preference shares and bonds at fair value through profit or loss				263,481				263,481				281,393			281,393
		Current assets
		Current taxation				2,302				2,302				1,225			1,225
		Amounts due from brokers				-				-				9,008			9,008
		Other debtors				46				46				67			67
		Accrued income				12,171				12,171				12,472			12,472
		Cash and short term deposits				7,627				7,627				4,296			4,296
						________				________				________			________
						285,627				285,627				308,461			308,461
						________				________				________			________
		None of the Company's financial assets is secured by collateral or other credit enhancements.
		Credit ratings
		The table below provides a credit rating profile using Moodys credit ratings for the quoted preference shares and bonds at 31 December 2018 and 31 December 2017:
													2018				2017
													£'000				£'000
		A3											24,114				23,821
		Ba1											-				19,922
		Ba2											29,662				31,578
		Baa2											60,256				12,858
		Ba3											11,557				12,468
		Baa3											72,079				111,654
		Non-rated											65,813				69,092
													263,481				281,393
		At 31 December 2018 Moodys credit ratings agency did not provide a rating for Ecuador bonds, Indian bonds, Turkish bonds and Irredeemable preference shares (2017 - Indian bonds, Turkish bonds and Irredeemable preference shares) held by the Company and were accordingly categorised as non-rated in the table above. Whilst a substantial proportion of the fixed interest portfolio does not have a rating provided by Moodys, the Manager undertakes an ongoing review of their suitability for inclusion within the portfolio as set out in "Delivering the Investment Policy" on page 15 of the published Annual Report and "Investment Process, Philosophy and Style" on page 13 of the published Annual Report.
		Fair values of financial assets and financial liabilities
		The fair value of borrowings has been calculated at £185,877,000 as at 31 December 2018 (2017 - £186,221,000) compared to a carrying amount in the financial statements of £184,676,000 (2017 - £184,735,000) (note 12). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. The carrying value of all other assets and liabilities is an approximation of fair value.

18.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following classifications:
	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included in Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:
				Level 1	Level 2	Level 3	Total
	As at 31 December 2018		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,321,685	-	-	1,321,685
	Quoted preference shares		b)	-	6,721	-	6,721
	Quoted bonds		b)	-	256,760	-	256,760
				________	________	________	________
	Total			1,321,685	263,481	-	1,585,166
				________	________	________	________
				Level 1	Level 2	Level 3	Total
	As at 31 December 2017		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,478,506	-	-	1,478,506
	Quoted preference shares		b)	-	8,652	-	8,652
	Quoted bonds		b)	-	272,741	-	272,741
				________	________	________	________
	Total			1,478,506	281,393	-	1,759,899
				________	________	________	________
	a)	Quoted equities
		The fair value of the Company's investments in quoted equities has 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 preference shares and bonds
		The fair value of the Company's investments in quoted preference shares and bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.

19.	Capital management policies and procedures
	The investment objective of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.
	The capital of the Company consists of bank borrowings and equity, comprising issued capital, reserves and retained earnings. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	-       the planned level of gearing which takes into account the Investment Manager's views on the market;
	-       the level of equity shares in issue; and
	-       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.
	Details of the Company's gearing facilities and financial covenants are detailed in note 13 of the financial statements. The Company does not have any other externally imposed capital requirements.

20.	Related party transactions
	Directors' fees and interests
	Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report on pages 41 and 42 of the published Annual Report.
	Transactions with the Manager
	The Company has agreements with ASFML for the provision of management, secretarial, accounting and administration services and promotional activities. Details of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
	In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 December 2018 are an abridged version of the Company's full Annual Report and financial statements, which have been approved and audited with an unqualified report. The 2017 and 2018 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498 of the Companies Act 2006. The financial information for 2017 is derived from the statutory accounts for 2017 which have been delivered to the Registrar of Companies. The 2018 financial statements will be filed with the Registrar of Companies in due course.

The Annual Report will be posted to shareholders in March 2019 and additional copies will be available from the registered office of the Company and on the Company's website, murray-intl.co.uk*

The Annual General Meeting will be held at 12.30 pm on 25 April 2019 at Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow G2 3NY.

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.

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

For Murray International Trust PLC

Aberdeen Asset Management PLC, Secretaries

7 March 2019

TWENTY LARGEST INVESTMENTS

As at 31 December 2018

			Valuation		Total	Valuation
			2018		assets{A}	2017{B}
Company		Country	£'000		%	£'000
1 (1)	Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing is one of the largest integrated circuit manufacturers in the world. The company is involved in component design, wafer manufacturing, assembly, testing and mass production of integrated circuits which are used in the computer, communication and electronics industries.		Taiwan	68,971		4.3	85,329
2 (3)	Aeroporto del Sureste ADS
Grupo Aeroporto del Sureste operates airports in Mexico. The company holds long-term concessions to manage airports in leading tourist resorts such as Cancun and Cozumel, plus cities such as Oaxaca, Veracruz and Merida.		Mexico	65,021		4.1	74,107
3 (8)	Taiwan Mobile
Taiwan Mobile is the leading provider of cellular telecommunications services in Taiwan. Although predominantly a wireless network operator, the company also sells and leases cellular telephony equipment.		Taiwan	54,155		3.4	53,160
4 (2)	Sociedad Quimica Y Minera De Chile
Quimica Y Minera produces and markets specialist fertilizers including potassium nitrate, sodium nitrate and potassium sulfate for the agricultural industry. The company also produces industrial chemicals, iodine and lithium.		Chile	52,558		3.3	76,805
5 (9)	Vale do Rio Doce{B}
Vale is one of the world's largest, fully-integrated, natural resources companies. Based in Brazil, the company produces iron-ore, manganese, alloys, gold, nickel, copper, aluminium, potash and numerous other minerals. In addition to its mining assets, Vale also owns and operates railways and maritime terminals.		Brazil & USA	47,326		3.0	43,993
6 (15)	CME Group
Based in Chicago, Illinois, CME Group operates a derivatives exchange that trades futures contracts and options, interest rates, stock indexes, foreign exchange and commodities. The exchange brings together buyers and sellers of derivatives products on its trading floor, electronic trading platform and through privately negotiated transactions.		USA	47,264		2.9	34,556
7 (12)	Verizon Communications
Verizon Communications is an integrated telecommunications company based in New York that provides wire line voice and data services, wireless services, internet services and published directory information. The Company also provides network services for the Federal Government.		USA	44,135		2.7	39,194
8 (4)	British American Tobacco{C}
British American Tobacco is the holding company for a group of companies that manufacture, market and sell cigarettes and other tobacco products. The group sells over 300 brands in approximately 180 markets around the world.		UK & Malaysia	43,953		2.7	66,935
9 (5)	Unilever Indonesia
Unilever Indonesia, a majority owned subsidiary of Unilever NV, manufactures soaps, detergents, margarine, oil and cosmetics. The company also produces dairy based foods, ice cream and tea beverages.		Indonesia	43,333		2.7	60,588
10 (6)	Daito Trust Construction
Daito Trust Construction operates building construction and property leasing businesses. The Company plans and constructs private apartments and commercial buildings mainly for land owners throughout Japan. Daito Trust also provides brokerage and maintenance services.		Japan	42,953		2.7	60,294
Top ten investments			509,669		31.8
{A}    See definition on page 85 of the published Annual Report.
{B}    Holding comprises equity and fixed income securities split £27,574,000 (2017 - £24,071,000) and £19,752,000 (2017 - £19,922,000).
{C}    Holding comprises UK and Malaysia securities split £27,500,000 (2017 - £50,180,000) and £16,453,000 (2017 - £16,755,000).
11 (10)	Total
Total is a fully integrated international energy company involved in exploration, production, refining, transportation and marketing of oil and natural gas. The company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber, paint, ink, adhesives and resins.		France		41,451	2.6	40,875
12 (14)	Roche Holdings
Roche Holdings develops and manufactures pharmaceutical and diagnostic products. The company produces prescription drugs in the areas of cardiovascular, respiratory diseases, dermatology, metabolic disorders, oncology and organ transplantation.		Switzerland		38,765	2.4	37,384
13 (7)	Philip Morris International
Spun out from the Altria Group in 2008, Philip Morris International is one of the world's leading global tobacco companies. It manufactures and sells leading recognisable brands such as Marlboro, Parliament and Virginia Slims.		USA		36,693	2.3	54,670
14 (17)	Banco Bradesco
Banco Bradesco is one of Brazil's leading banks. In addition to attracting deposits and making loans, the bank offers a full range of commercial banking services, including personal credit, mortgages, lease financing, mutual funds, securities brokerage and internet banking services. Bradesco also offers credit cards, insurance and pension funds.		Brazil		34,951	2.2	31,036
15 (20)	Public Bank
Public Bank provides a broad range of banking and financial services which include leasing, stock and futures broking, financing for purchase of licensed public vehicles, and various other financial services. The group's overseas operations outside Malaysia include branches in growth markets in Hong Kong, Sri Lanka, Laos, Cambodia and Vietnam.		Malaysia		32,904	2.0	26,544
16 (16)	Royal Dutch Shell
Royal Dutch Shell, through numerous international subsidiaries and global partnerships, explores for and produces oil, gas and petroleum products. In addition to producing fuels, chemicals and lubricants, the company owns and operates petrol filling stations worldwide.		UK		31,824	2.0	34,116
17 (13)	Singapore Telecommunications
Singapore Telecommunications is a communications company providing a diverse range of communications services including fixed-line telephony, mobile, data, internet, satellite and pay television. The company operates throughout the Asia Pacific region.		Singapore		30,277	1.9	37,835
18 (-)	BHP Group (formerly BHP Billiton)
BHP Group operates in the resource mining industry. The company focuses on minerals, metals and hydrocarbons, serving customers worldwide. The stock is listed on stock exchanges in both the UK and Australia.		Australia		26,426	1.6	24,360
19 (11)	Telus
Telus is a telecommunications company providing a variety of communication products and services. The company provides voice, data, internet and wireless services to businesses and consumers throughout Canada.		Canada		25,996	1.6	39,302
20 (-)	Intel Corporation
Intel Corporation designs, manufactures and sells computer components and related products. The Company's major products include microprocessors, chipsets, embedded processors, graphic semiconductors and systems management  related software.		USA		25,805	1.6	23,896
Top twenty investments				834,761	52.0
{A}         See definition on page 85 of the published Annual Report.
{B}         The 2017 column represents the Company's holding at 31 December 2017. Values at 31 December 2018 and 31 December 2017 may not be directly comparable due to purchases and sales which may have occurred during the year.
The value of the 20 largest investments represents 52.0% (2017 - 53.4%) of total assets. The figures in brackets denote the position at the previous year end. (-) denotes not previously in 20 largest investments.

Portfolio of Investments - Other Investments

		Valuation	Total	Valuation
		2018	assets{A}	2017{B}
Company	Country	£'000	%	£'000
Kimberly Clark de Mexico	Mexico	24,855	1.5	20,275
HSBC	UK	24,582	1.5	29,142
Tesco Lotus Retail Growth	Thailand	23,753	1.5	15,697
Auckland International Airport	New Zealand	22,619	1.4	20,409
Siam Commercial Bank	Thailand	22,451	1.4	20,347
Pepsico	USA	21,683	1.4	26,597
Telefonica Brasil	Brazil	21,263	1.3	24,869
Epiroc	Sweden	20,771	1.3	-
Standard Chartered	UK	20,368	1.3	26,078
Johnson & Johnson	USA	20,267	1.3	20,675
Top thirty investments		1,057,373	65.9
Indocement Tunggal Prakarsa	Indonesia	20,148	1.3	23,810
Novartis	Switzerland	20,076	1.2	18,741
Oversea-Chinese Bank	Singapore	19,425	1.2	20,560
MTR	Hong Kong	18,571	1.2	19,468
Swire Pacific 'B'	Hong Kong	18,140	1.1	16,019
Republic of South Africa 7% 28/02/31	South Africa	17,939	1.1	19,815
Japan Tobacco	Japan	17,414	1.1	15,471
Atlas Copco	Sweden	17,128	1.1	21,270
Schlumberger	USA	17,030	1.1	-
Samsung Electronic	Korea	16,866	1.0	-
Top forty investments		1,240,110	77.3
Nutrien	Canada	16,727	1.0	17,326
Bank Pekao	Poland	15,947	1.0	-
Republic of Indonesia 6.125% 15/05/28	Indonesia	14,353	0.9	15,884
Republic of Indonesia 7.0% 15/05/22	Indonesia	13,818	0.9	14,721
Vodafone Group	UK	13,761	0.9	21,150
United Mexican States 5.75% 05/03/26	Mexico	13,486	0.8	13,375
Petroleos Mexicanos 6.75% 21/09/47	Mexico	12,985	0.8	15,433
Coca-Cola Amatil	Australia	12,796	0.8	13,908
Federal Republic of Brazil 10% 01/01/23	Brazil	12,734	0.8	13,522
Wilson & Sons	Brazil	12,125	0.7	13,037
Top fifty investments		1,378,842	85.9
Republic of Uruguay 5.1% 18/06/50	Uruguay	12,062	0.7	12,858
Republic of Dominican 6.85% 27/01/45	Dominican Republic	11,557	0.7	12,468
Inmarsat	UK	11,379	0.7	12,270
Republic of Indonesia 8.375% 15/03/34	Indonesia	10,972	0.7	12,129
Alfa 6.875% 25/03/44	Mexico	10,786	0.7	11,125
America Movil Sab De 6.45% 05/12/22	Mexico	10,628	0.7	10,446
Ultrapar Participacoes	Brazil	10,623	0.7	16,803
Bayer	Germany	10,355	0.6	16,117
MTN	South Africa	9,712	0.6	17,926
Republic of Ecuador 7.95% 20/06/24	Ecuador	8,995	0.6	10,211
Top sixty investments		1,485,911	92.6
Federal Republic of Brazil 10% 01/01/21	Brazil	8,476	0.5	9,167
Federal Republic of Brazil 10% 01/01/25	Brazil	8,452	0.5	8,889
Power Finance Corp 7.63% 14/08/26	India	8,234	0.5	8,362
Republic of Turkey 8.0% 12/03/25	Turkey	8,088	0.5	12,915
Republic of Turkey 9.0% 24/07/24	Turkey	8,081	0.5	12,985
HDFC Bank 7.95% 21/09/26	India	7,994	0.5	8,653
Petroleos Mexicanos 5.5% 27/06/44	Mexico	7,144	0.4	8,161
Weir Group	UK	5,841	0.4	16,984
Power Finance Corp 8.2% 10/03/25	India	5,674	0.4	5,815
Housing Dev Finance Corp 8.43% 04/03/25	India	5,561	0.4	5,909
Top seventy investments		1,559,456	97.2
ICIC Bank 7.6% 07/10/23	India	4,977	0.3	-
ICIC Bank 7.42% 27/06/24	India	4,961	0.3	-
Republic of Indonesia 10% 15/02/28	Indonesia	4,564	0.3	5,067
Republic of Indonesia 9.5% 15/07/23	Indonesia	4,487	0.3	4,910
Santander 10.375% Non Cum Pref	UK	3,473	0.2	4,410
General Accident 7.875% Cum Irred Pref	UK	3,248	0.2	4,242
Total investments		1,585,166	98.8
Net current assets{A}		19,098	1.2
Total assets{C}		1,604,264	100.0
{A}    Excluding bank loans.
{B}    The 2017 column denotes the Company's holding at 31 December 2017.
{C}    See definition on page 85 of the published Annual Report.

 

END

 

 

FR CKODPFBKDQNK