Schroder Oriental Income Fund Limited
Half YearReportandAccountsforthesixmonthsended28February2015
Investment Objective, Directors and Advisers
Investment objective
TheCompany’sinvestmentobjectiveistoprovideatotalreturnforinvestorsprimarilythroughinvestmentsin
equitiesandequity-relatedinvestmentsofcompanieswhicharebasedin,orwhichderiveasignificantproportionof
theirrevenuesfrom,theAsiaPacificregionandwhichofferattractiveyields.
Directors
RobertSinclair(Chairman)
FergusDunlop
PeterRigg
ChristopherSherwell
AlternativeInvestmentFundManagers(AIFM)Directive
Certainpre-sale,regularandperiodicdisclosuresrequiredbytheAIFMDirectivemaybefoundeitherinthisReport
oronthewebatwww.schroders.co.uk/its.
Non-MainstreamPooledInvestments(NMPI)status
TheCompanycurrentlyconductsitsaffairssothatitssharescanberecommendedbyIndependentFinancial
AdviserstoordinaryretailinvestorsinaccordancewiththeFCA’srulesinrelationtonon-mainstreaminvestment
productsandintendstocontinuetodosofortheforeseeablefuture.TheCompany’ssharesareexcludedfromthe
FCA’srestrictionswhichapplytonon-mainstreaminvestmentproductsbecausethereturnstoinvestorsare
predominantlybasedonexposuretolistedequitiesandequity-basedinstruments.
Advisers
Alternative Investment Fund Manager (“Manager”)
SchroderUnitTrustsLimited
31GreshamStreet
LondonEC2V7QA
UnitedKingdom
Lending Bank
ScotiabankEuropePLC
201Bishopsgate
LondonEC2M3NS
UnitedKingdom
Investment Manager, Company Secretary and
Administrator
SchroderInvestmentManagementLimited
31GreshamStreet
LondonEC2V7QA
UnitedKingdom
Telephone:02076586501
Recognised Auditor
Ernst&YoungLLP
RoyalChambers
StJulian’sAvenue
StPeterPort
GuernseyGY14AF
Registered Office
ArnoldHouse
StJulian’sAvenue
StPeterPort
GuernseyGY13NF
Designated Manager
HSBCSecuritiesServices(Guernsey)Limited
ArnoldHouse
StJulian’sAvenue
StPeterPort
Guernsey GY13NF
Safekeeping and Cashflow Monitoring Agent and
Custodian
HSBCBankplc
8CanadaSquare
LondonE145HQ
UnitedKingdom
SchroderOrientalIncomeFundLimited
Corporate Broker
NumisSecuritiesLimited
TheLondonStockExchangeBuilding
10PaternosterSquare
LondonEC4M7LT
UnitedKingdom
Registrar
ComputershareInvestorServices(Guernsey)Limited
3rdFloor
NatwestHouse
LeTruchot
StPeterPort
GuernseyGY11WD
Contents
Financial Highlights and Ten Largest Investments
2
Interim Management Report
3
Statement of Comprehensive Income
9
Statement of Changes in Equity
10
Balance Sheet
11
Cash Flow Statement
12
Notes to the Accounts
13
Company Summary
15
Schroder Oriental Income Fund Limited
1
Financial Highlights
For the six months ended
28 February 2015
Total returns (including dividends reinvested)1
Net asset value (“NAV”) per share total return (based on ex-income NAV per share)2
7.3%
Share price total return
6.7%
Shareholders’ funds (£’000)
2
31 August 2014
% Change
447,217
428,456
+4.4
NAV per share 200.62p
193.44p
+3.7
Share price
203.75p
195.50p
+4.2
Share price premium to NAV per share excluding undistributed
current year revenue
1
28 February 2015
2.4%
3.0%
Source: Morningstar.
The cum-income NAV per share total return for the period was 6.2%.
Ten Largest Investments
As at 28 February 2015
Market value of holding
£’000
Percentage of
total equity
shareholders’ funds
Fortune Real Estate Investment Trust
Owner operator of shopping malls in Hong Kong
27,631
6.2
Taiwan Semiconductor
Taiwanese manufacturer of semiconductor products
20,637
4.6
HSBC
Multinational bank
15,380
3.4
National Australia Bank
Australian bank
13,245
3.0
China Petroleum & Chemical
Petroleum and petrochemical manufacturer
12,896
2.9
BOC Hong Kong
Financial services provider in Hong Kong
11,626
2.6
Hopewell
Property and toll roads operator in Hong Kong and China
11,600
2.6
Sydney Airport
Airport services provider
11,131
2.5
Venture
Singapore contract manufacturing services provider
10,817
2.4
PCCW
Hong Kong telecommunications provider
10,562
2.3
145,525
32.5
Company and activity
TOTAL
At 31 August 2014, the ten largest investments represented 34.3% of total equity shareholders’ funds.
2
Schroder Oriental Income Fund Limited
Interim Management Report – Chairman’s Statement
Performance
The Company’s net asset value produced a total return of 7.3% and the share price
produced a total return of 6.7%. This compares to a total return of 2.9% for the MSCI
AC Pacific ex Japan (sterling adjusted) Index over the period.
Further details of investment performance, as well as portfolio activity, policy and
outlook, may be found in the Manager’s Review.
Dividends
The Company paid a first interim dividend for the year ending 31 August 2015 of 1.50
pence per share (2014: 1.50 pence per share) on 30 January 2015. The Directors
have since declared the payment of a second interim dividend for the current financial
year of 1.50 pence per share (2014: 1.50 pence per share), which will be paid on
30 April 2015 to shareholders on the register at the close of business on 17 April
2015.
Share capital
The Company’s shares mostly traded above net asset value during the period under
review as demand remained strong. The average premium to net asset value
(excluding current year revenue) during the period was 1.2%. Since the period end,
the Company’s shares have traded at a consistent premium to net asset value.
Your Board has continued to implement its active policy on discount management
and premium control during the period. A total of 1,425,000 Ordinary shares were
reissued from Treasury at a small premium to net asset value during the six months to
28 February 2015, to provide liquidity to the market. A further 800,000 Ordinary
shares have been issued from Treasury since the period end. Following these issues,
there was a total of 223,716,574 Ordinary shares in issue and 13,225,000 shares held
in Treasury.
Gearing
The Company has in place a multi-currency revolving credit facility of £50 million.
During the period under review, the average gearing represented 6.0% of net assets.
The level of gearing continues to be monitored closely by the Board and managed as
necessary.
Impact of the Foreign Account Tax Compliance Act
(“FATCA”)
The United States has enacted provisions under FATCA which introduce reporting
requirements to the United States Internal Revenue Service (the “IRS”) for foreign
financial institutions in respect of their investors who are resident in, or citizens of, the
United States (“US Persons”). Under the Agreement between the Government of the
United States of America and the Government of the States of Guernsey to Improve
International Tax Compliance and to Implement FATCA, the Company has reporting
obligations in respect of certain US Persons.
While the Company has very few investors that are reportable under FATCA, it has
registered with the IRS and obtained a Global Intermediary Identification Number
pursuant to the legislation. The Board is currently reviewing its full monitoring and
reporting obligations with its advisers and I will provide further updates in my year-end
Statement.
Outlook
The 10-year anniversary of the Company’s launch is in two months’ time, and –
having launched in 2005 at £1.00 per share – there is a satisfying symmetry in the net
asset value per share at the end of February 2015 being almost exactly £2.00.
Schroder Oriental Income Fund Limited
3
Interim Management Report – Chairman’s Statement
Together with the dividend having been increased in each year, it is a reassuring
affirmation of the logic behind the Company’s launch. It also raises the question of
whether the next decade can be as good. The Manager’s Review discusses some of
the short-term challenges to the region, but your Board remains optimistic that Asian
income can play an important role in most investors’ long-term portfolios.
The region continues to punch above its weight in terms of the number and variety of
income producing shares, with over a third of all shares globally with a yield of 4% or
more being listed in the Pacific ex Japan markets*. Perhaps even more intriguingly for
the future, there are also a number of markets where the cult of the dividend has still
to take a firmer hold.
Robert Sinclair
Chairman
29 April 2015
*Source: MSCI.
4
Schroder Oriental Income Fund Limited
Interim Management Report – Manager’s Review
The Company’s net asset value per share recorded a total return of 7.3% over the six
months to end February 2015. Two interim dividends totalling 3.0 pence per share
have been declared for the period.
Performance of the MSCI AC Pacific ex Japan Index
(sterling adjusted) from 31 August 2014 to
28 February 2015
While the regional markets yielded a modest positive return in sterling terms over the first
half of the fiscal year, in a number of key markets this was flattered by the weakness of
sterling particularly vis a vis currencies which have broadly matched the dollar’s strength
such as those of Hong Kong, China, Taiwan, Thailand and The Philippines. Notable
exceptions to this have been Australia, New Zealand and Malaysia where currencies
depreciated versus sterling.
Rebased to 100
105
100
95
90
85
80
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
MSCI AC Pacific ex Japan Net USD
Jan-15
Feb-15
MSCI AC Pacific ex Japan Net GBP
Source: Thomson Financial Datastream as at 28 February 2015
Regional returns were comparable with those elsewhere. Global markets were
subdued given evidence of slowing economic activity in the United States, continued
volatility in key commodity markets, and doubts over the resolve of the European
Central Bank to commit to a quantitative easing programme. Asia has lacked
catalysts given the subdued external environment. Growth has generally been sub
trend and, in some markets, decelerating. However, while some regional monetary
authorities (including China, India and Australia) have cut policy rates there has been
no urgency to resort to more comprehensive stimulatory measures.
MSCI AC Pacific ex Japan total returns by country
31 August 2014 to 28 February 2015
The Philippines
13.8
6.0
Hong Kong
7.8
0.4
Taiwan
6.4
4.1
Indonesia
5.8
Thailand
8.8
5.2
-0.9
New Zealand
4.8
AC Pacific ex Japan
7.8
2.9
3.2
Singapore
0.4
Australia
1.7
-3.0
Korea
Malaysia
18.0
11.0
China
7.9
-6.4
-5.8
-7.4
-1.5
Returns in GBP
Returns in Local
Source: Schroders, Factset
The Philippines, China and Hong Kong were the notable performers over the period.
The Philippines is a major beneficiary of lower oil prices, growth momentum has
Schroder Oriental Income Fund Limited
5
Interim Management Report – Manager’s Review
remained impressive and overseas remittances have remained resilient. China has
been buoyed by looser monetary policy (including rate cuts and reductions in the
Required Reserve Ratio of the banks), and a shift in domestic savings towards the
equity market. This increasingly influenced the Hong Kong market where mainland
Chinese related stocks led the rally. Financial scandal and lower oil prices hit Malaysia,
particularly the currency, while Korea fretted over a challenging export environment,
not helped by concern over increased competition from Japan. In Australia, good
returns in local currency terms were more than cancelled out by the weakness in the
Australian dollar given the deterioration in the terms of trade and looser monetary
policy.
Positioning and performance
The Company’s performance was ahead of the reference index during the period,
primarily due to strong stock selection, but with a modest positive impact from
country weightings. The main contributors in terms of stock selection were Hong
Kong, Taiwan and Australia, with lesser contributions from Thailand and Singapore. In
terms of allocation, key contributors to relative performance were the nil weight in
Malaysia, the underweighting in Korea and the overweighting in Hong Kong. The
principal headwinds for the Company were stock selection in China, and also the
underweight stance in that market.
The main country exposures remained Australia, Hong Kong, Singapore and Taiwan.
Within these markets, we reduced Singapore and, to a lesser extent, Australia while
adding to Hong Kong. We initiated a first holding in India, but otherwise exposure
elsewhere was little changed. In sector terms, there were additions to consumer
discretionary, banks and materials, funded by a reduction in industrials.
Portfolio weight by sector Portfolio weight by country
at 28 February 2015
at 28 February 2015
Net assets (%)
Net assets (%)
Real Estate
20.2
Hong Kong
32.3 Industrials
14.1 Australia
24.0 Information Technology
13.6 Taiwan
12.5 Banks
12.7 Singapore
10.2 Materials
11.9 Thailand
7.7 Telecommunications
10.1 China 6.0 Consumer Discretionary
9.5 Korea
5.4 Other Financials
5.6 New Zealand
2.2 Energy
5.2 United Kingdom
2.1 Utilities
1.7 Indonesia
1.5 Consumer Staples
1.5 India
1.3 Gearing (6.1) Philippines
0.9 Total
100.0
Gearing Total
(6.1) 100.0
Investment outlook
The first quarter has been marked by yet more loosening of monetary policies world
wide with over 20 central banks cutting policy rates in response to disinflationary forces
which remain very much to the fore. Oil and industrial commodity prices remain soggy,
as do soft commodity prices which play a more than proportionate role in emerging
markets, both as exporters and given the larger share of budget they comprise for lower
income consumers. 6
Schroder Oriental Income Fund Limited
Interim Management Report – Manager’s Review
However, with sovereign bond yields now below core inflation in the G7 group of
developed economies, and an estimated 30% of the euro area bond market now on
negative yields, the extraordinary efforts of central banks are continuing to distort
financial markets. The ECB decision to embark on quantitative easing is the obvious
proximate cause, but aided and abetted by the other leading economies of the UK and
Japan. Furthermore, with US growth coming in below expectations and a strengthening
dollar effectively tightening policy, the Federal Reserve has sought flexibility in the timing
of when active rate rises follow on from last year’s ending of the asset purchase
program.
Equity investors have drawn some comfort from the loose monetary environment, but
this has been tempered by fears that, despite the best efforts of policymakers, the
global economy remains in the grip of secular stagnation and deflationary conditions.
We would not be as pessimistic, and hold to our view that we will see a period of
steady low inflationary expansion. Fears of stagnation arise from mistaking lags for
longer-term factors. In particular, the recovery of bank lending in a number of markets,
especially in Europe, was bound to take time given the level of damage to both
confidence and balance sheets wrought by the global financial crisis. Similarly the
adverse effects of lower commodity prices have been quicker to hit resource
dependent economies (particularly emerging markets where structural weaknesses
were already apparent) than for the benefit to come through for energy/commodity
consuming companies and consumers.
For the patient, we believe this is a fairly benign environment for Asian markets,
meriting a balanced approach for income oriented portfolios between good quality but
modestly cyclical companies in sectors such as consumer discretionary, industrials
and IT on the one hand, and more defensive yield in areas such as REITs and
telecoms. Weakening European currencies and a newly competitive Japan will
present challenges for the region’s exporters, so selectivity remains key.
Given the size of its economy, events in China may continue to dominate the
headlines in the region. While growth would appear to be slowing markedly, domestic
Chinese equity markets have continued to surge since the Company’s year end amid
loosening monetary policies and a speculative flurry of margin finance and a surge in
equity trading account openings. Driven more by speculation than fundamentals, this
is beginning to impact the Hong Kong market via the Shanghai/HK Connect with
investors concentrating on arbitrage opportunities between A and H shares (the latter
usually at discounts) irrespective of the quality or valuations of underlying investments.
It is impossible to say when this phase will pass, but in the meantime we continue to
stick to our fundamentally based discipline and find few domestic Chinese companies
meriting inclusion in a quality income portfolio such as that of the Company.
More broadly, the region continues to offer a range of companies with attractive
income characteristics across sectors and markets. Earnings growth may be modest,
but balance sheets are healthy, cash flow generation good and cover satisfactory
across the companies in the portfolio. We continue to be modestly geared, funding
out of the Australian dollar where the balance of risk would still appear to be on the
downside.
For Schroder Investment Management Limited
29 April 2015
Schroder Oriental Income Fund Limited
7
Interim Management Report
Principal risks and uncertainties
The principal risks and uncertainties with the Company’s business fall into the
following categories: financial risk; strategic risk; and accounting, legal and regulatory
risk. A detailed explanation of the risks and uncertainties in each of these categories
can be found on page 15 of the Company’s published Annual Report and Accounts
for the year ended 31 August 2014. These risks and uncertainties have not materially
changed during the six months ended 28 February 2015.
Going concern
The Directors believe, having considered the Company’s investment objective, risk
management policies, capital management policies and procedures, expenditure
projections and the fact that the Company’s investments comprise readily realisable
securities which can be sold to meet funding requirements if necessary, that the
Company has adequate resources, an appropriate financial structure and suitable
management arrangements in place to continue in operational existence for the
foreseeable future. For these reasons, they consider that there is reasonable evidence
to continue to adopt the going concern basis in preparing the accounts.
Related party transactions
During the first six months of the current financial year, no transactions with related
parties have taken place which have materially affected the financial position or the
performance of the Company.
Directors’ responsibility statement
The Directors confirm that, to the best of their knowledge, this condensed set of
financial statements has been prepared in accordance with The Companies
(Guernsey) Law 2008 and with International Financial Reporting Standards (“IFRS”)
and the Interim Management Report as set out above includes a fair review of the
information required by 4.2.7R and 4.2.8R of the Financial Conduct Authority’s
Disclosure and Transparency Rules.
8
Schroder Oriental Income Fund Limited
Statement of Comprehensive Income
(Unaudited) for the six months
ended 28 February 2015
(Unaudited) for the six months
ended 28 February 2014
(Audited) for the year
ended 31 August 2014
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains/(losses) on investments held at fair
value through profit or loss
–
16,994
16,994
–
(18,311)
(18,311)
–
28,387
28,387
Net foreign currency gains
–
4,025
4,025
–
1,194
1,194
–
210
210
8,480
–
8,480
8,050
–
8,050
21,074
878
21,952
Income from investments
Other income
Gross return/(loss)
Management fee
Performance fee
Other administrative expenses
Profit/(loss) before finance costs and
taxation
Finance costs
Profit/(loss) before taxation
Taxation (note 5)
Net profit/(loss) and total
comprehensive income
Earnings/(loss) per share (note 6)
7
–
7
11
–
11
24
–
24
8,487
21,019
29,506
8,061
(17,117)
(9,056)
21,098
29,475
50,573
(487)
(1,135)
(1,622)
(423)
(987)
(1,410)
(887)
(2,070)
(2,957)
–
–
–
–
–
–
–
(1,786)
(1,786)
(317)
(3)
(320)
(294)
(2)
(296)
(566)
(3)
(569)
7,683
19,881
27,564
7,344
(18,106)
(10,762)
19,645
25,616
45,261
(185)
(431)
(616)
(106)
(246)
(352)
(272)
(629)
(901)
7,498
19,450
26,948
7,238
(18,352)
(11,114)
19,373
24,987
44,360
(446)
(125)
(571)
(580)
–
(580)
(1,571)
–
(1,571)
7,052
19,325
26,377
6,658
(18,352)
(11,694)
17,802
24,987
42,789
3.17p
8.68p
11.85p
3.04p
(8.39)p
(5.35)p
8.12p
11.40p
19.52p
The “Total” column of this statement represents the Company’s Statement of Comprehensive Income, prepared in
accordance with IFRS. The “Revenue” and “Capital” columns represent supplementary information prepared under
guidance issued by The Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or
discontinued in the period.
Schroder Oriental Income Fund Limited
9
Statement of Changes in Equity
for the six months ended 28 February 2015 (unaudited)
At 31 August 2014
Share
capital
£’000
Treasury
share
reserve
£’000
Capital
redemption
reserve
£’000
Special
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
148,880
(29,447)
39
150,374
138,851
19,759
428,456
Reissue of shares from Treasury
–
2,746
–
–
–
–
2,746
Net profit
–
–
–
–
19,325
7,052
26,377
Dividends paid in the period
At 28 February 2015
–
–
–
–
–
(10,362)
(10,362)
148,880
(26,701)
39
150,374
158,176
16,449
447,217
for the six months ended 28 February 2014 (unaudited)
At 31 August 2013
Reissue of shares from Treasury
Share
capital
£’000
Treasury
share
reserve
£’000
Capital
redemption
reserve
£’000
Special
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
148,880
(35,624)
39
150,374
113,864
18,393
395,926
–
1,319
–
–
–
–
1,319
Net (loss)/profit
–
–
–
–
(18,352)
6,658
(11,694)
Dividends paid in the period
–
–
–
–
–
(9,843)
(9,843)
148,880
(34,305)
39
150,374
95,512
15,208
375,708
At 28 February 2014
for the year ended 31 August 2014 (audited)
At 31 August 2013
Share
capital
£’000
Treasury
share
reserve
£’000
Capital
redemption
reserve
£’000
Special
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
148,880
(35,624)
39
150,374
113,864
18,393
395,926
Reissue of shares from Treasury
–
6,177
–
–
–
–
6,177
Net profit
–
–
–
–
24,987
17,802
42,789
Dividends paid in the year
–
–
–
–
–
(16,436)
(16,436)
148,880
(29,447)
39
150,374
138,851
19,759
428,456
At 31 August 2014
Registered in Guernsey
Company registration number: 43298
10
Schroder Oriental Income Fund Limited
Balance Sheet
(Unaudited)
At 28 February
2015
£’000
(Unaudited)
At 28 February
2014
£’000
(Audited)
At 31 August
2014
£’000
474,273
389,464
451,605
Non current assets
Investments at fair value through profit or loss
Current assets
Receivables
1,456
1,168
2,490
Cash and cash equivalents
5,879
13,948
20,575
7,335
15,116
23,065
481,608
404,580
474,670
(33,277)
(28,013)
(42,633)
Total assets
Current liabilities
Bank loans
Payables
(1,114)
(859)
(3,581)
(34,391)
(28,872)
(46,214)
447,217
375,708
428,456
Share capital (note 7)
148,880
148,880
148,880
Treasury share reserve
(26,701)
(34,305)
(29,447)
39
39
39
Special reserve
150,374
150,374
150,374
Capital reserves
158,176
95,512
138,851
Revenue reserve
16,449
15,208
19,759
447,217
375,708
428,456
Net assets
Equity attributable to equity holders
Capital redemption reserve
Total equity shareholders’ funds
Net asset value per share (note 8)
200.62p
171.64p
193.44p
Schroder Oriental Income Fund Limited
11
Cash Flow Statement
(Unaudited)
For the six
months ended
28 February
2015
£’000
(Unaudited)
For the six
months ended
28 February
2014
£’000
(Audited)
For the year
ended
31 August
2014
£’000
26,948
(11,114)
44,360
616
352
901
(3,903)
(1,435)
(109)
Operating activities
Profit/(loss) before taxation
Add back interest
Less exchange gains on foreign currency bank loan
(16,994)
18,311
(28,387)
Net purchases of investments at fair value through profit or loss
(5,652)
(2,076)
(17,564)
Decrease/(increase) in receivables
1,139
387
(854)
(Decrease)/increase in payables
Add back (gains)/losses on investments at fair value through profit or loss
(2,543)
(2,420)
207
Overseas taxation suffered
(573)
(464)
(1,491)
Net cash (outflow)/inflow from operating activities before interest
(962)
1,541
(2,937)
Interest paid
(665)
(373)
(827)
(1,627)
1,168
(3,764)
Net bank loans (repaid)/drawn down
(5,453)
3,136
16,430
Reissue of shares from Treasury
2,746
1,319
6,177
Dividends paid
(10,362)
(9,843)
(16,436)
Net cash (outflow)/inflow from financing activities
(13,069)
(5,388)
6,171
(Decrease)/increase in cash and cash equivalents
(14,696)
(4,220)
2,407
Cash and cash equivalents at the start of the period
20,575
18,168
18,168
5,879
13,948
20,575
Net cash (outflow)/inflow from operating activities
Financing activities
Cash and cash equivalents at the end of the period
12
Schroder Oriental Income Fund Limited
Notes to the Accounts
1. Principal activity
The Company carries on business as a Guernsey closed-ended investment company.
2. Financial statements
The financial information for the six months ended 28 February 2015 and 28 February 2014 has not been audited or reviewed by the
Company’s Auditor. These financial statements do not include all of the information required to be included in annual financial statements
and should be read in conjunction with the financial statements of the Company for the year ended 31 August 2014.
3. Accounting policies
The accounts have been prepared in accordance with International Financial Reporting Standard 34 “Interim Financial Reporting” and
the accounting policies set out in the statutory accounts of the Company for the year ended 31 August 2014. Where presentational
guidance set out in the Statement of Recommended Practice (“the SORP”) for investment companies issued by the Association of
Investment Companies in January 2009 is consistent with the requirements of International Financial Reporting Standards, the accounts
have been prepared on a basis compliant with the recommendations of the SORP.
4. Dividends
Third interim dividend of 3.00p in respect of the year ended 31 August 2013
(Unaudited)
Six months
ended
28 February
2015
£’000
(Unaudited)
Six months
ended
28 February
2014
£’000
(Audited)
Year ended
31 August
2014
£’000
–
6,560
6,560
Fourth interim dividend of 3.15p in respect of the year ended 31 August 2014
7,018
–
–
First interim dividend of 1.50p (2014: 1.50p)
3,344
3,283
3,283
–
–
3,283
Second interim dividend of 1.50p
Third interim dividend of 1.50p
–
–
3,310
10,362
9,843
16,436
A second interim dividend of 1.50p (2014: 1.50p) per share, amounting to £3,353,000 (2014: £3,283,000) has been declared payable in
respect of the year ending 31 August 2015.
5. Taxation
The Company has been granted an exemption from Guernsey taxation, under the Income Tax (Exempt Bodies) Guernsey Ordinance for
which it is charged an annual exemption fee of £1,200 (2014: £600). The tax charge comprises irrecoverable overseas tax deducted
from dividends receivable and capital gains tax.
Schroder Oriental Income Fund Limited
13
Notes to the Accounts
6. Earnings/(loss) per share
(Unaudited)
Six months
ended
28 February
2015
£’000
(Unaudited)
Six months
ended
28 February
2014
£’000
(Audited)
Year ended
31 August
2014
£’000
7,052
6,658
17,802
Net capital profit/(loss)
19,325
(18,352)
24,987
Net total profit/(loss)
26,377
(11,694)
42,789
222,513,535
218,749,309
219,238,697
Net revenue profit
Weighted average number of shares in issue during the period
Revenue earnings per share
3.17p
3.04p
8.12p
Capital earnings/(loss) per share
8.68p
(8.39)p
11.40p
11.85p
(5.35)p
19.52p
Total earnings/(loss) per share
7. Share capital
The Company’s shares in issue comprised the following:
Ordinary shares, excluding shares held in Treasury
Shares held in Treasury
Closing balance
(Unaudited)
28 February
2015
(Unaudited)
28 February
2014
(Audited)
31 August
2014
222,916,574
218,891,574
221,491,574
14,025,000
18,050,000
15,450,000
236,941,574
236,941,574
236,941,574
(Unaudited)
28 February
2015
(Unaudited)
28 February
2014
(Audited)
31 August
2014
8. Net asset value per share
Net assets attributable to shareholders (£’000)
Shares in issue at the period end, excluding shares held in Treasury
Net asset value per share
14
Schroder Oriental Income Fund Limited
447,217
375,708
428,456
222,916,574
218,891,574
221,491,574
200.62p
171.64p
193.44p
Company Summary
The Company
Schroder Oriental Income Fund Limited is an independent Guernsey resident Company, whose shares are listed on the London Stock
Exchange. As at 29 April 2015, the Company had 223,566,574 Ordinary shares in issue and a total of 13,225,000 Ordinary shares held
in Treasury. Accordingly, the total number of voting rights in the Company as at 29 April 2015 is 223,716,574. The Company’s assets
are managed by Schroders, which also administers the Company.
It is not intended for the Company to have a limited life and the Articles of Incorporation do not contain any provisions for review of the
future of the Company at specified intervals.
Website and share price information
The Company has a dedicated website, which may be found at www.schroderorientalincomefund.com. The website has been designed
to be utilised as the Company’s primary method of electronic communication with shareholders. It contains details of the Company’s
share price (subject to a delay of 15 minutes) and copies of Report and Accounts and other documents published by the Company as
well as information on the Directors, Terms of Reference of the Board’s Committees and other governance arrangements. In addition,
the site contains links to announcements made by the Company to the market and Schroders’ website. There is also a section entitled
“How to Invest”.
The Company releases its Net Asset Value per share on both a cum and ex income basis to the market daily.
Share price information may also be found in the Financial Times and on Schroders’ website at www.schroders.co.uk/its.
Registrar services
Communications with shareholders are mailed to the address held on the register. Any notification and enquiries relating to
shareholdings, including a change of address or other amendment should be directed to Computershare Investor Services (Guernsey).
AIFM Directive disclosures
Preferential treatment of investors
The Company’s investors purchase shares on the open market and therefore the Company is not in a position to influence the treatment
of investors. No investor receives preferential treatment.
Liquidity risk management
The Company’s shares are traded on the London Stock Exchange through market intermediaries. There are no special rights to
redemption.
Periodic and regular disclosure under the AIFM Directive
(a) none of the Company’s assets are subject to special arrangements arising from their illiquid nature;
(b) there are no new arrangements for managing the liquidity of the Company including, but not limited to, any material changes to the
liquidity management systems and procedures employed by the Manager in place. Shareholders will be notified immediately where
the issue, cancellation, sale and redemption of shares is suspended, or where other similar special arrangements are activated;
(c) the current risk profile of the Company and the risk management systems employed by the Manager to manage those risks can be
found in the Strategic Report of the Company’s published 2014 Annual Report and Accounts; and
(d) the total amount of leverage employed by the Company may be found in the Strategic Report of the Company’s published 2014
Annual Report and Accounts.
Any changes to the following information will be provided through a regulatory news service without undue delay:
(a) the maximum level of leverage which the Manager may employ on behalf of the Company; and
(b) the right of re-use of collateral or any changes to any guarantee granted under any leveraging arrangement.
AIFM remuneration disclosures
The information required under the AIFM Directive to be made available to investors in the Company on request in respect of
remuneration paid by the AIFM to its staff, and, where relevant, carried interest paid by the Company, can be found on the website
www.schroders.co.uk/its.
Schroder Oriental Income Fund Limited
15
www.schroderorientalincomefund.com
www.schroders.co.uk/its
Dealing Codes
ISIN:
GB00B0CRWN59
SEDOL Code: B0CRWN5
Ticker:
SOI
Global Intermediary Identification Number (GIIN)
1TVP6A.99999.SL.831