1. Report for the year ended 31 March 2017
Shires Income PLC
Report for the year ended 31 March 2017
June 2017
Ed Beal, Senior Investment Manager Aberdeen Asset Management

2. Shires Income PLC Objective
The Company aims to provide shareholders with a high level of income, together with growth of both income and capital from a portfolio substantially invested in UK equities
Benchmark
The Trust’s benchmark index is the FTSE All-Share Index Total Return
Investment Policy
The Company invests principally in ordinary shares of UK quoted companies, and in convertible and preference shares with above average yields. The Manager selects stocks via a bottom-up investment process based on a disciplined evaluation of companies through direct visits by the Manager.
Gearing is used with the intention of enhancing long-term returns

3. Performance Performance (total return) (%) 1 year ended 31 Mar 17
3 years ended
5 years ended
Net asset value
+24.5
+27.0
+82.8
Share price (based on mid-market)
+27.5
+13.0
+63.9
FTSE All-Share Index
+22.0
+24.9
+58.7
Discrete performance (%)
Year ending:
31/3/17
31/3/16
31/3/15
31/3/14
31/3/13
Net asset value
27.5
(15.4)
4.9
14.0
27.2
Share price
24.4
(7.0)
9.7
11.5
29.1
Benchmark
22.0
(3.9)
6.6
8.8
16.8
All figures are for total return and assume re-investment of net dividends excluding transaction costs
Past performance is not a guide to future results
Source: Shires Income PLC Annual Report to 31 Mar 17/Aberdeen Asset Management

4. Highlights 31 Mar 17 31 Mar 16 % change
Equity shareholders’ funds (£’000)
81,477
68,802
+18.4
Net asset value per shareA
271.61p
229.36p
Share price (mid-market)
243.25p
202.00p
+20.4
Discount NAV
(10.4%)
(11.9%)
Dividend per shareB
12.75p
12.25p
+4.1
A Value of total assets less liabilities.
B The figures for dividend per share reflect the years in which they were earned
Past performance is not a guide to future results
Source: Shires Income PLC Annual Report to 31 Mar 17

5. Distribution of assets and liabilities​
Valuation at ​
31 Mar​ 16
Movement during the period ​​​
31 Mar​ 17​
Purchas es
Sales
Other
Gains/
(losses)
£’000 %
Listed investments
Ordinary shares
60,717
88.2
9,092
(8,343) -
10,652
72,118
88.5
Convertibles
1,330
1.9
(826)
(18) 89
575
0.7
Preference shares
23,102
33.6
(83)
2,114
25,133
30.9
​Total investments
85,149
123.7
(9,169)
(101)
12,855
97,826
120.1
Current assets
2,877
4.2
2,881
3.5
Current liabilities
(9,224)
(13.4)
(19,230)
(23.6)
Non-current liabilities
(10,000)
(14.5)
Net assets
68,802
100.0
81,477
Net asset value per Ordinary share
229.4p
271.6p
Source: Shires Income PLC Annual Report to 31 Mar 17

6. Sector breakdown
Source: Shires Income PLC Annual Report to 31 Mar 17

7. Equity investment portfolio – twenty largest investments
As at 31 Mar 17
​Company
Valuation 2016 £’000
Total portfolio %
Aberdeen Smaller Companies Income Trust
6,522
6.7
British American Tobacco
3,562
3.6
Royal Dutch Shell ‘B’
3,364
3.4
Unilever
3,171
3.2
GlaxoSmithKline
2,921
3.0
HSBC Holdings
2,881
AstraZeneca
2,874
2.9
Chesnara
2,772
2.8
Prudential
2,504
2.6
Vodafone
2,232
2.3
Ten largest investments
32,803
33.5
BHP Billiton
2,147
2.2 BP
1,995
2.0
Schroders
1,994
Close Brothers
1,984
Standard Chartered
1,954
Inmarsat
1,944
Compass
1,885
1.9
Provident Financial
1,828
BBA Aviation
1,632
1.7
Sage Group
1,601
1.6
Top twenty equity investments
51,767
52.8
Source: Shires Income PLC Annual Report to 31 Mar 17

8. Summary and Outlook Brexit has led to significant uncertainty
The UK general election has exacerbated this
As has a lack of clarity over President Trump’s economic policy
And various European elections
Equity markets have been remarkably resilient
UK economy has, so far, performed relatively well
Sterling weakness has benefitted corporate profitability, but that won’t last forever
Market dividend growth likely to slow
High quality companies attracting premium valuations
From an income perspective
Sterling weakness is helpful
Underlying earnings growth is positive, the risk of dividend reductions amongst the biggest UK payers has receded
Shires yield remains attractive, in both absolute and relative terms
We are o/w o/s exposure Cf the 70% generated by the UK market
High Q co’s with an element of defensiveness have led to post Brexit o/p
Difficult to comment on valuations as we haven’t yet seen enough of the impact to be able to make meaningful adjustments to earnings expectations.

9. Institutional investors:
Contact details
Should you require further information please do not hesitate to contact us:
Private investors:
Institutional investors:
Colin Edge: +(0)

10. Disclaimer Important information
Risk factors you should consider prior to investing:
• The value of investments and the income from them can fall and investors may get back less than the amount invested.
• Past performance is not a guide to future results.
• Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
• The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company's assets will result in a magnified movement in the NAV.
• The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company's shares.
• The Company may charge expenses to capital which may erode the capital value of the investment.
• There is no guarantee that the market price of the Company's shares will fully reflect their underlying Net Asset Value.
• As with all stock exchange investments the value of the Company's shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
• Certain trusts may seek to invest in higher yielding securities such as bonds, which are subject to credit risk, market price risk and interest rate risk. Unlike income from a single bond, the level of income from an investment trust is not fixed and may fluctuate.
• With funds investing in bonds there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall, and vice versa. In addition to the interest rate risk, bond investments are also exposed to credit risk reflecting the ability of the borrower (i.e. bond issuer) to meet its obligations (i.e. pay the interest on a bond and return the capital on the redemption date). The risk of this happening is usually higher with bonds classified as ‘sub-investment grade’. These may produce a higher level of income but at a higher risk than investments in ‘investment grade’ bonds. In turn, this may have an adverse impact on funds that invest in such bonds.
• Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and
certain investors may be subject to further tax on dividends.
Other important information:
Issued by Aberdeen Asset Managers Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Registered Office: 10 Queen’s Terrace, Aberdeen AB10 1YG. Registered in Scotland No An investment trust should be considered only as part of a balanced portfolio. Under no circumstances should this information be considered as an offer or solicitation to deal in investments.
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