Final Results

RNS Number : 3685X

Schroder Income Growth Fund PLC

18 November 2014

 



18 November 2014

ANNUAL REPORT AND ACCOUNTS

Schroder Income Growth Fund plc (the "Company") hereby submits its annual financial report for the year ended 31 August 2014 as required by the UK Listing Authority's Disclosure and Transparency Rule 4.1. 

The Company's Annual Report and Accounts for the year ended 31 August 2014 are also being published in hard copy format and an electronic copy will shortly be available to download from the Company's website http://www.schroderincomegrowthfund.com.  Please click on the following link to view the document:

The Company has submitted its Annual Report and Accounts to the National Storage Mechanism and it will shortly be available for inspection at www.hemscott.com/nsm.do.

Enquiries:

Louise Richard

Schroder Investment Management Limited                Tel: [phone]

Chairman's Statement

Revenue Return for the Year and Dividends

A key part of your Company's investment objective is to provide real growth in income, being growth of income in excess of the rate of inflation, as referenced by the Consumer Prices Index ("CPI"). The Board changed the measure of inflation against which the Company's growth in income is compared from the Retail Prices Index presented in previous years to the CPI as the CPI has become the more generally accepted measure of inflation.

During the year under review - to 31 August 2014 - this real growth of income was achieved by the declaring of dividends totalling 10.10 pence per share, amounting to an increase of 3.1% over the previous year and double the corresponding rise in the CPI of 1.5%. Given that the overall net revenue return per share rose by 6.1% during the year, £490,000 was also added to the revenue reserve, bringing it up to £3.6 million (or 5.22 pence per share) after accounting for the fourth interim dividend.

By adding to the revenue reserve in good times - and conversely drawing on it when conditions are less favourable - the Company has successfully managed to increase its dividend each year since launch in 1995, whilst also maintaining it in real (inflation-adjusted) terms over the same period.

Investment Performance

I am also pleased to report another strong year of capital performance for your Company, where the objective is to achieve capital growth as a consequence of the rising income.

During the year under review the net asset value total return rose by 14.1%, comparing favourably to the total return of 10.3% of the FTSE All-Share Index.

These results continue to build on your Company's longer-term outperformance of the FTSE All-Share Index.

Share Price Discount/Premium

The Company's share price relative to underlying net asset value continued to trade within a fairly narrow range during the year under review, standing at a discount of 3.1% at the year end, compared to a premium of 0.6% at the start of the year. The average share price discount over the 12 month period was 0.8%.

Detailed comment on the performance of your Company's assets may be found in the Manager's Review on page 6 of the 2014 Annual Report.

Alternative Investment Fund Managers ("AIFM") Directive

In accordance with the AIFM Directive, the Company has, with effect from 17 July 2014, become an Alternative Investment Fund and has appointed Schroder Unit Trusts Limited ("SUTL"), a wholly owned subsidiary of Schroders plc, as the Alternative Investment Fund Manager (the "Manager") to provide portfolio management, risk management, accounting and company secretarial services to the Company in accordance with an Alternative Investment Fund Manager Agreement (the "AIFM Agreement"). SUTL has delegated investment management, accounting and company secretarial services to another wholly owned subsidiary of Schroders plc, Schroder Investment Management Limited. While important to record, these necessary legal changes will not make any noticeable difference to the management of your Company's assets.

In addition, the Company has appointed HSBC Bank plc as its Depositary, also with effect from 17 July 2014. An additional fee of 0.01% of net assets will be payable for depositary services. In return, shareholders gain an enhanced level of protection of the Company's assets.

Further details of both the AIFM Agreement and the Depositary Agreement may be found in the Report of the Directors.

Gearing Policy and AIFM Directive Leverage Limit

During the year under review, the Company took advantage of the low interest rate environment to lock in a £20 million three-year term loan with Scotiabank Europe PLC, while also renewing the existing one-year revolving credit facility with the same bank, but with a reduction in the facility limit from £15 million to £10 million.

Gearing stood at 3.3% at the beginning of the year - and had increased to 9.6% as at 31 August 2014. The level of gearing continues to be monitored closely by the Board.

The AIFM Directive has introduced a requirement for the Manager to set maximum levels of leverage, using a wider definition than borrowing - and including the use of derivatives. Further details of this leverage limit may be found on the Manager's website at www.schroders.co.uk/its and in the Strategic Report on page 9 of the 2014 Annual Report.

Management Fee

Following a review during the year, the Board has agreed new management fee arrangements with the Manager. With effect from 1 September 2014, the management fee structure (which was based on a percentage of net revenue return, a percentage of assets and a performance fee) has been replaced with a single management fee of 0.75% of assets. The fee continues to be charged on the value of the Company's assets under management, net of current liabilities (other than short term borrowings, less any cash up to the level of borrowings), and is calculated and paid quarterly in arrears.

In setting these changes, the Board aims to simplify the management fee structure and reduce the level of the Company's operating expenses. To illustrate this, if the new management fee had been in place for the year ended 31 August 2014, it would have reduced the fee payable to the Manager by £109,000 (6.8%).

Update to Investment Policy

While entering into fixed term gearing for three years remains an attractive way of ensuring a low cost of funds, the Board may from time to time want to reduce the "gearing effect" of the Company's borrowings. Selling holdings to do this is relatively expensive, and would leave the Company's portfolio with cash yielding less than the interest costs of the borrowings. Therefore, the Board is proposing the potential use of put options as an alternative.

Put options give the right to sell a specified amount of an underlying security at a specified price for a fixed period of time. Using put options protects part of the capital value of the Company's portfolio in the event that the stock market falls during the life of the put option. Such instruments will only be bought to provide protection to the Company's portfolio up to an amount equal to the value of the Company's borrowings, as a means of offsetting the Company's gearing. Such put options will be limited to short term exchange-traded instruments on major stock market indices.

Your Board does not believe that the use of put options will change the overall risk profile of your Company. While the premium on each put option will be lost if the market rises sufficiently over its life, the goal is to assist the Manager to minimise the short term volatility of the Company's net asset value and, by so doing, increase the likelihood of the Company continuing to achieve its investment objectives.

The ability to employ put options is considered to be a material change to the Company's Investment Policy under the Listing Rules of the UK Listing Authority and therefore a resolution to adopt this amendment to the Investment Policy is included in the Notice of the Annual General Meeting on page 42 of the 2014 Annual Report. Your Board unanimously recommends that shareholders vote in favour.

The revised Investment Policy, with the proposed changes appearing in bold, is set out below.

"Investment Policy

The investment policy of the Company is to invest primarily in above-average yielding UK equities but up to 20% of the portfolio may be invested in equities listed on recognised stock exchanges outside the UK. If considered appropriate, the Company may use equity related instruments such as convertible securities and up to 10% of the portfolio may be invested in bonds. In addition, up to 20% of total income may be generated by short-dated call options written on holdings in the portfolio. Put options comprising short term exchange-traded instruments on major stock market indices of an amount up to the value of the Company's borrowings may be utilised."

Share Issuance and Buy Back Authorities

While the Board continued to monitor the share price relative to net asset value during the year, no shares were bought back or issued during the period. The Board will continue to seek opportunities to issue shares to meet demand should the share price reach a sustained premium in the financial year ahead.

The Board will be seeking to renew the existing authorities to issue and buy back shares in the Company and appropriate resolutions are included in the Notice of the Annual General Meeting. The Board believes that these authorities are valuable tools that may be used to enhance shareholder value and to reduce the volatility of the share price relative to net asset value, where circumstances are appropriate.

Annual General Meeting

The Company's Annual General Meeting will be held at 2.30 p.m. on Thursday, 18 December 2014. As in previous years, the meeting will include a presentation by the Manager on the Company's investment strategy and market prospects.

Outlook

The end of the Company's financial year in August 2014 was close to a new peak in the stock market, since then there has been a correction on concerns over future economic growth. The Manager's Review on pages 6 and 7 of the 2014 Annual Report discusses whether this concern is justified, but at the least it highlights that growth in investment income in real terms may be harder to achieve in the near future than it has been in recent years.

One of the Board's priorities since the end of the last decade has been to re-build the Company's revenue reserve, while continuing with the aim of increasing the dividend every year. As well as achieving the latter, it is satisfactory to report that this reserve now totals more than half the amount of the annual dividend, a useful buffer for the future.

Mr Ian Barby

Chairman

17 November 2014

Manager's Review

The Company's net asset value total return in the 12 months to 31 August 2014 was 14.1%, compared to 10.3% for the FTSE All-Share Index.

Review of the Year

The rise in the net asset value was the fifth consecutive year of gains. There were short-term setbacks in the stock market, not least from political uncertainties such as in the Ukraine, the Middle East, and the Scottish independence vote, but most companies benefited from two continuing economic factors - growth and low interest rates - offset in part by a new negative, rising sterling.

While emerging markets' growth is slowing, the US and UK economies continued to recover. The UK, for example, was helped by a rise in household spending (with consumer confidence back to the levels of the middle of the last decade) and, more recently, business investment. Secondly, despite uncertainty a year ago about how long Western central banks would continue with their quantitative easing, interest rates remain well below their historical averages. Offsetting this, sterling rose through the year, one factor why UK profits have not risen as much as the broader economic growth has implied.

Despite this, the portfolio has delivered further growth in its dividend income. Low volatility has meant that there have been few opportunities to boost income by writing call options on the portfolio holdings, but an 8% rise in investment income brought the Company's revenue return per share to a level 6% above the last peak in 2008.

Performance

Within the generally firm stock market, there was a pattern of individual shares reacting either to takeover rumours or corporate results, with the market rewarding companies announcing profit upgrades and punishing those with downgrades. The portfolio's outperformance of the FTSE All-Share Index came in part from M&A candidates such as AstraZeneca and ITV, while the single largest negative contributor was not holding another company that was bid for, Shire (a bid that collapsed after the year end).

Other strong holdings were in the insurance sector (Direct Line, Legal & General, and Prudential) and Halfords, while the portfolio benefited relative to the FTSE All-Share Index from reducing its holdings in the supermarket sector (eg by selling the holdings in Tesco and Morrisons) which is facing challenges from discount stores. One disappointment was stock selection in utilities, with the holding in Centrica performing less well than National Grid which was not held.

Policy Changes

The largest single source of turnover in the portfolio was redeploying funds from Vodafone's sale of its US business Verizon Wireless, the proceeds being distributed to shareholders in the form of cash and Verizon shares. Proceeds from this and the sale of the supermarket holdings were largely re-invested in some of the large-cap holdings (eg BP, Royal Dutch Shell).

New holdings established in the year included a house-builder (Bellway), and three medium-sized companies with above-average growth potential: John Wood (engineering in the oil and gas industry), Sage (accounting software), and Greencore (convenience food). In all cases we are looking to achieve a balance between stocks yielding more than the average and companies with an ability to grow their dividends consistently from current levels.

Outlook

While sterling's rise has been a challenge, the last 12 months have been a relatively good environment for many companies, with the prospect seemingly of more growth - at least in the UK and US - to come. Stock markets were therefore not prepared at the end of this summer for a subsequent worldwide downgrade in growth expectations, accompanied by a general fall in investor risk appetite.

The last two months - as in the third quarter of 2013 - are a reminder of the risks in a world where so much economic activity and stock market liquidity is sensitive to short-term economic forecasts and central bank policy. Growth expectations for the UK and US economies remain robust despite forecasts coming down. Monetary policy will diverge, with the prospect of higher US and UK interest rates next year while both the ECB and the Bank of Japan are expected to ease policy further. Rising US and UK interest rates typically coincide with a pick-up in earnings but could lead to a de-rating of the market, particularly among mid and small cap stocks. The UK market also has the uncertainty of the General Election in May 2015 and a possible EU referendum to follow.

We believe that UK equities remain well placed for modestly positive returns, with valuations - at historical average levels, but still cheap relative to other asset classes - supporting the current market level. To reflect this optimism, borrowing has increased, with gearing at 9.6% at the year end. The higher gearing will help next year's investment income, as will the recent decline in sterling, but otherwise there is little evidence of companies' dividends growing more than a few percent on this year's total.

We maintain a slight cyclical bias within the portfolio and continue to look for attractive opportunities in other areas, particularly the lowly valued larger cap area of the market.

Schroder Investment Management Limited

17 November 2014

Principal Risks and Uncertainties

The Board has adopted a matrix of key risks which affect its business and has put in place a robust framework of internal control which is designed to monitor those risks and to enable the Directors to mitigate them as far as possible. The matrix and the monitoring system, which have been in place throughout the year under review and which are reviewed annually by the Board, assist in determining the nature and extent of the risks the Board is willing to take in achieving its strategic objectives. The principal risks are considered to be as follows:

Investment Activity and Performance

An inappropriate investment strategy (for example in terms of asset allocation or the level of gearing) may result in underperformance against the market and the companies in the peer group. The Board monitors the Manager's compliance with the Company's investment restrictions at each Board meeting.

Financial Risk

The Company is exposed to the effect of market fluctuations due to the nature of its business. A significant fall in the UK stock market would have an adverse impact on the market value of the Company's underlying investments. The Board considers the portfolio's risk profile at each Board meeting and discusses with the Manager appropriate strategies to mitigate any negative impact of substantial changes in markets.

The Company utilises a three-year term loan together with a one-year revolving credit facility, which together amount to £30 million. These arrangements increase the funds available for investment through borrowing. Therefore, in falling markets, any reduction in the net asset value and, by implication the consequent share price movement, is amplified by the gearing. The Directors keep the Company's gearing under constant review and impose strict restrictions on borrowings to mitigate this risk.

A full analysis of the financial risks facing the Company is set out in note 21 on pages 38 to 41 of the 2014 Annual Report.

Strategic Risk

Over time, investment vehicles and asset classes can become out of favour with investors, or may fail to meet their investment objectives. This may result in a wide discount of the share price to underlying net asset value. The discount/premium of the share price relative to its net asset value is closely monitored and compared with those of peer group companies. The Board considers the use of the Company's buy back authority on a regular basis and has adopted guidelines under which it is prepared to consider buying back its shares.

The Board periodically reviews whether the Company's investment remit remains appropriate and continually monitors the success of the Company in meeting its stated objectives.

Accounting, Legal and Regulatory Risk

In order to continue to qualify as an investment trust, the Company must comply with the requirements of Section 1158 of the Corporation Tax Act 2010. Should the Company not comply with these requirements, it might lose investment trust status and capital gains within the Company's portfolio could, as a result, be subject to Capital Gains Tax.

Breaches of the UK Listing Rules, the Companies Act or other laws or regulations with which the Company is required to comply could lead to a number of detrimental outcomes and damage the Company's reputation. Breaches of controls by service providers, including the Manager, could also lead to reputational damage or loss.

Going Concern

The Directors believe that, having considered the Company's investment objectives (as set out on the inside front cover), risk management policies (see note 21 to the accounts on pages 38 to 41 of the 2014 Annual Report), capital management policies and procedures (see note 22 to the accounts on page 41 of the 2014 Annual Report), expenditure projections and the fact that the Company's assets comprise readily realisable securities which can be sold to meet funding requirements if necessary, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future. For these reasons, the Directors consider that there is reasonable evidence to continue to adopt the going concern basis in preparing the financial statements.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Strategic Report, the Report of the Directors, the Remuneration Report and the accounts in accordance with applicable law and regulations.

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

•        select suitable accounting policies and then apply them consistently;

•        make judgements and accounting estimates that are reasonable and prudent;

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

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

The Directors are responsible for keeping 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 and the Remuneration Report 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.

Each of the Directors, whose names and functions are set out on the inside front cover of the 2014 Annual Report, confirms that, to the best of his/her knowledge:

•        the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company;

•        the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces; and

•        the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

Income Statement    

for the year ended 31 August 2014

		2014			2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	-	16,999	16,999	-	28,834	28,834
Losses on derivative contracts	-	-	-	-	(380)	(380)
Net foreign currency gains/(losses)	-	19	19	-	(3)	(3)
Income from investments	8,599	612	9,211	7,955	432	8,387
Other interest receivable and similar income	4	-	4	108	-	108
Gross return	8,603	17,630	26,233	8,063	28,883	36,946
Management fee	(711)	(711)	(1,422)	(644)	(644)	(1,288)
Performance fee	-	(174)	(174)	-	(148)	(148)
Administrative expenses	(292)	-	(292)	(324)	-	(324)
Net return before finance costs and taxation	7,600	16,745	24,345	7,095	28,091	35,186
Finance costs	(121)	(121)	(242)	(52)	(52)	(104)
Net return on ordinary activities before taxation	7,479	16,624	24,103	7,043	28,039	35,082
Taxation on ordinary activities	(51)	-	(51)	(40)	-	(40)
Net return on ordinary activities after taxation	7,428	16,624	24,052	7,003	28,039	35,042
Return per share	10.82p	24.20p	35.02p	10.20p	40.82p	51.02p

The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. The Company has no recognised gains and losses other than those included in the results above and therefore no separate statement of total recognised gains and losses has been presented.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

Reconciliation of Movements in Shareholders' Funds

for the year ended 31 August 2014

	Called-up		Capital	Share	Warrant
	share	Share	redemption	purchase	exercise	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2012	6,869	7,404	2,011	34,936	1,596	85,053	5,231	143,100
Net return on ordinary activities	-	-	-	-	-	28,039	7,003	35,042
Dividends paid in the year	-	-	-	-	-	-	(6,526)	(6,526)
At 31 August 2013	6,869	7,404	2,011	34,936	1,596	113,092	5,708	171,616
Net return on ordinary activities	-	-	-	-	-	16,624	7,428	24,052
Dividends paid in the year	-	-	-	-	-	-	(6,732)	(6,732)
At 31 August 2014	6,869	7,404	2,011	34,936	1,596	129,716	6,404	188,936

Balance Sheet

at 31 August 2014

	2014	2013
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	206,332	176,421
Current assets
Debtors	1,871	1,329
Cash at bank and in hand	1,791	1,073
	3,662	2,402
Current liabilities
Creditors: amounts falling due within one year	(1,058)	(7,207)
Net current assets/(liabilities)	2,604	(4,805)
Total assets less current liabilities	208,936	171,616
Creditors: amounts falling due after more than one year	(20,000)	-
Net assets	188,936	171,616
Capital and reserves
Called-up share capital	6,869	6,869
Share premium	7,404	7,404
Capital redemption reserve	2,011	2,011
Share purchase reserve	34,936	34,936
Warrant exercise reserve	1,596	1,596
Capital reserves	129,716	113,092
Revenue reserve	6,404	5,708
Total equity shareholders' funds	188,936	171,616
Net asset value per share	275.06p	249.85p

These accounts were approved and authorised for issue by the Board of Directors on 17 November 2014 and signed on its behalf by:

Ian Barby

Chairman

Cash Flow Statement

for the year ended 31 August 2014

	2014	2013
	£'000	£'000
Net cash inflow from operating activities	6,603	6,130
Servicing of finance
Interest paid	(161)	(110)
Net cash outflow from servicing of finance	(161)	(110)
Taxation
Overseas tax paid	(73)	(52)
Investment activities
Purchases of investments	(51,596)	(28,010)
Sales of investments	38,746	28,276
Expiry of option contracts	-	(380)
Special dividends received allocated to capital	612	432
Net cash (outflow)/inflow from investment activities	(12,238)	318
Dividends paid	(6,732)	(6,526)
Net cash outflow before financing	(12,601)	(240)
Financing
Loan drawn down	13,300	-
Net cash inflow from financing	13,300	-
Net cash inflow/(outflow) in the year	699	(240)

Notes to the Accounts

1.         Accounting policies

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP") and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by the Association of Investment Companies in January 2009. All of the Company's operations are of a continuing nature.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments at fair value.

The policies applied in these accounts are consistent with those applied in the preceding year.

2.         Income

	2014	2013
	£'000	£'000
Income from investments:
UK dividends	7,209	6,966
Overseas dividends	1,328	954
Scrip dividends	62	35
	8,599	7,955
Other interest receivable and similar income:
Premiums receivable from written options	-	105
Deposit interest	4	3
	4	108
Total income	8,603	8,063
Capital:
Special dividends allocated to capital	612	432

3.         Management and performance fees

		2014			2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Management fee	711	711	1,422	644	644	1,288
Performance fee	-	174	174	-	148	148
	711	885	1,596	644	792	1,436

The basis for calculating the management and performance fees is set out in the Report of the Directors on page 14 of the 2014 Annual Report.

4.         Dividends

(a)        Dividends paid and declared

	2014 £'000	2013 £'000
2013 fourth interim dividend of 3.8p (2012: 3.5p)	2,610	2,404
First interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Second interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Third interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Total dividends paid in the year	6,732	6,526

	2014 £'000	2013 £'000
Fourth interim dividend declared of 4.1p (2013: 3.8p)	2,816	2,610

(b)        Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ("Section 1158")

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year as shown below. The revenue available for distribution by way of dividend for the year is £7,428,000 (2013: £7,003,000).

	2014 £'000	2013 £'000
First interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Second interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Third interim dividend of 2.0p (2013: 2.0p)	1,374	1,374
Fourth interim dividend of 4.1p (2013: 3.8p)	2,816	2,610
Total dividends of 10.1p (2013: 9.8p) per share	6,938	6,732

5.         Return per share

	2014 £'000	2013 £'000
Revenue return	7,428	7,003
Capital return	16,624	28,039
Total return	24,052	35,042
Weighted average number of Ordinary shares in issue during the year	68,688,343	68,688,343
Revenue return per share	10.82p	10.20p
Capital return per share	24.20p	40.82p
Total return per share	35.02p	51.02p

6.         Net asset value per share

	2014	2013
Net assets attributable to the Ordinary shareholders (£'000)	188,936	171,616
Shares in issue at the year end	68,688,343	68,688,343
Net asset value per share	275.06p	249.85p

7.         Transactions with the Manager

The Company has appointed Schroder Unit Trusts Limited ("the Manager"), a wholly owned subsidiary of Schroders plc, to provide investment management, accounting and company secretarial services. If the Company invests in funds managed or advised by the Manager or any of its associated companies, those funds are excluded from the assets used for the purposes of the management fee calculation and therefore attract no fee. During the year there was also a performance fee agreement in place. However the Company's management fee and performance fee arrangements have changed with effect from 1 September 2014. Details of the management and performance fee calculations applicable in the current year and the new arrangements which took effect from 1 September 2014 are given in the Report of the Directors on page 14 of the 2014 Annual Report.

The management fee payable in respect of the year ended 31 August 2014 amounted to £1,422,000 (2013: £1,288,000) of which £724,000 (2013: £288,000) was outstanding at the year end. A performance fee amounting to £174,000 (2013: £148,000) is also payable for the year and the whole of this amount (2013: same) was outstanding at the year end.

No Director of the Company served as a director of Schroder Unit Trusts Limited, or any member of the Schroder Group, at any time during the year.

Status of announcement

2013 Financial Information

The figures and financial information for 2013 are extracted from the published Annual Report and Accounts for the year ended 31 August 2013 and do not constitute the statutory accounts for that year. The 2013 Annual Report and Accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2014 Financial Information

The figures and financial information for 2014 are extracted from the Annual Report and Accounts for the year ended 31 August 2014 and do not constitute the statutory accounts for the year. The 2014 Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

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

 

END

 

 

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