Annual Financial Report

RNS Number : 3416B

Scottish American Investment Co PLC

03 March 2014

 



The Scottish American Investment Company P.L.C.

Annual financial report

Copies of the Annual Report and Financial Statements for the year ended 31 December 2013 have been submitted electronically to the National Storage Mechanism and will shortly be available for inspection at http://www.morningstar.co.uk/uk/nsm.

The Annual Report and Financial Statements for the year ended 31 December 2013 including the Notice of Annual General Meeting is also available on the Company's page of the Baillie Gifford website at: www.saints-it.com

At the Annual General Meeting to be held on 3 April 2014, it is proposed that new Articles of Association are adopted. Following recent changes to statutory rules governing investment trusts, there is no longer a requirement for a company's Articles to prohibit the distribution as a dividend of surpluses arising from the realisation of investments and shareholder approval is sought at the Annual General Meeting to remove this prohibition from the Articles. Further details can be found in the Directors' Report within the Annual Report and Financial Statements for the year to 31 December 2013. Copies of the new Articles of Association are available for inspection at Broadgate Tower, 20 Primrose Street, London, EC2A 2EW and Calton Square, 1 Greenside Row, Edinburgh EH1 3AN.

The unedited full text of those parts of the Annual Report and Financial Statements for the year ended 31 December 2013 which require to be published by DTR 4.1 is set out on the following pages.

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

Baillie Gifford & Co

Company Secretaries

3 March 2014

Chairman's Statement

Overview

In the five years since the 2008 global financial crisis, central banks, particularly in the large developed economies, have provided an extraordinary level of support by maintaining interest rates at exceptionally low levels and pursuing quantitative easing policies or, simply put, 'printing money'.

2013 may prove to have been the high water mark for these policies with their strong advocate, the US Federal Reserve, now reducing its bond buying programme.  This change to the investing environment will no doubt present challenges but, for the period covered by this report, there has been a strong gain in net asset value and, if the recommended final distribution is approved, an increased full year dividend of 10.2p per share will maintain the record of growing the dividend in real terms over time.

Performance

Net asset value (NAV) per share, on the fair value measure, rose 12% to 247.0p.  The total return for the year (capital and income) was 17%. 

The main explanation for this strong NAV result was the performance of stock markets in the developed economies.  These form the largest part of the SAINTS portfolio and they rose sharply in 2013.  A fall in the market value of the Company's debenture borrowings also served to boost NAV at fair value. 

The NAV total return lagged the benchmark total return of 21% because of SAINTS greater allocation to Emerging Markets and the emphasis on securing income well above average yields in equity markets. The weighting to Emerging Markets reflects that the long term potential here remains considerable. 

Benchmark

The current composite benchmark (50% FTSE All Share, 50% All-World ex UK) no longer reflects the reality that SAINTS is now a Global Equity Income trust with a relatively small UK equity exposure. The FTSE All-World Index would be more appropriate and it has been decided to make the change, effective from the start of 2014.

Revenues and Dividend

Investment income and earnings per share were at broadly similar levels to last year, at £18.4m and 10.21p per share respectively.  The fact that investment income did not increase reflects changes in the composition of the portfolio in the last two years, away from bonds and towards equities.  The immediate effect of this is to lower the current year income forecast but with improved prospects for capital and income growth over the long term.

A final dividend of 2.6p is recommended which will take the full year dividend to 10.2p per share, 4.1% higher than the 2012 dividend of 9.8p and also ahead of inflation of 2.7% as measured by RPI.

Borrowings

SAINTS' borrowings take the form of a single £80m debenture which is due for repayment in April 2022.  During 2013, the borrowings mainly funded a range of higher yielding commercial property and bond investments.

The book value of the debenture is £85.9m which, at the year end, was equivalent to approximately 25% of shareholders' funds.  The estimated market or fair value of the debenture was £100.6m, a decline from the previous year's value of £109.2m.  We expect further declines in both the debenture's book and market values as it approaches its final redemption value of £80m.

Regulation

To comply with the Alternative Investment Fund Managers Directive, a major piece of EU legislation, the Company is required to appoint a single Alternative Investment Fund Manager (AIFM) as well as a Depositary. As a result, the Company intends amending its contractual arrangements with our managers, the partnership of Baillie Gifford & Co and OLIM Property Ltd.  This will see our contractual counterparty become Baillie Gifford & Co Ltd, a wholly owned subsidiary of the Baillie Gifford partnership. In turn Baillie Gifford & Co Ltd will delegate investment management to Baillie Gifford & Co and also to OLIM Property Ltd.  SAINTS has agreed to appoint BNY Mellon as Depositary.

Articles of Association

At the AGM, the Company is seeking shareholder approval to amend the Articles to delete the provision which prohibits the distribution of any surplus arising from the realisation of investments. The Board believes that the removal of this restriction will give the Company greater flexibility in its distribution policy in the long term.

Management Arrangements

On a more personal note, after ten years as manager, Patrick Edwardson will step aside from day to day responsibility of managing the portfolio and the current Deputy Manager, Dominic Neary, will become Manager. Dominic already manages the equity investments, which represent approximately 80% of the portfolio. Patrick will remain closely involved with the management of SAINTS particularly with issues of asset allocation.

Outlook

Global economic growth has improved but remains below trend and valuation measures suggest stock markets are not lowly rated.  This, together with the impact that less supportive monetary policy may have, suggests the outlook for capital returns is modest.  However, many companies are very profitable and cash-generative and there is scope for dividend payout ratios to rise.

The Board and the AGM

The AGM will be held at 11am on Thursday 3 April at Baillie Gifford's offices at Calton Square, 1 Greenside Row, Edinburgh. The Managers will make a presentation on the investment portfolio. There will also be an opportunity to ask questions and the Directors and Managers look forward to meeting you there.

I would like to finish by thanking Sir Menzies Campbell who will be retiring from the Board at the AGM after six years. The Board and Managers have been very fortunate to have had the benefit of his wise counsel over this period as well as gaining from the singular insight that he has lent to discussions of wider political and global relevance.

Sir Brian Ivory, CBE

Chairman

19 February 2014

Managers' Review

Overview

The investment result in 2013 was good in absolute terms but it lagged the return on the benchmark. The NAV per share rose from 220.5p to 247.0p on the fair value measure and the total return, which includes both capital movements and income receipts, was 16.6%. The total return on the benchmark was 21%.

The year opened with strong gains in most stockmarkets and buoyant conditions in bond markets. The general expectation was for an improving world economy and for central banks to continue to support growth by keeping interest rates low and following quantitative easing programs. However, improvement in the US economy prompted a change of tack by its central bank, the Federal Reserve. From May onwards, there was much speculation about when and how the Federal Reserve would begin to withdraw the extraordinary level of stimulus it had supplied into the US economy since the financial crisis.

The Federal Reserve did not in fact begin reducing its quantitative easing program until December, but the prospect of that reduction roiled markets at various points through the year. Financial markets in the emerging economies were more affected than those of the developed economies.

Over the full year, stockmarkets in developed economies performed very well. Anticipation of stronger economic growth and better profits outweighed the impact of less supportive monetary policy. There was a mixed performance across developed economy bond markets, with government bonds falling in price as future interest rate hikes were discounted and credit markets rising as optimism on the economy translated into greater willingness to lend. In contrast, stockmarkets outside of the big developed economies struggled to make much headway, and bonds and currencies fell. Growth in these economies was disappointing and their competitiveness, willingness to reform and ability to finance external deficits were all questioned.

The portfolio was fully invested throughout the year with the major part being in shares of companies listed on developed world stockmarkets. This positioning helps explain the good absolute return for the year. However, relative to the benchmark, we had a large allocation to emerging market stocks which was unhelpful. Stock selection across the equity portfolio was also poor. We continue to believe the long term prospects for emerging markets are very good.

The gain in fair value NAV was also boosted by a fall in the market value of SAINTS' debenture borrowings (this fall being caused by a sell-off in the gilt market). The debenture borrowings effectively fund the property portfolio, which performed well, and various bond investments on which a net loss was incurred.

Full detail on the performance of the portfolio is provided below. In a change from last year, the commentary and performance numbers for the forestry and property investment fund holdings are included in the Equities section.

Income totalled £18.4m which compares to £18.6m in 2012. The small decline is explained largely by changes to the composition of the portfolio: over the last two years, we have reduced our bond investments and increased our equity investments, thereby causing a fall in the immediate yield on the portfolio but, we believe, an improvement in its potential for growth in both capital and income.

Equities

Over the year an average of 80% of the portfolio was invested in equities. Expressed as a percentage of shareholders' funds the figure was 100%. The total return on equity investments for the year was 14.0%.

Over the long-term we expect to have shareholders' funds fully invested in equity markets in order to maximise long-term income growth. In 2013 the equity allocation returned to this long-term position after a period of lower allocation to equities. The fact that we have had a lower allocation in recent years reflects a range of factors, including attractive valuations on non-equity investments (in particular credit markets), portfolio income considerations and some nervousness about equity markets given the tough economic conditions. The economic outlook is still challenging but the valuation case for favouring credit markets over equity markets no longer holds. We therefore funded an increase in the equity allocation out of sales from the bond portfolio.

Global equity markets made strong gains in aggregate over 2013, however the headline total return performance of over 20% for SAINTS' comparative index masks the divergent performance of developed and emerging markets. Buoyed by encouraging economic data from the United States, signs of stabilisation across a number of European economies, and the implementation of decisive policies to promote growth and reflation in Japan, developed markets showed strong returns. Emerging economy stockmarkets however remained broadly flat, held back by concerns surrounding the impact of the Chinese government's tightening policies and the potential ramifications of the withdrawal of quantitative easing measures by the major developed economies.

During 2013 we purchased seven new holdings for the equity portfolio. Two of these, SK Telecom and Total Access Communications, are mobile telecommunications companies in Asia. While SK Telecom is a leading service provider in Korea, one of the world's most advanced mobile communications markets, Total Access Communications is the number two mobile communications provider in Thailand which is only just beginning to offer 3G services to its customers. There are however key features common to each investment case, including an improvement in the regulatory backdrop and increasingly stable competitive environments, which we do not believe are reflected in the stocks' current valuations. For the remaining new buys there is no single, over-riding theme behind the purchases, other than a belief that their competitive strengths will be employed to generate profitable long-term growth in their businesses. We bought into Kraft Foods Group, the US-focused food company, following its demerger from Kraft's international business. We believe that the management team will be successful in its efforts to reinvigorate and grow the company's business through the increased sales and profitability of its many leading brands. Lancashire Holdings provides specialty insurance and reinsurance products, and has an excellent track record of prudent business management and consistently profitable underwriting. M6-Metropole is a French free-to-air television broadcaster which is ultimately controlled by the Mohn family, through their unlisted German media conglomerate, Bertelsmann. Nippon Prologis, the Japanese real estate investment trust, was bought through a secondary offering of the company's shares, the proceeds of which were used to fund the purchase of a collection of attractive additions to their portfolio of high-quality Japanese logistics facilities. Norsk Hydro is involved in all aspects of the manufacture of aluminium, and enjoys significant cost advantages over its competitors thanks to its low-cost bauxite feedstock and company-owned hydro-electric power supply for its smelters.

Funding for these purchases came from a variety of sources, including reductions from the bond portfolio and the complete sale of 13 equity holdings. In some cases this continued the theme of reduction in the portfolio's exposure to specific highquality, dependable businesses where we believe that valuations had become excessively high. British American Tobacco, GlaxoSmithKline, L'Oréal, Massmart, Meitec and Wood Group fall into this category. We also sold out of holdings where we have become less confident of the company's business prospects. Falling into this category are BP, Impala Platinum, National Grid, Petrobras, Royal Dutch Shell and Vale. We also sold the small holding in Recall, the document management solutions company, that we received as a result of its spin-out from the holding in Brambles.

These transactions left the portfolio with 96 equity holdings at the year end, providing exposure to a broad range of industries, countries and dividend yields. This figure includes a small number of listed investment funds that we have in recent years reported on separately from the main equity portfolio. The largest of these holdings is Cambium Global Timberland, a fund that invested in forestry plantations in various locations around the world. This has been a very disappointing investment for us with its net asset value falling since its launch in 2007 and its share price moving to a large discount. In 2013, Cambium's board, with our support and encouragement, decided to realise its portfolio and wind up the fund. This will be a protracted process because of the illiquid nature of the fund's assets but given this decision and the now smaller portion it represents of SAINTS' portfolio, we felt that reporting on it separately was no longer appropriate. We will however continue to comment on it as we report on the equity portfolio. The other holdings are listed property funds. Some of these are also now in wind up while for others the decision to own them is more reflective of stock specific considerations than a broad asset class view. Again, we therefore feel it is inappropriate to report on them separately from the main equity portfolio.

In 2013 the investment returns of the equity portfolio lagged the exceptionally strong performance of the benchmark. The difference can be attributed in a number of ways. Considering the contribution of geographic positioning to this performance, the exposure to emerging markets notably detracted from performance, as did the positioning in North America and the United Kingdom. Looking at the sectors and industries in which we invested, the portfolio benefited particularly from the positioning in banks and software and computer services, but lost ground in a number of other areas, most notably basic materials, consumer services and industrials.

At the stock level the range of returns across the portfolio was broad. The strongest contributors to the equity portfolio's performance were Baidu, the Chinese internet company, Hikari Tsushin, the Japanese retailer, and M6 Metropole, one of the new purchases in 2013 noted above. Conversely Cambium Global Timberland, AES Tiete and Penn West exploration detracted most from returns, albeit the latter two made healthy contributions to the portfolio's income stream for the year. Generally across the portfolio dividend growth has been reliable and a number of the holdings returned excess cash to shareholders as special dividends.

Corporate balance sheets on the whole remain healthy, and there are signs of an increasing emphasis on strong dividend policies. Certainly, if history is a guide, there is plenty of room for dividend growth to outpace earnings growth, with global payout ratios remaining close to historic lows.

Bonds

Our bond investments represented 13% of the portfolio at the start of the year but a combination of net selling and falls in value meant this figure dropped to 7% by year end. The investment result was poor,
-1% in sterling terms.

The largest individual bond investment is an index linked bond issued by the government of Brazil. This holding has been in the portfolio since 2006 and up until last year had performed very well. During 2012 we re-assessed the investment case and reduced the holding by half. In 2013, its price fell  significantly as capital retreated from emerging markets and as confidence in the Brazilian economy faltered. The Brazilian currency also lost value causing our losses, when measured in sterling, to be greater still. Mid-way through the year we were tempted into buying more of these bonds, thinking their price had fallen to a very attractive level. We believe this view will ultimately prove correct but the transaction has been costly so far with further price falls experienced since the addition. We also bought back into two bonds issued by the government of Venezuela. These bonds had been held very profitably during 2012 and we were hoping to repeat that experience this year. So far, this has not been possible with the market price of the bonds tending to fall since purchase.

We enjoyed a much more positive experience with our other bond holdings. These holdings represented a diverse range of opportunities drawn from credit markets and, reflecting the generally buoyant conditions in those markets, we benefited from rising prices and some well-timed sales.

The largest of these holdings was the Athena Debt Opportunities, a pooled fund managed by a specialist investment company called Prytania. It invests in structured debt instruments such as securitisations and collateralised loan obligations, instruments which enjoyed a particularly strong year. The unit price of the Athena Fund rose from $122 at the start of the year to $148 by year end. We believe it can still deliver good returns from this higher level but the investment case is less compelling than it was and we reduced the holding by a quarter during the year.

Another pooled fund owned during the year was the Baillie Gifford High Yield Bond Fund. This too gained in value during the year, prompting us to exit. We also sold most of our directly held credit market instruments, again on valuation grounds. The only one remaining is Semper Finance, a euro-denominated instrument where returns are dependent on a pool of housing association mortgage loans in Germany.

Lastly, we sold out of Everglades Re. This was an insurance-linked security, which is the name given to bonds where the investment return is dependent on the frequency and severity of specified natural events, in this case Floridian hurricanes. An influx of capital to this market has pushed up prices to high levels and prospective returns now barely compensate for the insurance risk being taken.

Direct Property

The direct property investments are managed by OLIM Property Limited, a specialist property manager. The portfolio consists of 16 commercial properties in a variety of locations across the United Kingdom. There were no purchases or sales during the year and all were occupied and producing rental income. The total return was 11%.

The property portfolio is valued twice yearly by Jones Lang LaSalle. Eight properties rose in value during 2013, three were unchanged and five fell. The capital value of the whole portfolio rose from £38.65m to £39.6m. Total rental income received in 2013 was £3.2m which was approximately 1% more than the amount received in 2012.

Investment activity in the UK property market picked up last year and prices have begun to rise gently. We anticipate this will continue and have decided to increase our allocation by approximately £10m. OLIM have already identified one new property which was acquired in January 2014 and we hope to complete other purchases during 2014.

Outlook

We welcome the fact that the US economy is now strong enough for the Federal Reserve to begin reducing its program of quantitative easing. We are also heartened by the tentative recovery underway in the United Kingdom. However, SAINTS' portfolio is a global one, with investments chosen from stockmarkets around the world and with many of the companies held being multi-national businesses trading in many different countries and regions.

The global economy seems to be growing at somewhere between 2½% and 3% in real terms and between 5% and 6% in nominal terms. Growth at this level is below what most think of as the sustainable, trend rate. For each country or region that has exceeded expectations recently, or shown signs of stabilisation after a period of weakness, there are others where economic strength and vitality appears to have weakened.

Of course we are hopeful that growth will accelerate to a more satisfying pace but, for now, we must acknowledge that low nominal GDP growth constrains what the corporate sector can produce by way of sales and profits growth. We are also mindful that should the global economy accelerate, there will be less need for the extraordinary measures taken in recent years by many central banks: quantitative easing would be withdrawn more quickly and interest rates might rise.

Our outlook is therefore a restrained one. We expect profits to grow, but not dramatically. Valuations across most stockmarkets have risen considerably in recent years, not perhaps to levels that are overtly expensive but at least to a point where further gains seem unlikely in the absence of profits growth. And the very powerful support provided by central banks may now be slowly withdrawn. All of this suggests that capital growth from the current point is likely to be modest. However, we see potential for dividends from listed companies to grow more quickly than earnings because cashflow and balance sheets are strong and dividend payout ratios are low. This should allow SAINTS to maintain its record of delivering real dividend growth for shareholders.

Patrick Edwardson

Baillie Gifford & Co

19 February 2014

Asset Allocation

	At 31 December 2013 %		At 31 December 2012 %
Global equities	83.6		77.4
Bonds	6.7		12.8
Direct property	9.2		9.5
Net liquid assets	0.5		0.3
Total assets	100.0		100.0

Performance Attribution

Portfolio Breakdown	Average allocation		Total return
	SAINTS %	Benchmark %	SAINTS %	Benchmark %
Global equities	100.4	100.0	14.0	21.1
Bonds	12.1		(1.2)
Direct property	11.2		11.0
Deposits	1.2		-
Debenture at book value	(24.9)		6.8
Portfolio total return (debenture at book value)			13.6	21.1
Other items*			(0.8)
Fund total return (debenture at book value)			12.8
Adjustment for change in fair value of debenture			3.8
Fund Total Return (debenture at fair value)			16.6	21.1

*    Includes Baillie Gifford and OLIM management fees.

The above returns are calculated on a total return basis with net income reinvested.

Past performance is not a guide to future performance.

Source: Baillie Gifford & Co

Thirty largest equity holdings at 31 December 2013

Name	Business	2013 Value £'000	2013 % of total assets	2012            Value £'000
Amlin	Property and casualty insurance	11,165	2.6	5,906
Rio Tinto	Mining	10,012	2.3	6,600
Progressive	Property and casualty insurance	9,893	2.3	10,518
Baillie Gifford Greater China Fund	Chinese equities investment fund	9,802	2.3	8,734
Total	Integrated oil company	8,854	2.1	3,321
Samsung Electronics	Electronic devices	7,978	1.9	6,735
Vodafone	Mobile telecommunication services	7,584	1.8	3,773
Taiwan Semiconductor Manufacturing	Semiconductor manufacturer	7,454	1.7	7,478
Analog Devices	Integrated circuits	5,688	1.3	3,253
Japan Residential Investment Company	Japanese residential property fund	5,625	1.3	5,156
Baidu	Online search engine	5,616	1.3	2,233
Hiscox	Property and casualty insurance	5,610	1.3	1,359
M6-Metropole TV	Television broadcasting	5,525	1.3	-
SK Telecom	Mobile telecommunication services	5,291	1.2	-
Philip Morris International	Cigarette manufacturer	5,151	1.2	6,162
Jeronimo Martins	Food retailer	5,038	1.2	5,054
Rexam	Beverage can manufacturer	5,015	1.2	4,584
Norsk Hydro	Aluminium producer	4,955	1.1	-
SAP	Business software developer	4,876	1.1	4,620
Svenska Handelsbanken	Banking	4,861	1.1	3,598
Roche Holdings	Pharmaceuticals	4,780	1.1	3,495
United Parcel Service	Courier services	4,767	1.1	2,495
Doric Nimrod Air Two	Aircraft leasing	4,725	1.1	4,620
Aberforth Geared Income Trust	UK small-cap equities fund	4,652	1.1	2,974
Konecranes	Lifting equipment	4,634	1.1	3,555
New York Community Bancorp	Banking	4,619	1.1	3,656
Linear Technology	Integrated circuits	4,619	1.1	3,543
Penn West Energy Trust	Oil exploration and production	4,516	1.1	5,962
Cambium Global Timberland	Forestry investment fund	4,500	1.1	6,600
China Mobile	Mobile telecommunication services	4,393	1.0	3,471
		182,198	42.5	129,455

Management fee arrangements

Baillie Gifford & Co are employed by the Company as investment managers and secretaries under a management agreement which can be terminated on six months' notice. Baillie Gifford & Co's annual management fee is 0.45% of total assets less current liabilities, excluding the property portfolio, calculated on a quarterly basis. Although holdings in collective investment schemes (OEICs) managed by Baillie Gifford & Co are subject to this fee the OEIC share class held by the Company does not itself attract a fee, thereby avoiding any duplication of fees. No secretarial fee is payable.

The property portfolio is managed by OLIM Property Limited, which receives an annual fee of 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250. The agreement can be terminated on three months' notice.

The details of the management fees are as follows:

	2013 £'000		2012 £'000
Investment management fee	1,743		1,597
Property management fee	194		194
	1,937		1,791

Principal risks and uncertainties

As an investment trust, the Company invests in equities and makes other investments so as to secure its investment objective of increasing capital and growing income in order to deliver real dividend growth. The Company borrows money when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed to a variety of risks that cause short term variation in the Company's net assets and could result in either a reduction in the Company's net assets or a reduction in the profits available for dividend.

These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent reduction in the Company's net assets or its profits available for dividend rather than to minimise the short term volatility.

The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period.

Market Risk

The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. The Board reviews and agrees policies for managing these risks and the Company's Investment Manager both assesses the exposure to market risk when making individual investment decisions and monitors the overall level of market risk across the investment portfolio on an ongoing basis.

Details of the Company's investment portfolio are shown in note 9 of the Annual Report and Financial Statements. Details of derivative financial instruments outstanding at the balance sheet date are shown below.

Currency Risk

Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items.

The Investment Manager monitors the Company's exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the company is quoted.

Forward currency contracts are used periodically to limit the Company's exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. Where appropriate, they are used also to achieve the portfolio characteristics that assist the Company in meeting its investment objectives. Cash amounts received in foreign currencies are converted to sterling on a regular basis.

Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below.

At 31 December 2013	Investments £'000	Cash and deposits £'000	Forward currency contracts £'000	Debentures £'000	Other debtors and creditors* £'000	Net exposure £'000
US dollar	131,762	-	(9,661)	-	197	122,298
Euro	34,497	71	(5,824)	-	121	28,865
Brazilian real	18,692	725	-	-	89	19,506
Japanese yen	17,541	-	-	-	116	17,657
Other overseas currencies	72,706	-	-	-	61	72,767
Total exposure to currency risk	275,198	796	(15,485)	-	584	261,093
Sterling	150,850	3,160	15,622	(85,931)	(2,412)	81,289
	426,048	3,956	137	(85,931)	(1,828)	342,382

* Includes net non-monetary assets of £33,000.

At 31 December 2012	Investments £'000	Cash and deposits £'000	Forward currency contracts £'000	Debentures £'000	Other debtors and creditors* £'000	Net exposure £'000
US dollar	119,790	31	(11,074)	-	124	108,871
Euro	27,649	139	(9,734)	-	112	18,166
Brazilian real	19,378	22	-	-	66	19,466
Japanese yen	9,222	-	-	-	89	9,311
Other overseas currencies	60,445	(63)	-	-	190	60,572
Total exposure to currency risk	236,484	129	(20,808)	-	581	216,386
Sterling	164,170	1,891	21,010	(86,467)	(1,677)	98,927
	400,654	2,020	202	(86,467)	(1,096)	315,313

* Includes net non-monetary assets of £36,000.

Currency Risk Sensitivity

At 31 December 2013, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The analysis is performed on the same basis for 2012.

	2013 £'000		2012 £'000
US dollar	6,115		5,443
Euro	1,443		908
Brazilian real	975		973
Japanese yen	883		466
Other overseas currencies	3,638		3,029
	13,054		10,819

Interest Rate Risk

Interest rate movements may affect directly:

¾ the fair value of the investments in fixed interest rate securities;

¾ the level of income receivable on cash deposits;

¾ the fair value of the Company's fixed-rate borrowings; and

¾ the interest payable on any variable rate borrowings which the Company may take out.

Interest rate movements may also impact upon the market value of the Company's investments other than its fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity.

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 decisions and when entering borrowing agreements.

The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments.

The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board.

Movements in interest rates, to the extent that they affect the fair value of the Company's fixed rate borrowings, may also affect the amount by which the Company's share price is at a discount or a premium to the net asset value.

The interest rate risk profile of the Company's financial assets and liabilities at 31 December is shown below.

Financial Assets	2013			2012
	Fair value £'000	Weighted average interest rate	Weighted average fixed rate period	Fair value £'000	Weighted average interest rate	Weighted average fixed rate period
Fixed rate:
UK bonds	-	-	-	3,998	7.2%	6 years
US bonds*	2,065	14.1%	15 years	3,023	6.6%	2 years
Floating rate:
Brazilian bonds (interest rate linked to Brazilian CPI)	9,696	11.0%	n/a	10,061	8.4%	n/a
Euro bonds (interest rate linked to Euroibor)	3,070	17.4%	n/a	6,425	12.9%	n/a
Fixed Interest Collective Investment Funds:
UK funds	-	-	-	13,196	6.3%	n/a
US dollar denominated fund	13,786	0.4%	n/a	15,740	1.7%	n/a

Financial Liabilities	2013 £'000	2012 £'000
The interest rate risk profile of the Company's financial liabilities at 31 December was:
Fixed rate - sterling	85,931	86,467

The maturity profile of the Company's financial liabilities at 31 December was:
In more than five years - 9 years (2012 - 10 years)	85,931	86,467

Interest Rate Risk Sensitivity

An increase of 100 basis points in bond yields as at 31 December 2013 would have decreased total net assets and total return on ordinary activities by £1,397,000 (2012 - £1,865,000) and would have increased the net asset value per share (with debenture at fair value) by 3.7p (2012 - 4.5p). A decrease of 100 basis points would have had an equal but opposite effect.

Other Price Risk

Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets.

The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objectives and investment policies.

Other Price Risk Sensitivity

A full list of the Company's investments is shown on pages 15 to 18 of the Annual Report and Financial Statements. In addition, a list of the 30 largest equity holdings together with various analyses of the portfolio by asset class and industrial sector are contained in the Strategic Report of the Annual Report and Financial Statements.

104.0% of the Company's net assets are invested in quoted equities. A 5% increase in quoted equity valuations at 31 December 2013 would have increased total assets and total return on ordinary activities by £17,797,000 (2012 - £14,553,000). A decrease of 5% would have had an equal but opposite effect.

Liquidity Risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Liquidity risk is not significant as the majority of the Company's assets are investments in quoted securities that are readily realisable. The Company's holdings in direct property and unlisted investments, which are not considered to be readily realisable, amount to 10.4% of total assets at 31 December 2013 (2012 - 9.5%). The Company has the power to take out borrowings, which give it access to additional funding when required.

The Board gives guidance to the Investment Managers as to the maximum amount of the Company's resources that should be invested in any one holding and to the maximum aggregate exposure to any one entity (see investment policy on page 6 of the Annual Report and Financial Statements). The Board also sets parameters for the degree to which the Company's net assets are invested in quoted equities.

Credit Risk

This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows:

¾ where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question;

¾ the Board regularly receives information from the Investment Manager on the credit ratings of those bonds and other securities in which the Company has invested;

¾ the Company's listed investments are held on its behalf by Bank of New York Mellon SA/NV, the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Manager monitors the Company's risk by reviewing the custodian's internal control reports and reporting its findings to the Board;

¾ investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily done on a delivery versus payment basis whereby the Company's custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed;

¾ transactions involving derivatives, structured notes and other arrangements wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest are subject to rigorous assessment by the Investment Manager of the creditworthiness of that counterparty. The Company's aggregate exposure to each such counterparty is monitored regularly by the Board; and

¾ cash is only held at banks that have been identified by the Managers as reputable and of high credit quality.

Credit Risk Exposure

The exposure to credit risk at 31 December was:

	2013 £'000	2012 £'000
Bonds	28,617	51,287
Cash and short term deposits	3,956	2,020
Debtors and prepayments	1,158	1,735
	33,731	55,042

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

Fair value of financial assets and financial liabilities

The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the balance sheet with the exception of the long term borrowings which are stated at amortised cost in accordance with FRS 26. The fair value (determined as the asking price as traded on an active market) of the debenture stock is shown below.

	2013			2012
	Nominal £'000	Book £'000	Fair £'000	Nominal £'000	Book £'000	Fair £'000
8% debenture stock 2022	80,000	85,931	100,632	80,000	86,467	109,248

Gains and losses on hedges

The following forward currency contracts were open at 31 December:

At 31 December 2013 Currency sold	Currency amount sold	Currency bought	Currency amount bought	Settlement date	Fair value £'000
US dollar	$16,000,000	Sterling	£9,765,000	15/01/14	104
Euro	€7,000,000	Sterling	£5,857,000	15/01/14	33
					137

At 31 December 2012 Currency sold	Currency amount sold	Currency bought	Currency amount bought	Settlement date	Fair value £'000
US dollar	$18,000,000	Sterling	£11,291,000	09/01/13	217
Euro	€12,000,000	Sterling	£9,719,000	09/01/13	(15)
					202

Realised currency gains/(losses) are taken to the capital reserve and are not reflected in the revenue account unless they are of a revenue nature.

Capital Management

The Company does not have any externally imposed capital requirements. The capital of the Company is the ordinary share capital (see note 13) which is managed in accordance with its investment policy in pursuit of its investment objective, both of which are detailed on page 6 of the Annual Report and Financial Statements. Shares may be issued and/or repurchased as explained on pages 25 and 26 on the Annual Report.

Investments

At 31 December 2013	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities/funds	356,042	1,746	-	357,788
Bonds	2,065	9,696	16,856	28,617
Unlisted equities	-	-	43	43
Total financial asset investments	358,107	11,442	16,899	386,448
Property
Freehold				39,600
				39,600
Total investments				426,048

At 31 December 2012	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities/funds	307,779	1,713	-	309,492
Listed convertible securities	1,138	-	-	1,138
Bonds	17,052	10,061	24,174	51,287
Unlisted equities	-	-	87	87
Total financial asset investments	325,969	11,774	24,261	362,004
Property
Freehold				38,650
				38,650
Total investments				400,654

Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 29 'Financial Instruments: Disclosures', the preceding tables provide an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value.

Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 29 'Financial Instruments: Disclosures', the tables on page 39 of the Annual Report and Financial Statements provide an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value. Property investments are not financial assets and therefore the fair value hierarchy does not apply to these assets.

Fair Value Hierarchy

The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

¾ Level 1 - investments with quoted prices in an active market;

¾ Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly being derived from market prices; and

¾ Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.

Other Risks

Other risks faced by the Company include the following:

Market Risk - The Company's assets consist mainly of listed securities and its principal risks are therefore market related and include market risk (comprising currency risk, interest rate risk and other price risk),  liquidity risk and credit risk. An explanation of those risks and how they are managed is contained in note 18 to the financial statements on pages 44 to 48 of the Annual Report and Financial Statements.

Regulatory Risk - failure to comply with applicable legal and regulatory requirements such as the tax rules for investment companies, the UKLA Listing Rules and the Companies Act could lead to suspension of the Company's Stock Exchange Listing, financial penalties, a qualified audit report or the Company being subject to tax on capital gains. Baillie Gifford's Business Risk & Internal Audit and Compliance Departments provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes.

Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised.

Operational/Financial Risk - failure of Baillie Gifford's accounting systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. Baillie Gifford have a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption or major disaster. The Board reviews Baillie Gifford's Report on Internal Controls and the reports by other key third party providers are reviewed by Baillie Gifford on behalf of the Board.

Premium/Discount Volatility - the premium/discount at which the Company's shares trade can change. The Board monitors the level of premium/discount and the Company has authority to issue new shares and to buy back its existing shares.

Gearing Risk - the Company may borrow money for investment purposes. If the investments fall in value, any borrowings will magnify the extent of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings.

All borrowings require the prior approval of the Board and gearing levels are discussed by the Board and Managers at every meeting. The majority of the Company's investments are in quoted securities that are readily realisable.

Political Risk - the Board is aware that the Scottish Referendum Vote introduces elements of political uncertainty which may have practical consequences; developments will be closely monitored and considered by the Board and Managers.

Statement of Directors' Responsibilities in respect of the Annual Report and Financial Statements

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration 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 they have elected to prepare the financial statements in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice). 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 year. In preparing the financial statements, the Directors are required to:

¾ select suitable accounting policies and then apply them consistently;

¾ make judgements and accounting estimates that are reasonable and prudent;

¾ state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

¾ 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 Directors' Remuneration Report comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Company's page on the Managers' website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed within the Directors and Management section, confirm that, to the best of their knowledge:

¾ the financial statements, which have been prepared in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial position and net return of the Company;

¾ the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy; and

¾ 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.

By order of the Board

Sir Brian Ivory

19 February 2014

Income Statement

	For the year ended 31 December 2013				For the year ended 31 December 2012
	Revenue £'000	Capital £'000		Total £'000	Revenue £'000	Capital £'000	Total £'000
Net gains on investments - securities	-	30,858		30,858	-	25,178	25,178
Currency (losses)/gains	-	(266)		(266)	-	288	288
Income (note 2)	18,421	-		18,421	18,556	-	18,556
Management fees	(678)	(1,259)		(1,937)	(627)	(1,164)	(1,791)
Other administrative expenses	(958)	-		(958)	(881)	-	(881)
Net return before finance costs and taxation	16,785	29,333		46,118	17,048	24,302	41,350
Finance costs of borrowings	(2,052)	(3,812)		(5,864)	(2,063)	(3,832)	(5,895)
Net return on ordinary activities before taxation	14,733	25,521		40,254	14,985	20,470	35,455
Tax on ordinary activities	(1,192)	457		(735)	(1,421)	705	(716)
Net return on ordinary activities after taxation	13,541	25,978		39,519	13,564	21,175	34,739
Net return per ordinary share       (note 3)	10.21p		19.58p	29.79p	10.22p	15.96p	26.18p

Statement of Total Recognised Gains and Losses

	For the year ended 31 December 2013			For the year ended 31 December 2012
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net return on ordinary activities after taxation	13,541	25,978	39,519	13,564	21,175	34,739
Net gains/(losses) on investments - property	-	950	950	-	(750)	(750)
Total recognised gains and losses for the year	13,541	26,928	40,469	13,564	20,425	33,989
Total recognised gains and losses per ordinary share (note 4)	10.21p	20.29p	30.50p	10.22p	15.39p	25.61p

The total column of the Income Statement is the profit and loss account of the Company.

All revenue and capital items in these statements derive from continuing operations.

Balance Sheet

	At 31 December 2013		At 31 December 2012
	£'000	£'000	£'000	£'000
Fixed assets
Investments - securities	386,448		362,004
Investments - property	39,600		38,650
		426,048		400,654
Current assets
Debtors	1,158		1,735
Cash and deposits	3,956		2,020
	5,114		3,755
Creditors
Amounts falling due within one year	(2,849)		(2,629)
Net current assets		2,265		1,126
Total assets less current liabilities		428,313		401,780
Creditors
Amounts falling due after more than one year		(85,931)		(86,467)
Total net assets		342,382		315,313
Capital and reserves
Called up share capital		33,169		33,169
Share premium		357		357
Capital redemption reserve		22,781		22,781
Capital reserve		269,102		242,174
Revenue reserve		16,973		16,832
Shareholders' funds		342,382		315,313
Net asset value per ordinary share (debenture at fair value)		247.0p		220.5p
Net asset value per ordinary share (debenture at par value)		258.1p		237.7p
Ordinary shares in issue		132,675,943		132,675,943

Reconciliation of movements in shareholders' funds

For the year ended 31 December 2013

	Share capital £'000	Share Premium £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 January 2013	33,169	357	22,781	242,174	16,832	315,313
Total recognised gains and losses	-	-	-	26,928	13,541	40,469
Dividends paid in the year	-	-	-	-	(13,400)	(13,400)
Shareholders' funds at 31 December 2013	33,169	357	22,781	269,102	16,973	342,382

For the year ended 31 December 2012

	Share capital £'000	Share Premium £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 January 2012	33,169	357	22,781	221,749	16,138	294,194
Total recognised gains and losses	-	-	-	20,425	13,564	33,989
Dividends paid in the year	-	-	-	-	(12,870)	(12,870)
Shareholders' funds at 31 December 2012	33,169	357	22,781	242,174	16,832	315,313

Cash flow statement

	Year Ended 31 December 2013		Year Ended 31 December 2012
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities		15,644		15,832
Servicing of finance
Interest paid	(6,400)		(6,400)
Net cash outflow from servicing of finance		(6,400)		(6,400)
Taxation
Overseas tax incurred	(735)		(720)
Total tax paid		(735)		(720)
Financial investment
Acquisitions of investments	(76,212)		(75,401)
Disposals of investments	83,240		78,382
Forward currency contracts	(35)		292
Net cash inflow from financial investment		6,993		3,273
Equity dividends paid		(13,400)		(12,870)
Net cash inflow/(outflow) before financing		2,102		(885)
Increase/(decrease) in cash		2,102		(885)
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash		2,102		(885)
Translation difference		(166)		(260)
Other non-cash changes		536		505
Movement in net debt in the year		2,472		(640)
Net debt at 1 January		(84,447)		(83,807)
Net debt at 31 December		(81,975)		(84,447)
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return before finance costs and taxation		46,118		41,350
Gains on investments - securities		(30,858)		(25,178)
Currency losses/(gains)		266		(288)
Decrease in accrued income and prepaid expenses		354		193
(Increase)/decrease in other debtors		(17)		4
Increase/(decrease) in creditors and prepaid income		220		(30)
Other non-cash changes		(439)		(219)
Net cash inflow from operating activities		15,644		15,832

Notes

1.	The financial statements for the year to 31 December 2013 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements to 31 December 2012.
2.	Income									2013 £'000				2012 £'000
	Income from investments
	Franked investment income									3,554				3,995
	UK unfranked investment income									472				1,198
	Overseas dividends									9,445				8,357
	Overseas interest									1,700				1,793
										15,171				15,343
	Other income
	Deposit interest									12				9
	Rental income									3,198				3,153
	Other income									40				51
										3,250				3,213
	Total income									18,421				18,556
3.	Returns per ordinary share	2013					2012
		Revenue	Capital	Total			Revenue						Capital				Total
	Net return per ordinary share (Income Statement)	10.21p	19.58p	29.79p			10.22p						15.96p				26.18p
	Total recognised gains and losses per ordinary share	10.21p	20.29p	30.50p			10.22p						15.39p				25.61p
	Net return per ordinary share is based on the return on ordinary activities after taxation figures in the Income Statement and on 132,675,943 (2012 - 132,675,943) ordinary shares of 25p, being the weighted average number of ordinary shares in issue during each year. Total recognised gains and losses per ordinary share is based on the total recognised gains and losses for the year in the Statement of Total Recognised Gains and Losses and on 132,675,943 (2012 - 132,675,943) ordinary shares of 25p, being the weighted average number of ordinary shares in issue during each year. There are no dilutive or potentially dilutive shares in issue.
4.	Ordinary Dividends					2013			2012			2013 £'000				2012 £'000
	Amounts recognised as distributions in the year:
	Previous year's final (paid 12 April 2013)					2.50p			2.40p			3,317				3,184
	First interim (paid 28 June 2013)					2.50p			2.40p			3,317				3,184
	Second interim (paid 27 September 2013)					2.55p			2.45p			3,383				3,251
	Third interim (paid 20 December 2013)					2.55p			2.45p			3,383				3,251
						10.10p			9.70p			13,400				12,870
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution out of current year profits by way of dividend for the year is £13,541,000 (2012 - £13,564,000).
					2013			2012			2013 £'000				2012 £'000
	Dividends paid and payable in respect of the year:
	First interim (paid 28 June 2013)				2.50p			2.40p			3,317				3,184
	Second interim (paid 27 September 2013)				2.55p			2.45p			3,383				3,251
	Third interim (paid 20 December 2013)				2.55p			2.45p			3,383				3,251
	Current year's proposed final dividend (payable 11April 2014)				2.60p			2.50p			3,450				3,317
					10.20p			9.80p			13,533				13,003
	If approved the final dividend of 2.60p per ordinary share will be paid on 11 April 2014 to all shareholders on the register at the close of business on 7 March 2014. The ex-dividend date is 5 March 2014. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for the receipt of elections for reinvestment of this dividend is 21 March 2014.
5.	The fair value of the 8% Debenture Stock 2022 at 31 December 2013 was £100.6m (2012 - £109.2m).
6.	The Company allotted no shares in the year to 31 December 2013 (2012 - allotted no ordinary shares). At 31 December 2013 the Company had authority to buy back 19,888,123 ordinary shares and to allot 13,267,592 ordinary shares without application of pre-emption rights in accordance with the authorities granted at the AGM in April 2013. No shares were bought back during the year.
7.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2013. The financial information for 2012 is derived from the statutory accounts for 2012 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2013 and 2012 accounts, their reports were unqualified and did not contain a statement under section 495 to 497 of the Companies Act 2006. The statutory accounts for 2013 will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at 11.00am on Thursday 3 April 2014.
8.	The Report and Accounts will be available on the SAINTS page of the Managers' website www.saints-it.com on or around 3 March 2014.‡

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

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

- ends -

 

END

 

 

FR UOURRSWAORAR