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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Scottish Oriental Smaller Companies Trust Plc | LSE:SST | London | Ordinary Share | GB0007836132 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 10.00 | 0.72% | 1,395.00 | 1,380.00 | 1,395.00 | 1,395.00 | 1,395.00 | 1,395.00 | 6,871 | 11:09:55 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 30.99M | 20.4M | 0.8220 | 16.97 | 346.2M |
From May 2019 to May 2024
TIDMSST
RNS Number : 6058M
Scottish Oriental Smlr Co Tst PLC
14 October 2016
THE SCOTTISH ORIENTAL SMALLER COMPANIES TRUST PLC
Annual Financial Report for the year ended 31 August 2016
Financial Highlights
Hot Features
Premium
Performance for the year ended 31 August 2016
(audited)
Net Asset MSCI AC Asia ex Japan
Value * 31.5% Index (GBP) * 33.0%
MSCI AC Asia ex Japan
Share Price Small Cap Index (GBP)
* 27.3% * 28.9%
Dividend Maintained FTSE All-Share Index
at 11.5p per share (GBP) * 11.7%
* Total return (capital return with dividends
reinvested).
Summary Data
at 31 August 2016 (audited)
Shares in issue 31,020,163 Shareholders' Funds GBP324.8m
Net Asset Value 1,047.12p Market Capitalization GBP280.7m
per share
Share Price Discount
Share Price 904.75p to Net Asset Value 13.6%
Excludes shares held in Treasury.
Investment Policy and Objective
-- The Scottish Oriental Smaller Companies Trust PLC ("Scottish Oriental", "the Company" or "the Trust") aims to achieve long-term capital growth by investing in mainly smaller Asian quoted companies.
-- The Trust invests mainly in the shares of smaller Asian quoted companies, that is, companies with market capitalisations of below US$1,500m, or the equivalent thereof, at the time of first investment.
-- The Trust may also invest in companies with market capitalisations of between US$1,500m and US$3,000m at the time of first investment, although not more than 20 per cent of the Trust's net assets at the time of investment will be invested in such companies.
-- To enable the Trust to participate in new issues, it may invest in companies which are not quoted on any stock exchange, but only where the Investment Manager expects that the relevant securities will shortly become quoted.
-- For investment purposes, the investment Region includes China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam. Countries in other parts of Asia may be considered with approval of the Board.
-- With the objective of enhancing capital returns to shareholders, the Directors of the Trust will consider the use of long-term borrowings up to a limit of 50 per cent of the net assets of the Trust at the time of borrowing.
-- The Trust invests no more than 15 per cent of its gross assets in other listed investment companies (including listed investment trusts).
-- The Trust invests no more than 15 per cent of its total assets in the securities of any one company or group of companies at the time of investment.
-- The Trust reserves the right to invest in equity-related securities (such as convertible bonds and warrants) of companies meeting its investment criteria. In the event that the Investment Manager anticipates adverse equity market conditions, the Trust may invest in debt instruments in any country or currency.
-- The majority of the Trust's assets are denominated in Asian currencies or US dollars. The Trust reserves the right to undertake foreign exchange hedging of its portfolio.
Business Model and Strategy for Achieving Objectives
-- We aim to maximise the rate of return with due regard to risk. Risk is principally contained by focusing on soundly managed and financially strong companies, and by ensuring that the portfolio is reasonably well diversified geographically and by sector at all times. Quantitative analysis demonstrating the diversification of the Trust's portfolio of investments is contained in the country allocation and sector allocation analysis within the Portfolio Managers' Report and Portfolio Review.
-- While cultural, political, economic and sectoral influences play an important part in the decision-making process, the availability of attractively-priced, good quality companies with solid long-term growth prospects is the major determinant of investment policy.
-- Our country weightings bear no relationship to regional stock market indices. We do not consider ourselves obliged to hold investments in any individual market, sector or company.
-- Existing holdings are carefully scrutinised to ensure that our corporate performance expectations are likely to be met, and that market valuations are not excessive. Where otherwise, disposals are made.
-- Strong emphasis is placed on frequent visits to countries of the Region and on meeting the management of those companies in which the Trust is invested, or might invest.
Chairman's Statement
Scottish Oriental's Net Asset Value ("NAV") per share rose by 31.5 per cent in total return terms over the 12 months, while the MSCI AC Asia ex Japan Index rose by 33.0 per cent on the same basis. The share price increased in total return terms by 27.3% as the discount widened. A performance fee was not earned this year.
Revenue return per share was 9.50p compared to 15.58p last year. This fall is because of a special dividend paid last year by Asia Satellite Telecom which added 6.08p to revenue. We are proposing an unchanged dividend of 11.5p. The shortfall will be taken from the revenue reserve, as set out on page 47 of the Annual Report, reflecting our policy of using the reserve when necessary.
During the year the Company bought back 474,500 ordinary shares, of which 393,500 were held in Treasury at year end. Since the year end, a further 10,000 ordinary shares have been bought back for Treasury. The Board has no formal discount control mechanism, but will be prepared to buy back shares opportunistically and to issue new shares at a small premium to NAV, provided that in each case this is in the interests of continuing shareholders.
In April, we announced arrangements to cover the maternity leave of our lead portfolio manager Wee-Li Hee. Vinay Agarwal was appointed as interim lead portfolio manager for the Company, effective from 20 July 2016. Vinay is supported by Martin Lau, Scott McNab and the rest of the First State Stewart Asia team. With more than 13 years of investment management experience, Vinay runs both Indian and Far East equity portfolios.
You will see from our managers' report that they are finding it difficult to identify good quality companies at suitable valuations and therefore they have been very selective in making new investments. However, with smaller companies and Asia being somewhat out of favour, it is worth reiterating the investment case for Scottish Oriental. Asia's economies continue to grow more quickly than developed markets and the companies represent better value. Within Asia, smaller companies offer exposure to domestic consumption which is growing strongly, given the region's superior demographic profile and developing middle class. Notwithstanding the current economic environment, the companies in which Scottish Oriental has invested should flourish in the years to come. The yield on our current equity portfolio is 2.6% and the historic price earnings ratio is 16 times, which, whilst higher than the historic average, has fallen from recent highs.
Following a review of the composition of the Board, we have decided to appoint an additional director. An announcement about this will be made in due course.
This year the Annual General Meeting will be held in London at the offices of First State Investments, Finsbury Circus House, 15 Finsbury Circus. There will be a brief presentation by our investment manager. I look forward to seeing shareholders there.
James Ferguson
Chairman
14 October 2016
Portfolio Manager's Report
Summary
In the year ending 31 August 2016, all Asian equity markets rose when measured in sterling. The Federal Reserve finally increased interest rates in December 2015 citing expanding economic activity. Positive sentiment was short-lived with a tumultuous start to 2016. China's stock markets led world markets down with the almost inevitable result of further economic stimuli and interest rate cuts from policymakers worldwide. Japan surprised markets by adopting negative interest rates for the first time ever in January and the European Central Bank lurched further into negative interest rate territory in March. Oil was initially very weak, almost halving between its October high and January on oversupply and growth concerns but rallied along with equity markets. By contrast, gold was very strong in January as investors grew wary and indeed weary of money printing. Gold continued to strengthen over 2016. Asian markets also strengthened for the rest of 2016 as short term expectations of further US interest rate rises diminished and Asian central banks loosened monetary policies. The impact of the Brexit vote was short-lived with stock markets quickly recovering from the initial sell-off. The impact on sterling was more marked which flattered returns for Scottish Oriental.
Scottish Oriental generated strong absolute returns over the year. Most of these returns, however, resulted from the pound's depreciation against Asian currencies. The Company underperformed its benchmark index with the biggest detractor from its relative performance being a low exposure to the Korean market, which performed strongly, as well as poor performance from its two Korean holdings, Amorepacific Group and Hana Tour Service.
Little has changed in our outlook for Asian markets, which remains uncertain. Despite the increasing prevalence of negative interest rates in developed markets, global growth remains muted. This lack of growth has resulted in challenging export conditions for Asian corporates. Low, and particularly negative, interest rates are likely to have many unforeseen consequences, but for now there are few inflationary pressures. If anything, the build-up of debt may become deflationary if cash flows are directed towards debt repayment. While inflation remains muted, interest rate cuts are more likely than increases in Asia as central banks look to stimulate domestic economies and avoid currency strength.
Valuations of the Company's holdings are high compared to its history but interest rates are as low as they have ever been. It is possible to make a case for the rationality of such valuations when using these record low interest rates in a discounted cash flow model or indeed comparing the dividend yields of many of our favoured companies to what can be earned on cash deposited in a savings account. Our concern remains that interest rates may return to their long term historic average. When this happens, in the absence of anything other than strong growth, equities will look less attractive than they do now. The difficulty is that we have little ability to forecast what central bankers might do and when.
Therefore, our focus remains the preservation of capital in both absolute and real terms, that is, we wish to avoid losing money but also want to preserve purchasing power. To this end, Scottish Oriental remains heavily invested in Asian focused businesses with defensible franchises that should be long-term winners no matter what the economic and monetary backdrop. We continue to place a significant emphasis on Indian companies where we find both growth and some of the best management teams in Asia. Pockets of value have been found in Taiwan and Indonesia recently and we continue to generate new investment ideas in India. The longer-term case for investing in Asia remains unchanged with the region's attractive demographics and expanding middle class providing the structural growth that is missing in the developed world.
Vinay Agarwal
Martin Lau
Scott McNab
First State Investment Management (UK) Limited, Investment Manager
14 October 2016
Country Allocation at 31 August 2016 (based on geographical area of activity)
Scottish MSCI
Country/Region Oriental MSCI* Small Cap
% % %
China 15.4 31.1 24.2
Hong Kong 4.9 12.2 8.3
Taiwan 13.2 14.1 17.7
---------- -------- -----------
Greater China 33.5 57.4 50.2
---------- -------- -----------
Indonesia 4.7 3.2 2.5
Malaysia 2.4 3.2 3.5
Philippines 3.2 1.7 1.3
Singapore 12.5 4.5 6.2
Thailand 4.7 2.7 4.1
Vietnam 0.3 0.0 0.0
---------- -------- -----------
South East
Asia 27.8 15.3 17.6
---------- -------- -----------
India 23.6 9.8 12.5
Sri Lanka 3.0 0.0 0.0
---------- -------- -----------
Indian Subcontinent 26.6 9.8 12.5
---------- -------- -----------
South Korea 3.7 17.5 19.7
---------- -------- -----------
Net current
assets 14.5 - -
Loan (6.1) - -
---------- -------- -----------
Net assets 100.0 100.0 100.0
---------- -------- -----------
* Morgan Stanley Capital International AC Asia ex Japan
Index
Morgan Stanley Capital International AC Asia ex Japan
Small Cap Index
Stock Market Performance for the year ending 31 August 2016
Local Currency
Country Sterling %
%
China 27.1 8.4
Hong Kong 32.0 12.5
Taiwan 37.5 14.2
Indonesia 53.9 23.7
Malaysia 32.5 9.0
Philippines 30.8 11.0
Singapore 21.2 (0.2)
Thailand 40.0 15.1
Vietnam 23.7 4.5
India 26.4 8.4
Sri Lanka 2.8 (5.3)
South Korea 43.8 15.4
MSCI* 33.0 13.3
* Morgan Stanley Capital International AC Asia ex Japan Index
Greater China
China underperformed despite its economy showing signs of stabilising. The domestic stock markets crashed at the start of 2016, partly on currency concerns as capital outflows accelerated. After a somewhat chaotic response from the authorities, markets were permitted to fall. The renminbi was allowed to weaken over the year in an attempt to stimulate growth. With recent reports of robust domestic consumption and an increase in fixed asset investment by state-owned enterprises, the country's large problem loans do not appear to be a concern for markets currently. However, longer term the same challenges face the central government: namely state-owned-enterprise reform; over-capacity in a number of industries; high corporate and public debt levels; declining exports; and balancing economic growth with the health of the environment.
Scottish Oriental's overall exposure to China is relatively unchanged over the year. However, we sold three holdings - clothing retailers, Trinity and YGM Trading, and knitted fabric manufacturer Pacific Textiles, choosing to focus our attention on the remaining holdings. Trinity and YGM Trading have found the slowdown in luxury retail in China and Hong Kong an incredibly difficult challenge and we doubt the situation will improve in the medium term.
Hong Kong's economy was challenged with apartment prices, retail spending and exports falling over the year. This has resulted in weak employment and poor overall sentiment. A somewhat antagonistic approach to mainland China from segments of society is unlikely to help the situation. With robust institutions, excellent infrastructure and the rule of law, Hong Kong remains an important conduit for China but this role is by no means guaranteed.
The Company's exposure to Hong Kong was reduced over the year with Dickson Concepts and Tao Heung Holdings sold - both companies struggled in the more difficult retail environment in Hong Kong and China.
Taiwan's stock market performed strongly over the year despite its weak domestic economy and declining exports. The technology sector performed strongly driven by companies in the Apple supply chain. The new President Tsai Ing-wen has, so far, navigated relations with mainland China well, given Beijing's inherent suspicion of her pro-independence DPP party. Taiwan's future remains very much intertwined with that of China and its economy is dependent on global growth as a consequence of its reliance on exports.
Scottish Oriental's exposure to Taiwan increased over the year, predominantly as a result of strong performance from its holdings. We bought three new companies for the Company: garment manufacturer Makalot Industrial; networking equipment manufacturer Wistron NeWeb and point-of-sale-terminal producer Posiflex. These replaced pneumatic components producer Airtac; point-of-sale-terminal producer Flytech; and plastics and chemicals supplier Wah Lee Industrial.
South East Asia
Indonesia was the best performing stock market in Scottish Oriental's universe benefiting from a succession of interest rate cuts and economic stimulus packages. President Jokowi has managed to significantly reduce energy subsidies freeing up budgetary capacity for much-needed infrastructure spending. Moderating inflation and a manageable current account deficit give scope for further interest rate cuts which could serve to provide further stimulus to the domestic economy. Sharp rises in the minimum wage over the last several years have boosted domestic consumption but at the expense of Indonesia's regional competitiveness.
Scottish Oriental's exposure to Indonesia increased during the year. Ace Hardware was sold on valuation concerns but two new holdings were purchased. Acset Indonusa, a contractor specialising in high-rise building foundations, and Mitra Adiperkasa, a branded retailer, should both benefit from the growing economy.
Malaysia's economy continued to be weak and the central bank cut interest rates for the first time since 2009 in an attempt to stimulate the economy, with further reductions expected. The ongoing financial controversy regarding the government-owned strategic development company, 1Malaysia Development Berhad, continues to hurt perceptions of the government. However, the opposition coalition is in disarray, raising the possibility that the government will hold early general elections. The continued pro-Malay stance of the government remains an issue as it undermines Malaysia's competitiveness.
The Company's Malaysian portfolio is relatively unchanged over the year.
The Philippines saw the inauguration of President Duterte. His diplomatic gaffes and the spate of extra judicial killings of purported drug dealers since he took office are unnerving. However, Duterte has been fortunate enough to inherit an economy in robust shape and there is capacity for his intended focus on infrastructure spending which should further boost consumption. Apart from the risk posed by President Duterte's combative style, falling exports combined with rising imports and a slowing in the growth of overseas remittances could see the current account slide into a deficit next year.
Scottish Oriental's exposure to the Philippines increased over the year through additions to its existing holdings and the purchase of Integrated Microelectronics, an electronics manufacturer controlled by the respected Ayala Group.
Singapore was the second-worst performing market we invest in. It continued to suffer from weak external demand and a lacklustre domestic economy as it battles against falling productivity, rising living costs and an ageing population. The government has maintained its restrictive policy on foreign labour which has kept unemployment levels low. The general election held in 2015 saw the ruling party returned with an increased majority. Singapore is a prisoner of global economic conditions but has a government that is far from complacent and is endeavouring to position Singapore well for the future.
The Company continues to have a large position in Singapore but significantly reduced its exposure over the year. Four companies were sold - Mechanical component manufacturer Interplex and traditional Chinese medicine retailer Eu Yan Sang were privatised; Singapore Post was sold following a number of senior management departures; and Ezion Holdings was sold on a bleak outlook for the offshore marine services sector. By contrast, only one new investment was made in iFast, an operator of investment platforms in several Asian countries.
Thailand's economy has been subdued with poor sentiment and high household indebtedness curtailing domestic spending. Private investment is still weak but the government is making progress in its infrastructure plans which should help support the economy. Tourism has remained strong but is vulnerable to an ongoing campaign of terror bombings. A referendum on a new constitution was passed in August which cements the military's role in Thai politics which is very much a step backwards for democracy in the kingdom. Despite this, the stock market performed strongly over the year.
The overall exposure to Thailand was relatively unchanged with the sale of MC Group, the leading domestic jeans company but with limited growth prospects, and the purchase of Hana Microelectronics, a sensibly managed electronics manufacturer.
Vietnam saw a new pro-business administration led by Prime Minister Phuc. The growth in its economy has disappointed this year because of the impact of a severe drought on its agriculture sector but its manufacturing sector has continued to gain market share from other countries in the region. The new government needs to further reduce corruption, continue to reform state-owned enterprises, and invest in infrastructure whilst balancing the books. If it can achieve this then the outlook should be positive even if the beneficial Trans-Pacific Partnership is not ratified, which seems likely given US politics.
Scottish Oriental made its first direct investment in Vietnam during the year. FPT is a leading provider of information technology outsourcing and telecommunication services in the country.
Indian Subcontinent
India was relatively weak. The progress of economic reform by Prime Minister Narendra Modi and the Bharatiya Janata Party faltered with a deadlock in parliament slowing the passage of much-needed legislation. However, progress was subsequently made with an increase in some foreign direct investment limits and the passing of a bankruptcy law. The government has also commenced the massive task of recapitalising the public sector banks. We are optimistic that foundations for more sustainable growth are being laid.
During the year, Scottish Oriental maintained its overall exposure to India. However, four positions were sold - Blue Dart Express, Indian Hotels, Pidilite Industries and Trent - and six new stocks were purchased - Blue Star, Gujarat Gas, Hexaware Technologies, Mahanagar Gas, Mphasis and Suprajit Engineering.
Sri Lanka's economy struggled over the year and its stock market also performed poorly. A rising fiscal deficit and falling foreign exchange reserves necessitated a bailout loan by the International Monetary Fund. The central bank also increased interest rates twice in an attempt to contain rising inflation. Much still needs to be done to stamp out corruption, ensure fair competition and reduce the fiscal deficit without impacting growth.
The Company decreased its exposure to Sri Lanka by selling conglomerate CT Holdings and reducing its position in telecom operator Dialog Axiata. A position was initiated in Commercial Bank of Ceylon, in our view the best managed bank in the country.
South Korea
South Korea's stock market performed strongly during the year with its information technology sector performing well. By contrast, the domestic economy remained weak and the necessary restructuring of the shipbuilding sector will likely see job losses and put pressure on banks that have extended loans to the shipbuilders. The country's anti-corruption legislation, which takes effect in September, is a long term positive but will reduce consumption in the short term. There was little sign of real improvement to corporate governance and this continues to make South Korea a difficult market for us.
The Company's exposure to South Korea fell over the year with the sale of rice cooker manufacturer Cuckoo Electronics and poor performance from its other holdings.
Performance of individual equity holdings for the year ending 31 August 2016
Company Country Contribution % of Shareholders'
Performance Funds
% at 31 August
2016
Best
-------------------- ----------- ------------- -------------------
Minth China 3.1 3.0
-------------------- ----------- ------------- -------------------
Sunny Optical China 2.0 1.3
-------------------- ----------- ------------- -------------------
Marico India 1.6 1.8
-------------------- ----------- ------------- -------------------
Tong Ren Tang China 1.6 3.0
-------------------- ----------- ------------- -------------------
Kansai Nerolac
Paints India 1.3 2.2
Worst
-------------------- ----------- ------------- -------------------
South
Hana Tour Service Korea (0.6) 1.2
-------------------- ----------- ------------- -------------------
Pacific Basin
Shipping Hong Kong (0.4) 1.0
-------------------- ----------- ------------- -------------------
Tao Heung Holdings Hong Kong (0.3) -
-------------------- ----------- ------------- -------------------
Ezion Holdings Singapore (0.3) -
-------------------- ----------- ------------- -------------------
China BlueChemical China (0.1) 0.8
-------------------- ----------- ------------- -------------------
Minth, a producer of automobile body parts, announced strong results during the year that showed continued growth and an end to the falling margins that had accompanied its expansion. Sunny Optical also announced strong results with revenues and profits rising as its camera lenses and modules increasingly gain acceptance. Marico's strong brands continued to perform. Tong Ren Tang saw strong growth in demand for its traditional Chinese medicines. Kansai Nerolac Paints benefited from an increase in demand and market share gains.
Hana Tour Service was impacted by significant losses on its start-up duty free stores business. Having met company management we continue to back them, in the belief that there will be a turnaround in the performance of its new venture and its core tour business remains strong. Pacific Basin Shipping was hurt by low bulk shipping rates and chose to bolster its balance sheet with a rights issue during the year. We believe that we are nearing the bottom of the global shipping cycle and as such the valuation of the company is attractive. Profits at Tao Heung Holdings' restaurants were hit by rising rents and payroll costs as well as greater competition and a weak economy. Ezion Holdings faltered in the low oil price environment with customers postponing deliveries and delaying new contracts. China BlueChemical suffered from low selling prices for its nitrogenous fertilisers, however, it is attractively valued at 0.4 times its book value and has a net cash balance sheet.
Portfolio Review
Scottish Oriental's portfolio of investments is well diversified not only by country but also by sector. The largest country exposure is India with a 23.6 per cent position. Consumer Staples accounted for 17.7 per cent of the portfolio, the largest sector weighting. As at 31 August 2016, Scottish Oriental was invested in 76 different companies with the largest holding, Minth, accounting for 3.0 per cent of the Portfolio. The aggregate of the Company's ten largest holdings was 25.9 per cent.
Sector Allocation at 31 August 2016
Sector %
Consumer Staples 17.7
Consumer Discretionary 14.8
------
32.5
Information Technology 15.4
Industrials 13.1
Financials 9.8
Health Care 6.8
Materials 6.5
Utilities 4.5
Telecommunication Services 3.0
------
91.6
Net current assets 14.5
Loan (6.1)
Net assets 100.0
------
Scottish Oriental's exposure to the Consumer Staples sector fell over the year primarily as a result of the sale of CT Holdings, where we felt management were distracted by operating too many businesses, and a reduction in its position in Marico on expensive valuations.
The Company's holdings in the Consumer Discretionary sector decreased over the period. Ten positions in total were sold. Three of these - Ace Hardware, Cuckoo Electronics and Indian Hotels - were sold on valuation grounds. Seven - Dickson Concepts, MC Group, Pacific Textiles, Tao Heung Holdings, Trent, Trinity and YGM - were sold on a challenging outlook for growth. By contrast, only three new companies were purchased - Makalot Industrial, Mitra Adiperkasa and Suprajit Engineering, India's largest manufacturer of automotive cables.
Scottish Oriental's position in the Information Technology sector increased, owing to strong performance from holdings such as Sunny Optical and Chroma ATE, and establishing new positions in FPT, Hana Microelectronics, iFast, Integrated Microelectronics, Posiflex Technologies, Wistron NeWeb and two Indian information technology outsourcers - Mphasis and Hexaware Technologies. During the year we sold Flytech Technology to make space for Posiflex and Wah Lee Industrial where growth prospects looked dull.
The Company's exposure to Industrials was reduced with Airtac International and Blue Dart Express sold on valuation concerns as well as Interplex Holdings and Singapore Post sold. New investments were made in Acset Indonusa and Blue Star, India's leading air-conditioning and commercial refrigeration company.
Exposure to the Financials sector decreased with significant reductions in the Company's Holdings in Keck Seng Investments, Mahindra Lifespace and Tai Cheung Holdings not countering the increase in the position in China Banking and a new holding in Commercial Bank of Ceylon.
Scottish Oriental's Health Care weighting increased slightly with an addition to the existing position in Indoco Remedies and strong performance from Tong Ren Tang more than compensating for the sale of Eu Yan Sang.
Exposure to the Materials sector was relatively unchanged with the sale of Pidilite Industries on expensive valuations balanced by an increase to the Company's holding in Godrej Industries.
The Company's exposure to the Utilities sector increased with additions to existing holdings and new positions taken in Gujarat Gas and Mahanagar Gas - both benefiting for increased demand for natural gas in India.
Scottish Oriental's weighting in the telecoms sector fell with relatively poor performance from its holdings and a reduction in the position in Dialog Axiata.
The Company ended the year with no exposure to the energy sector following the complete sale of Ezion Holdings.
Vinay Agarwal
Martin Lau
Scott McNab
First State Investment Management (UK) Limited, Investment Manager
14 October 2016
Ten Largest Equity Holdings at 31 August 2016
Company Market Value % of Shareholders'
Funds
Minth China GBP9,746,659 3.0%
----------------------- --------------- -------------- -------------------
Established in 1997, Minth Group is a leading
supplier of exterior automobile body parts in
China, principally engaged in the design, manufacture
and sale of body structural parts, decorative
parts and trim for passenger cars. It is one of
the largest manufacturers of core products for
passenger cars in terms of sales in China. It
is the Tier-1 supplier to both multinationals
and Chinese automakers with more than 30 factories
in China, focusing on the industry leaders, both
globally and domestically.
Tong Ren Tang China GBP9,590,579 3.0%
----------------------- --------------- -------------- -------------------
Tong Ren Tang Technologies is one of the oldest
and most respected traditional Chinese medicine
companies in China. Offering a range of affordable
products for common ailments, the company's potential
comes from continuing product development and
launches, continuing growth of core products,
expansion of its domestic sales channels both
offline and online and its growing presence overseas.
Towngas China China GBP8,843,833 2.7%
----------------------- --------------- -------------- -------------------
Towngas China, a subsidiary of Hong Kong & China
Gas, operates a gas distribution business in China.
Its business includes the sale of LPG and piped
gas to residential and commercial customers. The
company also undertakes the construction of gas
pipelines and other gas related services. The
company continues to grow via investment in its
existing operations as well as through acquisitions.
Earnings should also benefit from management's
focus on reducing costs and greater integration
of the existing operations.
Standard Foods Taiwan GBP8,702,260 2.7%
------------------------- ------------- -------------- -------------------
Standard Foods is a family-run food manufacturer
in Taiwan and China. It is engaged in the production
and distribution of health food, edible oil products,
dairy products and beverages with strong niche
market positions. It also holds the Quaker Oats
franchise for Taiwan. The company's brands enable
it to generate robust cash flows. Strong stewardship
from the chairman furthers the investment case.
Taiwan Familymart Taiwan GBP8,444,240 2.6%
----------------------- --------------- -------------- -------------------
Majority owned by Japan Familymart, Taiwan Familymart
has the exclusive right to operate Familymart
convenience stores in Taiwan and is the second
largest operator of convenience stores in the
country with an approximately 30 per cent market
share. This provides a steady platform for its
expansion across China in a joint venture with
its parent Japan Familymart and Tsing Hsin, owner
of the largest noodle manufacturer in China. This
joint venture is cautiously opening new stores
on the mainland which should enhance future earnings
growth for the company.
Raffles Medical Group Singapore GBP8,081,805 2.5%
------------------------- ------------- -------------- -------------------
Raffles Medical Group is the largest private medical
group practice in Singapore. Founded in 1976 by
the Chairman, Dr Loo Choon Yong, with just two
clinics, the group currently operates a network
of clinics and a tertiary care private hospital
with key specialities such as oncology and orthopaedics.
On a smaller scale, it also offers insurance services
and runs a consumer healthcare division. Future
earnings growth will come from an increase in
the number of hospital beds in Singapore as well
as further expansion of the network of medical
clinics in Singapore and other countries and its
new Shanghai hospital.
Amorepacific Group South Korea GBP8,006,293 2.5%
----------------------- --------------- -------------- -------------------
Amorepacific Group is a holding company whose
major asset is a significant stake in Amorepacific
Corp, Korea's leading domestic cosmetics company.
Amorepacific Corp has two key brands, Hera and
Sulwhasoo, which are sold domestically and overseas,
mainly in China and France. The group's other
businesses include cosmetics bottling, green tea
manufacturing and advertising services. Growth
will be determined by its expansion success in
China as well as through acquisitions.
Delfi Singapore GBP7,892,976 2.4%
----------------------- --------------- -------------- -------------------
Delfi Ltd, formerly known as Petra Foods, is a
manufacturer and distributor of its own brand
chocolate confectionery products in its core markets
of Indonesia, Malaysia, the Philippines and Singapore.
The group has an established portfolio of chocolate
confectionery brands with a dominant market share
in Indonesia. Delfi also distributes a portfolio
of well-known third party brands. Growth will
come as increased wealth leads to improving affordability
and thus rising consumption.
Delta Electronics Thailand GBP7,534,235 2.3%
----------------------- --------------- -------------- -------------------
Delta Electronics Thailand is a subsidiary of
Delta Electronics Taiwan which is about 40% owned
by group chairman Bruce Cheng. It is predominantly
an original design manufacturer for power supplies
and an original equipment manufacturer for other
related parts used for cloud computing (network
devices, storage and servers), telecommunication
systems and industrial and medical devices. Management
is professional and innovative and the company
has a strong balance sheet.
Kansai Nerolac Paints India GBP7,067,015 2.2%
------------------------ -------------- -------------- -------------------
Kansai Nerolac is the third largest paint company in India. It is the market leader in industrial and automotive paints and a leading company in decorative paints. Majority owned by Kansai Paints of Japan, a global leader in automotive paints, the company benefits from strong technological support and established relationships with key automotive customers from its parent. It is expected to be a beneficiary of recovering automotive demand, an improving property development market and the home improvement trend in India.
Vinay Agarwal
Martin Lau
Scott McNab
First State Investment Management (UK) Limited, Investment Manager
14 October 2016
Ten Year Record
Capital
Market Shareholders' Discount
Year ended Capitalisation Funds NAV Share Price to NAV
31 August GBPm GBPm (p) (p) %
2007 94.87 104.14 344.67 314.00 (8.9)
2008 79.16 94.50 312.78 262.00 (16.2)
2009 98.95 113.86 376.85 327.50 (13.1)
2010 146.08 167.76 555.26 483.50 (12.9)
2011 181.28 186.89 618.56 600.00 (3.0)
2012 182.19 201.60 667.26 603.00 (9.6)
2013 232.19 253.63 801.53 733.75 (8.5)
2014 268.65 283.82 896.93 849.00 (5.3)
2015 227.39 257.18 816.57 722.00 (11.6)
2016 280.65 324.82 1047.12 904.75 (13.6)
Revenue
Ongoing
Available Earnings Dividend charges
Gross for ordinary per per Ongoing incl. Actual Potential
Year ended Revenue shareholders share* share charges perf. gearing gearing
31 August GBP000 GBP000 p (net) % fee ++ <OHM>
p %
2007 3,379 1,812 6.35 4.60 0.83 - 94 101
2008 3,643 2,008 6.64 5.00 0.78 - 98 101
2009 3,744 2,307 7.63 6.00 1.04 - 94 101
2010 4,940 3,197 10.58 8.50 1.00 1.65 94 101
2011 5,726 3,443 11.39 9.00 1.01 2.29 95 111
2012 7,073 4,348 14.39 11.00 1.01 1.96 97 110
2013 7,903 4,518 14.56 11.50 1.03 1.73 88 108
2014 6,339 3,035 9.59 11.50 1.03 1.36 93 107
2015 8,716 4,929 15.58 11.50 1.01 1.05 95 108
2016 6,740 2,966 9.50 11.50 1.04 1.04 92 106
* The calculation of earnings per share is based on the revenue from ordinary activities after taxation and the weighted average number of ordinary shares in issue.
Management fee and all other operating expenses, excluding interest, expressed as a percentage of the average daily net assets during the year (2011 and prior: expressed as a percentage of the average month end net assets during the year).
++ Total assets less current liabilities and all cash and fixed interest securities (excluding convertibles) divided by shareholders' funds.
<OHM> Total assets less current liabilities divided by shareholders' funds.
Cumulative Performance (taking year ended 31 August 2006 as 100)
MSCI AC
Asia ex FTSE All
Year ended NAV Share Japan Share Earnings Dividend
31 August price Index Index per share per share
2006 100 100 100 100 100 100
2007 123 128 137 108 133 128
2008 112 107 121 95 139 139
2009 135 133 129 84 160 167
2010 199 197 156 90 221 236
2011 222 244 158 93 238 250
2012 239 246 153 99 301 306
2013 287 299 164 113 305 319
2014 321 346 181 121 201 319
2015 292 294 160 114 326 319
2016 375 369 207 123 199 319
Strategic Report
The purpose of this report is to provide shareholders with details of the Company's strategy and business model as well as the principal risks and challenges the Company has faced during the year under review.
The Board is responsible for the stewardship of the Company, including overall strategy, investment policy, borrowings, dividends, corporate governance procedures and risk management. Biographies of the directors can be found on page 16 of the Annual Report.
The Board assesses its performance in meeting the Company's objectives against the following Key
Performance Indicators, details of which can be found in the Financial Highlights, Ten Year Record,
Chairman's Statement and Portfolio Managers' Report:
-- the movement in net asset value per ordinary share on a total return basis; -- the movement in the share price on a total return basis; -- the discount; and -- ongoing charges.
Business and Status
The Company is an investment company within the meaning of section 833 of the Companies Act 2006.
The Company carries on the business of an investment trust. The Company has been approved as an investment trust by HM Revenue and Customs subject to the Company continuing to meet eligibility conditions. The Company intends to conduct its affairs so as to enable it to comply with the ongoing requirements.
Business Model and Strategy for Achieving Objectives
-- We aim to maximise the rate of return with due regard to risk. Risk is principally contained by focusing on soundly managed and financially strong companies, and by ensuring that the portfolio is reasonably well diversified geographically and by sector at all times. Quantitative analysis demonstrating the diversification of the Trust's portfolio of investments is contained in the country allocation and sector allocation analysis within the Portfolio Managers' Report and Portfolio Review.
-- While cultural, political, economic and sectoral influences play an important part in the decision-making process, the availability of attractively-priced, good quality companies with solid long-term growth prospects is the major determinant of investment policy.
-- Our country weightings bear no relationship to regional stock market indices. We do not consider ourselves obliged to hold investments in any individual market, sector or company.
-- Existing holdings are carefully scrutinised to ensure that our corporate performance expectations are likely to be met, and that market valuations are not excessive. Where otherwise, disposals are made.
-- Strong emphasis is placed on frequent visits to countries of the Region and on meeting the management of those companies in which the Company is invested, or might invest.
Investment Policy and Objective
-- The Scottish Oriental Smaller Companies Trust plc aims to achieve long-term capital growth by investing in mainly smaller Asian quoted companies.
-- The Trust invests mainly in the shares of smaller Asian quoted companies, that is, companies with market capitalisations of below US$1,500m, or the equivalent thereof, at the time of first investment.
-- The Trust may also invest in companies with market capitalisations of between US$1,500m and US$3,000m at the time of first investment, although not more than 20 per cent of the Trust's net assets at the time of investment will be invested in such companies.
-- To enable the Trust to participate in new issues, it may invest in companies which are not quoted on any stock exchange, but only where the Investment Manager expects that the relevant securities will shortly become quoted.
-- For investment purposes, the investment Region includes China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam. Countries in other parts of Asia may be considered with approval of the Board.
-- With the objective of enhancing capital returns to shareholders, the Directors of the Trust will consider the use of long-term borrowings up to a limit of 50 per cent of the net assets of the Trust at the time of borrowing.
-- The Trust invests no more than 15 per cent of its gross assets in other listed investment companies (including listed investment trusts).
-- The Trust invests no more than 15 per cent of its total assets in the securities of any one company or group of companies at the time of investment.
-- The Trust reserves the right to invest in equity-related securities (such as convertible bonds and warrants) of companies meeting its investment criteria. In the event that the Investment Manager anticipates adverse equity market conditions, the Trust may invest in debt instruments in any country or currency.
-- The majority of the Trust's assets are denominated in Asian currencies or US dollars. The Trust reserves the right to undertake foreign exchange hedging of its portfolio.
A portfolio review by the Investment Manager is provided above and the investments held at the year end are contained in the Company's Annual Report.
Investment Manager
First State Investment Management (UK) Limited has been Investment Manager since 20 March 1995. In order to comply with the Alternative Investment Fund Managers Directive, with effect from 2 July 2014 the Company terminated its investment management agreement with First State Investment Management (UK) Limited and appointed First State Investments (UK) Limited as its Alternative Investment Fund Manager. First State Investments (UK) Limited delegated portfolio management services to First State Investment Management (UK) Limited.
A summary of the terms of the Investment Management Agreement is contained in Note 2 of the Accounts on page 45 of the Annual Report.
The Board regularly appraises the performance and effectiveness of the investment management arrangements of the Company. As part of this process, such arrangements are reviewed formally once a year. In relation to the Board's formal review, the performance and effectiveness of such arrangements are measured against certain criteria. These include the Company's growth and return; performance against the Company's peer group; the success of the Company's investment strategy; the effectiveness, quality and standard of investment resource dedicated by the Investment Manager to the Company; and the level of the Investment Manager's fee in comparison to its peer group.
The Board, having conducted its review, considers that the Investment Manager's continued appointment as investment manager to the Company is in the best interests of shareholders.
Principal Risks and Uncertainties
The Board believes that the principal risks facing the Company relate to the Company's investment activities and include market risk, interest rate risk, foreign currency risk, other price risk, liquidity risk and credit risk. An explanation of these risks and how they are managed is contained on pages 50 to 53 of the Annual Report.
Other risks faced by the Company include breach of regulatory rules which could lead to suspension of the Company's Stock Exchange listing, financial penalties, or a modified audit report. Breach of Section 1158 of the Corporation Tax Act 2010 could lead to the Company losing its approval as an investment trust and being subject to tax on capital gains.
In the mitigation and management of these risks, the Board regularly monitors the investment environment and the management of the Company's investment portfolio, and applies the principles detailed in the guidance provided by the Financial Reporting Council. Compliance with regulatory rules is monitored on a daily basis by the Company Secretary who reports to the Board at each Board Meeting. The Company's internal controls are described in more detail on page 25 of the Annual Report.
Social, Community and Human Rights Issues
The Company has given discretionary voting powers to the Investment Manager. The Board supports the integration by the Investment Manager of environmental, social and governance issues in its investment decision making. In the Investment Manager's view, this assists the sustainable performance of the Company.
The Board and Outlook
The Company has four Directors. Three are women and one is a man. The Company has no employees.
The Chairman provides an outlook for the Company in his statement on page 2 of the Annual Report.
On behalf of the Board
Steven K Davidson
Company Secretary
14 October 2016
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations.
Company law requires the Directors to prepare accounts for each financial year.
Under that law the Directors have elected to prepare the accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland". Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Company for that period. In preparing these accounts, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and accounting estimates that are reasonable and prudent; and
-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts.
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 accounts 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.
The Directors confirm that suitable accounting policies, applied consistently and supported by reasonable and prudent judgements and estimates, have been used in the preparation of the accounts and that applicable accounting standards have been followed.
The accounts are published on the Company's website www.scottishoriental.com which is maintained by the Investment Manager. The maintenance and integrity of the corporate and financial information relating to the Company is the responsibility of the Investment Manager. The work carried out by the auditor does not involve consideration of the maintenance and integrity of this website and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the accounts since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
Each of the Directors confirms that to the best of his or her knowledge:
-- the accounts, prepared in accordance with applicable United Kingdom accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
-- the Strategic Report and the Directors' Report include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces.
By order of the Board
James Ferguson
Chairman
14 October 2016
Income Statement for the year ended 31 August 2016 (audited)
2016 2015
Revenue Capital Total* Revenue Capital Total*
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on
investments [Note
8] - 69,895 69,895 - (28,037) (28,037)
Income from investments
[Note 1] 6,657 - 6,657 8,623 - 8,623
Other income [Note
1] 83 - 83 93 - 93
Investment management
fee [Note 2] (2,110) - (2,110) (2,136) (107) (2,243)
Currency gains - 1,801 1,801 - 1,268 1,268
Other administrative
expenses [Note 3] (731) - (731) (779) - (779)
-------- -------- -------------- -------- ---------- ----------------
Net return before
finance costs and
taxation 3,899 71,696 75,595 5,801 (26,876) (21,075)
Finance costs of borrowing
[Note 4] (629) - (629) (630) - (630)
-------- -------- -------------- -------- ---------- ----------------
Net return on ordinary
activities before
taxation 3,270 71,696 74,966 5,171 (26,876) (21,705)
Tax on ordinary activities
[Note 5] (304) - (304) (242) - (242)
-------- -------- -------------- -------- ---------- ----------------
Net return attributable
to equity
shareholders 2,966 71,696 74,662 4,929 (26,876) (21,947)
-------- -------- -------------- -------- ---------- ----------------
Net return per ordinary
share [Note 7] 9.50p 229.72p 239.22p 15.58p (84.95p) (69.37p)
* The total column of this statement is the Profit and Loss Account of the Company. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
There are no items of other comprehensive income, therefore this statement is the single statement of comprehensive income of the Company.
The Board is proposing a dividend of 11.50p per share for the year ended 31 August 2016 (2015: 11.50p per share) which, if approved, will be payable on 20 January 2017 to shareholders recorded on the Company's shareholder register on 9 December 2016.
The accounting policies and the notes on the accounts can be found below.
All revenue and capital items derive from continuing operations.
Summary Statement of Financial Position as at 31 August 2016 (audited)
2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
FIXED ASSETS - EQUITY
INVESTMENTS [Note 8] 297,737 243,170
Current Assets:
Debtors [Note 9] 7,458 3,312
Cash and deposits 47,352 31,974
-------- --------
54,810 35,286
Current Liabilities
(due within one year)
Creditors [Note 10] (7,728) (1,281)
-------- --------
(7,728) (1,281)
Net Current Assets 47,082 34,005
---------- ---------
Total Assets less Current
Liabilities 344,819 277,175
Creditors (due after
one year)
Loan [Note 11] (20,000) (20,000)
---------- ---------
Equity shareholders'
funds 324,819 257,175
========== =========
Represented by
Capital and reserves
Ordinary share capital
[Note 12] 7,853 7,874
Share premium account 34,259 32,940
Capital redemption
reserve 58 37
Warrant reserve exercised - 1,319
Capital reserve 272,611 204,321
Revenue reserve 10,038 10,684
---------- ---------
324,819 257,175
========== =========
Net asset value per
share [Note 13] 1,047.12p 816.57p
The accounting policies and the notes on the accounts can be found below.
Summary Cash Flow Statement for the year ended 31 August 2016 (audited)
2016 2015
GBP'000 GBP'000
Net cash outflow from operations
before dividends, interest,
purchases and sales [Note 14] (3,191) (3,824)
Dividends received from investments 6,389 8,503
Interest received from deposits 83 99
Purchases of investments (72,604) (58,009)
Sales of investments 90,814 48,844
Cash from operations 21,491 (4,387)
Taxation (261) (242)
Net cash inflow/(outflow) from
operating activities 21,230 (4,629)
Financing activities
Interest paid on borrowings (630) (627)
Equity dividend paid (3,612) (3,639)
Buyback of ordinary shares (3,411) (1,055)
Net cash outflow from financing
activities (7,653) (5,321)
Increase/(decrease) in cash
and cash equivalents 13,577 (9,950)
Cash and cash equivalents at
the start of the period 31,974 40,656
Effect of currency gains 1,801 1,268
Cash and cash equivalents at
the end of the period* 47,352 31,974
*Cash and cash equivalents
represents cash at bank
Statement of Changes in Equity (audited)
For the year ended 31 August 2016
Share Capital Warrant
Share premium redemption reserve Capital Revenue
capital account reserve exercised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 31 August
2015 7,874 32,940 37 1,319 204,321 10,684 257,175
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Total comprehensive
income:
Return for
the year - - - - 71,696 2,966 74,662
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Transactions
with owners
recognised
directly
in equity:
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Buyback
of ordinary
shares (21) - 21 - (3,406) - (3,406)
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Dividend
paid in
the year - - - - - (3,612) (3,612)
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Transfer
of warrant
reserve
to share
premium* - 1,319 - (1,319) - - -
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Balance
at 31 August
2016 7,853 34,259 58 - 272,611 10,038 324,819
---------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
*As approved by the Board on 15 December 2015
See Note 12 See Note 6
Statement of Changes in Equity (audited)
For the year ended 31 August 2015
Share Capital Warrant
Share premium redemption reserve Capital Revenue
capital account reserve exercised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 31 August
2014 7,911 32,940 - 1,319 232,257 9,394 283,821
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Total comprehensive
income:
Return for
the year - - - - (26,876) 4,929 (21,947)
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Transactions
with owners
recognised
directly
in equity:
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Buyback
of ordinary
shares (37) - 37 - (1,060) - (1,060)
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Dividend
paid in
the year - - - - - (3,639) (3,639)
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Balance
at 31 August
2015 7,874 32,940 37 1,319 204,321 10,684 257,175
--------------------- ---------- --------- ------------ ----------- ---------- ---------- ----------
Share premium account
The share premium represents the difference between the nominal value of new ordinary shares issued and the consideration the Company receives for these shares. This account is non-distributable.
Capital redemption reserve
The capital redemption reserve represents the nominal value of ordinary shares bought back for
cancellation. This reserve is non-distributable.
Warrant reserve exercised
The warrant reserve represents proceeds from the issue of warrants. As all warrants have been exercised, the Board approved the transfer of the warrant reserve to the share premium account on 15 December 2015. This reserve is non-distributable.
Capital reserve
Gains and losses on the realisation of investments, realised exchange differences of a capital nature and returns of capital are accounted for in this reserve. Increases and decreases in the valuation of investments held at the year end and unrealised exchange differences of a capital nature are also accounted for in this reserve. The articles of the Company stipulate that this reserve is non-distributable. However, subject to a change to the Company's articles approved by shareholders, this reserve could be made distributable should the need arise.
Revenue reserve
Any surplus/deficit arising from the net revenue return for the year is taken to/from this reserve. This
reserve is distributable to shareholders by way of dividend.
Accounting Policies
Basis of accounting
(a) The Scottish Oriental Smaller Companies Trust plc is a public company limited by shares, incorporated and domiciled in Scotland, and carries on business as an investment trust. Details of the Company's registered office can be found in the Annual Report.
These accounts have been prepared in accordance with applicable accounting standards and under the historical cost convention (modified to include the revaluation of fixed asset investments which are recorded at fair value), the Companies Act 2006, UK Generally Accepted Accounting Practice ("UK GAAP"), including FRS 102, and the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued in November 2014 (the " new SORP") which superseded the SORP issued in January 2009.
The Company has adopted FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' for its financial year ending 31 August 2016. Following the
adoption of FRS 102 and the new SORP, there have been no changes to the Company's
accounting policies and no restatement of the Company's Income Statement, Statement of
Financial Position (previously called the Balance Sheet), Cash Flow Statement, or Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders Funds) at the transition date of 1 September 2014.
In order to better reflect the activities of the Company and in accordance with guidance issued by the AIC, supplementary information which analyses the Profit and Loss Account between items of revenue and capital nature has been presented in the Income Statement.
The accounts have also been prepared on the assumption that approval as an investment trust will continue to be granted.
The functional and reporting currency of the Company is pounds sterling as most investors in the Company are based in the United Kingdom.
Income
(b) Dividends on securities are brought into account on the date on which the security is quoted "ex dividend" on the stock exchange in the country in which the security is listed. Foreign dividends include any withholding taxes payable to the tax authorities. Where a scrip dividend is taken in lieu of cash dividends, the net amount of the cash dividend declared is credited to the revenue account. Any excess in the value of shares received over the amount of cash dividend foregone is recognised as capital. Interest on securities is accounted for on a time apportioned basis so as to reflect the effective yield on the investment.
(c) Overseas income is recorded at rates of exchange ruling at the date of receipt.
(d) Bank interest receivable is dealt with on an accruals basis and taken to revenue.
Expenses
(e) Expenses and interest payable are dealt with on an accruals basis and are charged through the revenue column of the Income Statement.
(f) The investment management fee has been charged in full to the revenue column of the Income Statement. The performance fee is chargeable in full to the capital column of the Income Statement.
Financial Instruments
(g) The Company has elected to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
(h) Financial assets and liabilities are recognised in the Company's Statement of Financial Position when it becomes party to the contractual provisions of the instrument.
(i) Listed investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at cost. Subsequent to initial recognition, investments are valued at fair value which for listed investments is deemed to be bid price or last traded price. Gains and losses arising from changes in fair value are included as a capital item in the Income Statement and are ultimately recognised in the Capital Reserve. Gains and losses arising on realisation of investments are shown in the Capital Reserve.
(j) Equities include ordinary shares and warrants.
(k) Cash and cash equivalents include cash at hand, deposits held on call with banks and other short term highly liquid investments with maturities of three months or less.
(l) Debtors and creditors do not carry any interest, are short term in nature, and are stated as nominal value less any allowance for irrecoverable amounts as appropriate. This is deemed to be the recoverable amount for debtors and the settlement amount for creditors.
(m) Long-term borrowings are initially measured at proceeds less transaction costs and subsequently measured at amortised cost using the effective interest method. Finance costs of such borrowings are charged to revenue in the period in which they are incurred. Interest costs incurred on long-term borrowings are charged to revenue on a time apportioned basis over the life of the liability. Breakage costs on long-term borrowings are charged to capital.
Foreign currency
(n) Exchange rate differences on capital items are included in the Capital Reserve, and on income items in the Revenue Reserve.
(o) All assets and liabilities denominated in foreign currencies have been translated at year end exchange rates.
Dividends
(p) Interim dividends are recognised in the period in which they are paid and final dividends are recognised in the period in which they are approved by the Company's shareholders.
Taxation
(q) Current tax payable is based on taxable profit for the year. In accordance with the SORP, any tax relief on expenses is allocated between capital and revenue on the marginal basis using the Company's effective rate of corporation tax for the year.
Deferred taxation is provided using the liability method on all timing differences, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax asset can be offset.
Owing to the Company's status as an investment trust, and the intention to continue to meet the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation of investments.
Significant judgements and estimates
(r) The preparation of the Company's financial statements requires the directors to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements and disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods. There have been no significant judgements, estimates or assumptions for the current or preceding financial year.
NOTES ON THE ACCOUNTS (audited):
(1) Income
Income from investments relates to dividends. Other income relates to bank deposit interest.
(2) Investment Management Fee
2016 2015
GBP'000 GBP'000
Investment management fee 2,110 2,136
Performance fee - 107
--------- ---------
2,210 2,243
--------- ---------
Management
First State Investment Management (UK) Limited has been Investment Manager since 20 March 1995. In order to comply with the Alternative Investment Fund Managers Directive, with effect from 2 July 2014 the Company terminated its investment management agreement with First State Investment Management (UK) Limited and appointed First State Investments (UK) Limited as its Alternative Investment Fund Manager. First State Investments (UK) Limited delegated portfolio management services to First State Investment Management (UK) Limited.
The terms of the Agreement provide for payment of a base fee of 0.75 per cent per annum of the Company's net assets payable quarterly in arrears. In addition an annual performance fee may be payable to the Investment Manager. The total fee payable to the Investment Manager is capped at 1.5 per cent per annum of the Company's net assets.
The performance fee is based on the Company's share price total return ("SPTR"), taking the change in share price and dividend together, over a three year period. If the Company's SPTR exceeds the SPTR of the Company's benchmark index (the MSCI AC Asia ex Japan Index) over the three year period plus ten percentage points, a performance fee is payable to the Investment Manager. The objective of the performance fee is to give the Investment Manager ten per cent of the additional value generated for shareholders by such outperformance. No performance fee (2015: GBP107,000) is due to be paid for the twelve months ending 31 August 2016.
The Investment Manager's appointment is subject to termination on one year's notice. The
Company is entitled to terminate the Investment Manager's appointment on less than the specified notice period subject to compensation being paid to the Investment Manager for the period of notice not given. The compensation in the case of the Investment Manager's termination is based on 0.75% of the value of the Company's net assets up to the date of termination on a pro rata basis. In addition a termination performance fee amount may be due to the Investment Manager based on the Company's three year performance up to the date of termination and paid on a pro rata basis.
The Agreement sets out matters over which the Investment Manager has authority and the limits above which board approval is required. In addition the Board has a formal schedule of matters specifically reserved to it for decision. This includes determination and monitoring of the Company's investment objectives and policy and its future strategic direction, gearing policy, matters relating to the buy-back and issuance of the Company's shares, appointment and removal of third party service providers, review of key investment and financial data and the Company's corporate governance and risk control arrangements.
(3) Other Administrative Expenses
2016 2015
GBP'000 GBP'000
Auditors' remuneration
for:
* audit services 22 18
* non-audit services in respect of taxation compliance 6 6
Directors' fees 88 84
Company secretarial fees 109 108
Bank, custodial and other expenses 506 563
--------- ---------
731 779
--------- ---------
Company Secretary
PATAC Limited provides company secretarial, accounting and administrative services. The fee for the year ended 31 August 2016, which is payable quarterly in advance and linked to the movement in the Retail Price Index annually, was GBP109,000 (2015: GBP108,000). The appointment is terminable on three months' notice.
(4) Finance Costs of Borrowing
2016 2015
GBP'000 GBP'000
Costs in relation to bank borrowing 629 630
--------- ---------
(5) Taxation
(a) Analysis of charge in the 2016 2015
year GBP'000 GBP'000
Current tax: overseas tax 304 242
-------- --------
(b) Factors affecting the tax charge for the year
The tax assessed for the period is different from that calculated when corporation tax is applied to the total return. The differences are explained below:
2016 2015
GBP'000 GBP'000
Return for the year before taxation 74,966 (21,705)
========= ==========
Total return for the period before
taxation multiplied by the standard
rate of corporation tax of 20.00%
(2015: 20.58%) 14,993 (4,467)
Effect of:
Capital returns not subject to
corporation tax (14,339) 5,509
Non-taxable income (1,331) (1,775)
Overseas tax 304 242
Unutilised management expenses 677 733
Total tax charge for the year 304 242
========= ==========
Under changes enacted in the Finance Act 2009,
dividends and other distributions received
from foreign companies from 1 July 2009 are
largely exempt from corporation tax.
(c) Provision for deferred tax
The Company has a deferred tax asset of GBP4,748,000 (2015: GBP4,606,000) at 31 August 2016 in respect of unrelieved tax losses carried forward. This asset has not been recognised in the accounts as it is unlikely under current legislation that it will be capable of being offset against future taxable profits.
(6) Dividends
2016 2015
GBP'000 GBP'000
Dividends paid in the period:
Dividend of 11.50p per share
(2015 - 11.50p)
paid 22 January 2016 3,612 3,639
======== ========
We note below the proposed dividend in respect of the financial year, which is the basis upon which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The proposed dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these accounts.
2016 2015
GBP'000 GBP'000
Income available for distribution 2,966 4,929
Proposed dividend for the year
ended 31 August 2016 - 11.50p
(2015 - 11.50p) payable 20 January
2017 (3,567) (3,612)
-------- --------
Amount transferred (from retained
income)/to revenue reserve (601) 1,307
======== ========
(7) Return per Ordinary Share
2016 2015
Revenue Capital Total Revenue Capital Total
p p p p p p
Net return per ordinary
share 9.50 229.72 239.22 15.58 (84.95) (69.37)
2016 2015
Revenue return GBP2,966,000 GBP4,929,000
Capital return GBP71,696,000 (GBP26,876,000)
Weighted average ordinary
shares
in issue 31,210,771 31,638,801
There are no dilutive or potentially dilutive shares
in issue.
(8) Equity Investments GBP'000
Cost at 31 August 2015 215,744
Unrealised appreciation 27,426
---------
Valuation at 31 August 2015 243,170
Purchases at cost * 79,057
Sales - proceeds * (94,385)
Sales - realised gains on sales 14,322
Unrealised appreciation on investments in the
year 55,573
---------
Valuation at 31 August 2016 297,737
Cost at 31 August 2016 214,738
---------
Closing unrealised appreciation 82,999
=========
Gains on Investments
Realised gains on sales 14,322
Unrealised gains on the fair value of investments
during the year 55,573
69,895
All investments are listed on recognised stock
exchanges.
* These figures include the following costs:
Transaction Costs
During the year the Company incurred transaction
costs of GBP208,000 (2015: GBP137,000) on the
purchase of investments and GBP354,000 (2015:
GBP150,000) on the sale of investments.
2016 2015
(9) Debtors GBP'000 GBP'000
Sales awaiting settlement 6,109 2,538
Accrued income 999 731
Sundry debtors 350 -
Overseas tax recoverable - 43
7,458 3,312
======== ========
2016 2015
(10) Creditors (amounts falling due GBP'000 GBP'000
within one year)
Purchases awaiting settlement 6,957 504
Management fee payable 609 483
Interest due on loan 27 29
Other creditors 135 153
Performance fee - 107
Stamp duty payable on share buybacks - 5
7,728 1,281
======== ========
2016 2015
(11) Creditors (amounts falling due GBP'000 GBP'000
after one year)
GBP20,000,000 fixed rate loan 3.135%
14/08/19 20,000 20,000
======== ========
The main covenants relating to the loan are that total net assets shall not fall below GBP80 million and the ratio of total borrowings to adjusted total net asset value shall not exceed 30% at any time. There were no breaches of loan covenants during the year.
(12) Share Capital
The allotted and fully paid capital is GBP7,853,416 (2015: GBP7,873,666) represented by 31,413,663 ordinary shares of 25p each (2015: 31,494,663). During the year the Company bought back 474,500 (2015: 148,987) ordinary shares at a cost of GBP3,406,000 (2015: GBP1,060,000), of which 81,000 ordinary shares were cancelled. The Company held 393,500 ordinary shares in Treasury at the year end (2015: nil), being 1.3% of share capital, with a nominal value of GBP98,375 (2015: GBPnil). Since the year end the Company has bought back a further 10,000 ordinary shares to be held in Treasury at a cost of GBP95,000.
The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This will include:
- the level of equity shares in issue; and
- the extent to which revenue in excess of that which is required to be distributed should be retained.
The capital of the Company is the ordinary share capital, the other reserves and the fixed rate loan as described in Note 11. It is managed in accordance with its investment policy in pursuit of its investment objective, which are detailed on pages 17 and 18 of the Annual Report.
(13) Net Asset Value per Ordinary Share
Net assets per share are based on total net assets of GBP324,819,000 (2015: GBP257,175,000) divided by 31,020,163 (2015: 31,494,663) ordinary shares of 25p each in issue (excludes shares held in Treasury).
(14) Cash Flow Statement
Reconciliation of total return on
ordinary activities before finance
costs and tax to net cash outflow
before dividends, interest, purchases
and sales 2016 2015
GBP'000 GBP'000
Net return on activities before
finance costs and taxation 75,595 (21,075)
Net (gains)/losses on investments (69,895) 28,037
Currency gains (1,801) (1,268)
Dividend Income (6,657) (8,623)
Interest Income (83) (93)
Decrease in creditors - (802)
Increase in Debtors (350) -
Net cash outflow from operations before
dividends, interest, purchases and
sales (3,191) (3,824)
(15) Risk Management, Financial Assets and Liabilities
The Company invests mainly in smaller Asian quoted companies. Other financial instruments comprise cash balances, short-term debtors, creditors and a fixed rate loan. The Investment Manager follows the investment process outlined on page 17 of the Annual Report and in addition the Board conducts quarterly reviews with the Investment Managers. The Investment Manager's Risk and Compliance department monitors the Company's investment and borrowing powers to ensure that risks are controlled and minimised. Additionally, its Compliance and Risk Committee reviews risk management processes monthly.
The main risks that the Company faces from its financial instruments are market risk (comprising interest rate, currency and other price risks) and credit risk. As the Company's assets are mainly in readily realisable securities, other than in exceptional circumstances there is no significant liquidity risk. The Board, in conjunction with the Investment Manager, regularly reviews and agrees policies for managing each of these risks. The Investment Manager's policies for managing these risks are detailed below.
Market Risk
The fair value of, or future cash flows from, a financial instrument held by the Company will fluctuate because of changes in market prices.
Interest Rate Risk
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.
During the year the Company held a GBP20 million five year fixed rate loan with National Australia Bank. The Company is also exposed to interest rate risk on interest receivable from bank deposits and interest payable on bank overdraft positions.
The interest rate risk profile of the Company's financial liabilities at 31 August are show below.
Interest Rate Risk Profile
2016 2015 GBP'000 GBP'000
Fixed rate bank loan - Sterling denominated 20,000 20,000
Interest Rate Sensitivity
Considering effects on cash balances and fixed rate borrowings, an increase of 50 basis points in interest rates would have increased net assets and total return for the period by GBP137,000 (2015: GBP60,000). A decrease of 50 basis points would have had an equal but opposite effect. The calculations are based on the cash balances at the balance sheet date and are not representative of the year as a whole.
Foreign Currency Risk
The majority of the Company's assets, liabilities and income are denominated in currencies other than sterling (the currency which the Company reports its results) as at 31 August 2016. The Balance Sheet therefore can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis but the Company reserves the right to undertake foreign exchange hedging of its portfolio. The revenue account is subject to currency fluctuation arising on dividends paid in foreign currencies. The Company does not hedge this currency risk.
Foreign Currency Risk Exposure by Currency of Denomination
31 August 2016 31 August 2015
Total Total
Overseas Net monetary currency Overseas Net monetary currency
investments assets exposure investments assets exposure
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Indian rupee 76,178 203 76,381 59,322 2,165 61,487
Hong Kong
dollar 66,187 - 66,187 60,222 101 60,323
Taiwanese
dollar 42,853 784 43,637 31,637 393 32,030
Singapore
dollar 40,618 202 40,820 41,769 1,017 42,786
US dollar - 19,303 19,303 - 18,601 18,601
Thai Baht 15,608 24 15,632 10,676 63 10,739
Indonesian
rupiah 15,271 (819) 14,452 8,531 - 8,531
Korean won 11,930 - 11,930 12,629 - 12,629
Philippine
peso 10,265 - 10,265 3,300 (20) 3,280
Sri Lankan
rupee 9,678 (101) 9,577 9,745 - 9,745
Malaysian
ringgit 8,025 - 8,025 5,339 - 5,339
Vietnamese
dong 1,124 - 1,124 - - -
Total foreign
currency 297,737 19,596 317,333 243,170 22,320 265,490
Sterling - 7,486 7,486 - (8,315) (8,315)
------------- -------------- ---------- ------------- -------------- ----------
Total currency 297,737 27,082 324,819 243,170 14,005 257,175
------------- -------------- ---------- ------------- -------------- ----------
Currency Risk Sensitivity
At 31 August 2016, 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 2015.
2016 2015
GBP000 GBP000
Indian rupee 3,819 3,074
Hong Kong dollar 3,309 3,016
Taiwanese dollar 2,182 1,602
Singapore dollar 2,041 2,139
US dollar 965 930
Thai baht 782 537
Indonesian rupiah 723 427
Korean won 597 631
Philippine peso 513 164
Sri Lankan rupee 479 487
Malaysian ringgit 401 267
Vietnamese dong 56 -
Total 15,867 13,274
-------- --------
Other Price Risk
Changes in market prices, other than those arising from interest rate or currency risk, will affect the value of quoted investments. It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The Investment Manager monitors market prices throughout the year and reports to the Board on a regular basis.
Other Price Risk Sensitivity
If market values at the Balance Sheet date had been 10% higher or lower with all other variables remaining constant, the return attributable to ordinary shareholders for the year ending 31 August 2016 would have increased/(decreased) by GBP29,773,700 (2015 increased/(decreased) by GBP24,317,000) and equity reserves would have increased/(decreased) by the same amount.
Liquidity Risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Company's assets are investments in quoted securities that are readily realisable. The Company has the power to take out borrowings, which give it access to additional funding when required. The Company's current borrowing facility is detailed in note 11 above.
The contractual maturities of financial liabilities at the year end, based on the earliest date on which payment can be required, are as follows:
2016 2015
3 months 3 to 12 More 3 months 3 to 12 More
or less months than or less months than
GBP000 GBP000 12 months GBP000 GBP000 12 months
GBP000 GBP000
Bank loan 184 470 21,225 186 472 21,852
Amount due
to brokers 6,957 - - 504 - -
Other creditors
and accruals 744 - - 641 - -
Performance
fee accrued - - - 107 - -
7,885 470 21,225 1,438 472 21,852
---------- --------- ----------- ---------- --------- -----------
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 a loss to the Company.
Investment transactions are carried out with a large number of approved brokers, whose creditstanding is reviewed periodically 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.
Cash exposures are carefully managed to ensure that money is placed on deposit with reputable counterparties meeting a minimum credit rating.
None of the Company's financial assets are past due or impaired.
In summary, compared to the amounts in the Balance Sheet, the maximum exposure to credit
risk at 31 August 2016 was as follows:
2016 2015
Balance Maximum Balance Maximum
sheet exposure sheet exposure
Current assets GBP'000 GBP'000 GBP'000 GBP'000
Receivables 7,458 7,458 3,312 3,312
Cash at bank 47,352 47,352 31,974 31,974
-------- ---------- -------- ----------
54,810 54,810 35,286 35,286
======== ========== ======== ==========
Financial Instruments Measured at Fair Value
Level Level Level Total
1 2 3
As at 31 August GBP'000 GBP'000 GBP'000 GBP'000
2016
Listed equities 297,737 - - 297,737
Total financial
instruments 297,737 - - 297,737
======== ======== ======== ========
Level Level Level Total
1 2 3
As at 31 August GBP'000 GBP'000 GBP'000 GBP'000
2015
Listed equities 243,170 - - 243,170
Total financial
instruments 243,170 - - 243,170
======== ======== ======== ========
The tables above provide an analysis of financial assets and financial liabilities based on the fair value hierarchy described below. Short term balances are excluded from the tables as their carrying value at the reporting date approximates to their fair value.
Fair Value Hierarchy
The fair value hierarchy used to analyse the fair values of financial assets and liabilities is described below. The Company has early adopted 'Amendments to FRS102: Fair Value Hierarchy Disclosures', issued by the Financial Reporting Council in March 2016, for the purpose of this hierarchy disclosure.
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:
Level 1 - investments with quoted prices in an active market;
Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly being derived from market prices; and
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.
16. Related Party Transactions
The Directors' fees for the year are detailed in the Directors' Remuneration Report in the Annual Report. An amount of GBP15,000 was outstanding to the Directors at the year end (2015: GBP15,000). No Director has a contract of service with the Company. During the year no Director was interested in any matter requiring disclosure under section 412 of the Companies Act 2006.
17. Alternative Investment Fund Managers Directive
Under the Alternative Investment Fund Managers Directive the Company is required to publish maximum exposure levels for leverage on a 'Gross' and 'Commitment' basis. The process for calculating exposure under each method is largely the same, except that, where certain conditions are met, the Commitment method allows instruments to be netted off to reflect 'netting' or 'hedging' arrangements and the Company's leverage exposure would then be reduced. The AIFM set maximum leverage levels of 3.0 and 1.7 times the Company's net asset value under the 'Gross' and 'Commitment' methods respectively. At the Company's year end the levels were 0.97 and 1.06 times the Company's net asset value.
The Alternative Investment Fund Managers Directive requires the Alternative Investment Fund Manager ("AIFM") to make available certain remuneration disclosures to investors. This information is available from the AIFM on request.
The financial information contained within this announcement does not constitute statutory accounts as defined in sections 434 and 435 of the Companies Act 2006. The results for the years ended 31 August 2016 and 2015 are an abridged version of the statutory accounts for those years. The Auditor has reported on the 2016 and 2015 accounts, their reports for both years were unqualified and did not contain a statement under sections 495 to 498 of the Companies Act 2006. Statutory accounts for 2015 have been filed with the Registrar of Companies and those for 2016 will be delivered in due course.
The 2016 Annual Report will be posted to shareholders in October 2016 and copies will be available from the Company's website www.scottishoriental.com and the Company's registered office at 10 St Colme Street, Edinburgh, EH3 6AA.
Enquiries: Steven Davidson, Company Secretary
Telephone 0131 538 6603
14 October 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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